Pathology/Lab Coding Alert

Question: I bill for a hospital lab and have noticed that I get inconsistent payment from Medicare when the pathologist evaluates a bone marrow aspiration and peripheral blood smear for the same patient on the same day. I believe that whether we-re billing for an inpatient or outpatient affects the denials -- why is that?

Colorado Subscriber

Answer: You are correct that Medicare varies payment for peripheral blood smear interpretation (85060, Blood smear, peripheral, interpretation by physician with written report) based on whether you are billing for a hospital inpatient or outpatient.

Limitation: Medicare only covers 85060 when you-re billing for a hospital inpatient. The fact that you-re billing the code with a bone marrow aspiration is not important -- Medicare won't cover 85060 with bone marrow cases or with other hematology tests (such as 85027, Blood count; complete [CBC], automated [Hgb, Hct, RBC, WBC, and platelet count]) for anyone other than hospital inpatients (that means outpatients, patients in office labs, etc.).

Medicare's logic for not paying 85060 for hospital outpatients or non-patients is that -payment for the underlying clinical laboratory test is made to the hospital, generally through the PPS [prospective payment system] rate.-

In other words, Medicare holds that it has paid for the peripheral blood smear interpretation by paying for the lab test on the clinical lab fee schedule (such as CBC). Billing Medicare, secondary payers or the patient would be double-billing.

Exception: Other payers, such as your local Medicaid and some private insurers, may not have the same coverage rules as Medicare concerning 85060. You should contact your payers to ensure that you-re coding the interpretation, when appropriate.