Pathology/Lab Coding Alert

Question: Our pathologist reviewed a peripheral blood smear as a reflex test from an abnormal CBC, but Medicare denied payment. The pathologist routinely reports 85060 for peripheral smears that are part of a bone marrow case and gets paid. What's the difference?

Arizona Subscriber

Answer: The coverage key isn't the reason for the test (bone marrow case versus hematology abnormality); it's place of service (POS). Medicare will pay for 85060 (Blood smear, peripheral, interpretation by physician with written report) only for hospital inpatients (POS 21).

Your pathologist might be equally likely to get requests to review an abnormal peripheral blood smear as a reflex from a complete blood count (CBC) for a hospital inpatient or outpatient. Although bone marrow cases can be from an outpatient, you're more likely to see them in an inpatient setting, which may be why you haven't had problems billing 85060 to Medicare in these instances. You would bill 85060 in addition to 85097 (Bone marrow, smear interpretation) and 88305 (Level IV -- Surgical pathology, gross and microscopic examination, bone marrow, biopsy) when the pathologist examines all three specimen types for a hospital inpatient.

Other payers may pay: Just because Medicare restricts 85060 to the inpatient setting doesn't mean all payers do. You may be able to report 85060 for inpatients and outpatients to other insurers.

Don't subvert Medicare: Because the pathologist gets a request to review an abnormal peripheral smear, some billers have tried to get around the Medicare restriction by reporting an outpatient peripheral smear with a consultation code such as 80500 (Clinical pathology; limited, without review of patient's history and medical records). That's not a good idea. Using a less specific code to avoid Medicare instruction amounts to "coding for coverage" and could result in fraud charges.