Pathology/Lab Coding Alert

Question: Medicare requires participating providers to indicate on the claim form in Box 20 if a service was purchased from an outside lab and what the purchase amount is. My question is regarding our charge amount that we report in Box 24-F: Can this fee exceed that which is reported in Box 20, or does it have to equal or be of lesser value? How does this impact billing other payers for the same service since we can't have two separate fee schedules for Medicare and other payers?

Codify Forum

Answer: There is no longer a "purchased diagnostic test" rule, according to CMS. Instead, you need to take into account an "anti-markup rule."

A physician must check box 20 'yes' and enter a dollar amount only if the anti-markup rule applies to a particular claim. When a pathologist purchases the technical component (TC) from a hospital, the pathologist usually meets an exception to the anti-markup rule because he supervises the histology technologists performing the TC. So the pathologist can bill the global charge and doesn't have to declare that the TC was purchased from the hospital.

On the other hand: Other physicians (such as dermatologists) might purchase the TC from hospitals or independent labs, but if they don't supervise the histology technologists or meet other exceptions to the anti-markup rule, they must declare that the TC was purchased and report the amount paid to the supplier in box 20. They would then have to split the professional component and TC into two lines on the claim form. The charge for the TC must be no more than is reported in box 20 as the purchase price. This doesn't violate any pricing rule, because the physician is following federal regulations.