Pathology/Lab Coding Alert

Pathology/lab instruction to follow.

First it was April 1, then Oct. 1, 2012 -- now you have until April 1, 2013 to change the way you apply place of service (POS) definitions for Medicare reporting.

That's according to CMS transmittal 2563 (dated Oct. 11), which replaces CMS transmittal 2561 (dated Sept. 28), which replaces CMS transmittal 2435 (dated March 29).

Watch for New Lab/Pathology Details

The CMS national rule outlined in transmittal 2435 uses "face to face service" location as the primary factor in choosing your POS code.

Under the rule, "providers performing the PC [professional component] of interpretation of tests must use the POS where the face-to-face service ... was performed, [such as] outpatient facility, ASC [ambulatory surgical center], etc.," says Catherine Brink, BS, CMM, CPC, CMSCS, president of NJ-based Healthcare Resource Management.

But because pathologists rarely perform "face to face" service and often do tissue or cytology exams at a site other than the patient location, the instruction is confusing for pathologists.

The POS rule also lacks clarity for clinical lab test reporting, referring only to "certain services provided by independent labs" as a possible reference to services paid on the clinical lab fee schedule (CLFS).

Clarification pending: According to the MLNarticle (MM7631 Revised) explaining the CMS transmittal, "Clarification on the POS for pathology services and independent laboratories will be provided through another [change request] CR."

"The delay gives us more time to implement the change, and hopefully the upcoming clarification will give us a sharper picture of what we need to do to comply," says Judith Watson, accounts receivable manager with Doctors' Anatomic Pathology Services in Jonesboro, Ark.

Resource: You can access the transmittal and MLN article online at www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2012-Transmittals-Items/R2561CP.html

Learn What's at Stake for Your Lab

Why a national policy for reporting POS? Because the Office of the Inspector General (OIG) has found that physicians and other suppliers often incorrectly report the POS.

Improper POS is potential upcode: If you perform a service at your independent lab for a hospital outpatient, you might currently use POS 81 (Independent laboratory) instead of 22 (Outpatient hospital). That means Medicare would not pay you at the facility (hospital) rate, but would instead pay you at the non-facility rate, which is higher to account for the overhead cost of doing business at your lab.

For example: If you bill 88325 (Consultation, comprehensive, with review of records and specimens, with report on referred material) with POS 81, you can expect $196.74 at the non-facility rate. But if you bill the same code with POS 22, you can expect $124.58 at the facility rate (MPFS national amount, conversion factor 34.0376).

You could lose TC: Some Medicare contractors will pay only the professional component allowance when you bill with POS such as 21 (Inpatient hospital) or 22. That's because CMS says the technical work is included in the OPPS or DRG fee schedule for outpatients and inpatients. Some Medicare Part B contractors apply the TC-bundling to services in ambulatory surgery centers (POS 24) as well.

Watch future issues of Pathology/Lab Coding Alert to see how CMS resolves the POS issue for labs and pathologists in time for the April 1, 2013 implementation date.