Pathology/Lab Coding Alert

Question: I've heard that an LCD can help us avoid denials on laboratory diagnostic tests. What is the LCD exactly? And how will it help us to avoid denials?


Florida Subscriber

Answer: An LCD is a "local coverage determination," which CMS requires fiscal intermediaries and carriers to issue when they have local guidelines regarding when and how to bill for certain tests and procedures. An LCD is similar to what CMS used to issue, called the "local medical review policy" (LMRP).

In addition to placing limits on the diagnosis codes that justify medical necessity for some tests and procedures, the LCD establishes billing guidelines for certain services and includes limits on frequency and patient eligibility. You should therefore obtain a copy of your local Medicare carrier's LCDs for the procedures you perform most frequently, and familiarize yourself with the limits and guidelines for services your office performs. Without this knowledge, you risk billing for services that are medically unjustified or over the allowable limit according to the LCD - and the HHS Office of the Inspector General can view this as an attempt at billing fraud.

For example: AdminaStar Federal Inc. has an LCD regarding ionized calcium. The determination lists 67 diagnosis codes, such as 252.01 (Primary hyperparathyroidism) or V58.2 (Blood transfusion, without reported diagnosis), that you can use to support medical necessity when you bill 82330 (Calcium; ionized).

To collect reimbursement from AdminaStar, you must report one of these diagnosis codes and have the verifiable documentation to back up your claim. If you bill 82330 with a diagnosis code other than those listed, the insurer will deny your claim. Knowledge of your Medicare carrier's LCD, therefore, is the only way to proactively ensure that you are coding correctly and ethically for reimbursement and that your practice doesn't unknowingly perform noncovered services.

Keep in mind, however, that even if your LCD tells you which diagnosis codes your carrier will reimburse, this doesn't mean you can report these codes without proper documentation. Coding from the record is the only way to stay safe in the event of an audit.

Reader Questions and You Be the Coder were prepared with the assistance of R.M. Stainton Jr., MD, president of Doctors' Anatomic Pathology Services in Jonesboro, Ark.