Laboratory News and Guidance

Representatives of Physicians Group Management (PGM Billing) recently returned from attending and exhibiting at Lab Institute 2017. This meeting, hosted by G2 Intelligence, brings together professionals from throughout the lab industry for three days of education and networking.

In this ever-changing, ever-evolving healthcare environment, many sessions focused on the top challenges facing laboratories. Here are four of the most significant identified by meeting presenters.

1. Laboratory Compliance

Labs are under increased governmental scrutiny concerning the Stark self-referral prohibition and federal Anti-Kickback Statute laws and regulations governing patient payment responsibilities. It is critical that labs develop a process through which a concerted, documented effort is made to collect patient deductibles and co-pays. An emphasis should also be placed on the training sales staff and education of referring providers on the importance of documentation.

2. Laboratory Audits

Labs are experiencing increasing Medicare and commercial carrier audits. What do you need to do to protect yourself? Ensure your internal documentation and referring documentation adequately meet payer guidelines. Additionally, it is fundamental that you educate referring providers on the importance of documenting medical necessity as well as their obligation to provide copies of medical records to the lab.

3. Laboratory Reimbursement Cuts

The latest update to the Protecting Access to Medicare Act of 2014 (PAMA) brought with it bad news for labs: most high volume codes could see Medicare payment reductions of 10% or more. Even more bad news:Ssince most commercial payers have moved to a base fee schedule that uses Medicare, you can except them to push for lower rates as well. With reimbursement tightening, labs cannot afford to leave any money on the table. An emphasis should be placed on ensuring effective laboratory billing/revenue cycle processes.

4. MolDx for the Georgia region

With Palmetto GBA securing the contract to provide administrative services for the Medicare program in the Georgia region (i.e., Georgia, Alabama, Tennessee) and implementing the MolDX Program, labs in these states will need to secure Z-codes for their particular tests. The Medicare Part B provider transition effective date is Feb. 26, 2018, but Z-code applications can be submitted now.

When laboratory services are billed by providers other than the end-stage renal disease (ESRD) facility and the laboratory service furnished is designated as a service that is included in the ESRD Prospective Payment System (PPS), Medicare will reject or deny the claim.

This is according to recent issue of Medicare Quarterly Provider Compliance Newsletter, a newsletter from CMS developed to help providers to avoid common billing errors and other erroneous activities when dealing with the Medicare Program.

The problem, identified through a recovery audit, is described as follows: The ESRD PPS includes consolidated billing for limited Part B services included in the ESRD facility bundled payment. Certain laboratory services and limited drugs and supplies are subject to the Part B consolidated billing and are no longer separately payable by Medicare when provided for ESRD beneficiaries by providers other than the renal dialysis facility.

Medicare policy requires that all ESRD-related laboratory tests must be billed by the renal dialysis facility whether provided directly or under arrangements with an independent laboratory. When laboratory services are billed by providers other than the ESRD facility and the laboratory service furnished is designated as a service that is included in the ESRD PPS (ESRD-related), Medicare will reject or deny the claim.

In the event that an ESRD-related laboratory service was furnished to an ESRD beneficiary for reasons other than for the treatment of ESRD, the provider may submit a claim for separate payment using modifier -AY.

The recovery auditor determined the claims on the audit indicate that a laboratory service was billed for an ESRD beneficiary who received services from a dialysis center on the same date of service. As a result, the laboratory service(s) should not be separately paid. Medicare recovered the identified overpayments from the providers.

Lab Billing Resources

Medicare encourages ESRD facilities and laboratories to review the following documentation to help ensure proper lab billing for ESRD beneficiaries:

  • Medicare Claims Processing Manual," Chapter 8, Lab Services, Section 60.1, available here.