Clinical Diagnostic Laboratory Services

Clinical Diagnostic Laboratory Tests Submitted Under Arrangement

  • A laboratory that furnished services to a hospital patient must receive payment from the hospital with which it has the arrangement
  • The laboratory must not submit a request for payment to either Medicare or the beneficiary for its services
  • Laboratories billing in addition to the hospital with which they have an arrangement may be in violation of federal regulations and may be subject to civil monetary penalties

This information applies to every diagnostic clinical laboratory service that is payable under Medicare Part B. Neither the place where the service was performed nor the type of contractor that will process the request for payment has any effect on the applicability of these policies.

Date of Service: General Rule
The date of service of the test must be the date the specimen was collected.

Variation
If a specimen is collected over a period that spans two calendar days, the date of service must be the date the collection ended.

Exceptions
Three exceptions apply to the date of service policy for laboratory tests.

1. Date of service for test performed on stored specimens. If a specimen was stored for 30 calendar days or less from the date it was collected, the date of service of the test must be the date the test was performed only if:

  • The test is ordered by the patient’s physician at least 14 days following the date of the patient’s discharge from the hospital
  • The specimen was collected while the patient was undergoing a hospital surgical procedure
  • It would be medically inappropriate to have collected the sample other than during the hospital
    procedure for which the patient was admitted
  • The results of the test do not guide treatment provided during the hospital stay
  • The test was reasonable and medically necessary for treatment of an illness

If the specimen was stored for more than 30 calendar days before testing, the specimen is considered to have been archived and the date of service of the test must be the date the specimen was obtained from storage.

2. Date of service for Chemotherapy Sensitivity Tests Performed on Live Tissue. In the case of a chemotherapy sensitivity test performed on live tissue, the date of service of the test must be the date the test was performed only if:

  • The decision regarding the specific chemotherapeutic agents to test is made at least 14 days after discharge
  • The specimen was collected while the patient was undergoing a hospital surgical procedure
  • It would be medically inappropriate to have collected the sample other than during the hospital procedure for which the patient was admitted
  • The results of the test do not guide treatment provided during the hospital stay
  • The test was reasonable and medically necessary for treatment of an illness

A "chemotherapy sensitivity test" is defined as a test that requires a fresh tissue sample to test the sensitivity of tumor cells to various chemotherapeutic agents for the purposes of applying the above exception.

3. Date of service for Advanced Diagnostic Laboratory Tests and Molecular Pathology Tests. In the case of a molecular pathology test performed by a laboratory other than a blood bank or center, or a test designated by CMS as an ADLT under paragraph (1) of the definition of advanced diagnostic laboratory test in 42 CFR 414.502, the DOS must be the date the test was performed only if:

  • The test was performed following a hospital outpatient’s discharge from the hospital outpatient department
  • The specimen was collected from a hospital outpatient during an encounter (as both are defined in 42 CFR 410.2)
  • It was medically appropriate to have collected the sample from the hospital outpatient during the hospital outpatient encounter
  • The results of the test do not guide treatment provided during the hospital outpatient encounter
  • The test was reasonable and medically necessary for the treatment of an illness

For the purpose of section 40.8.C, a “blood bank or center” means an entity whose primary function is the performance or responsibility for the performance of, the collection, processing, testing, storage and/or distribution of blood or blood components intended for transfusion and transplantation.

Diagnosis Coding
A valid diagnosis code must be included on all claims for laboratory services submitted by professional suppliers. This includes:

  • Physicians
  • Nonphysician practitioners
  • Independent clinical diagnostic laboratories
  • Occupational and physical therapists
  • Independent diagnostic testing facilities
  • Audiologists
  • Ambulatory surgery centers (ASCs)

Palmetto GBA will accept up to eight diagnosis codes on electronic claims. Only four diagnosis codes may be submitted on paper claims.

  • Submit the diagnosis codes in priority order (primary, secondary, etc.)
  • Any codes in excess of the maximum number must be submitted in Loop 2300 or 2400, NTE, 02 for electronic claims 
  • If paper claims are submitted, this information must be submitted as an attachment to the CMS-1500 claim form
  • A laboratory or other provider must report the diagnosis code(s) furnished by the ordering physician. In the absence of such coding information, the laboratory or other provider may determine the appropriate diagnosis codes based on the ordering physician’s narrative diagnostic statement or seek diagnostic information from the ordering physician/practitioner.

Ordering Practitioner
Ordering practitioners include nonphysician practitioners such as clinical nurse specialists, clinical psychologists, clinical social workers, nurse midwives, nurse practitioners and physician assistants who furnish services that would be physician services if furnished by a physician, and who work within the scope of their authority under state law and within the scope of the Medicare statutory benefit.

Documentation Requirements

  • The ordering physician must maintain documentation of medical necessity in the patient’s medical record
  • The laboratory must maintain the documentation it receives from the ordering physician. The laboratory must ensure the information listed on the claim accurately reflects the documentation it received from the ordering physician.
  • The laboratory may request additional diagnostic and other medical information from the physician to document the service(s) are reasonable and necessary:
    • If the laboratory requests additional documentation, it must request material relevant to the medical necessity of the specific service(s), taking into consideration current rules and regulations on patient confidentiality
  • When reviewing claims for manual prepayment or postpayment review, Palmetto GBA will review additional documentation simultaneously submitted with these claims before denying a service
    • This includes routine or complex reviews
    • Exception: carriers may deny without reviewing attached or simultaneously submitted documentation when 'clear policy' serves as the basis for denial

Clear Policy
The term "clear policy" means a statute, National Coverage Determination (NCD), coverage provision in an interpretive manual or Local Coverage Determination (LCD).

  • These documents specify the circumstances under which a service will always be considered non-covered (or incorrectly coded)
  • LCDs are available on the Palmetto GBA website
  • Twenty-three NCDs for clinical diagnostic laboratory services are available on the CMS website

Clarification of the Use of the Terms "Screening" or "Screen"

  • The use of the terms "screening" or "screen" in a CPT code descriptor do not necessarily describe a test performed in the absence of signs and symptoms of illness, disease or condition
  • Tests that are performed in the absence of signs, symptoms, complaints, personal history or disease or injury are not covered except when there is a statutory provision that explicitly covers a test for screening as described
  • A test is considered diagnostic and not screening when a person is tested to rule out or to confirm a suspected diagnosis in the absence of signs and/or symptoms

Multiple Services
There are two CPT modifiers that identify multiple tests for the same beneficiary on the same day. These modifiers are not interchangeable. Laboratories are responsible for providing documentation of medical necessity upon request.

  • CPT modifier 59 indicates "distinct procedural services
    • This modifier is appropriate to report multiple services by a clinical laboratory for the same beneficiary on the same day
    • These situations usually involve the same procedure code for microbiology, when samples or cultures are taken from different anatomical sites or different wounds
    • Submit these services on the same claim if possible
  • CPT modifier 91 indicates "repeat clinical diagnostic laboratory services"
    • If an ordering physician requests a laboratory test that requires several of the same services (i.e., same procedure code) be performed for the same beneficiary on the same day, the laboratory must submit CPT modifier 91 to indicate that multiple clinical diagnostic tests were done on the same day

Example
CPT Code 82803: Gas, blood, any combination of pH, PCO2, PO2, CO2, HCO3, (including calculated 01 saturation).

  • An arterial blood sample is drawn from a patient at three different intervals on the same day and the blood testing is performed three times that same day
  • The laboratory will report the repeat tests as CPT code 82803 with CPT modifier 91