Description
Reference (outside) laboratory.

Guidelines/Instructions
Submit this modifier when laboratory procedures are performed by a person or entity other than the treating or reporting physician.
  • This modifier may only be submitted with clinical laboratory tests
  • Independent clinical laboratories may submit this modifier to indicate that the service was referred to an outside laboratory
In general, payment for clinical laboratory tests subject to schedules is only made to the person or entity that performed or supervised the performance of the tests. An exception to this policy allows payment to be made to one independent or hospital laboratory for tests performed by another lab (the referring lab). However, the Omnibus Budget Reconciliation Act of 1989 (OBRA) has amended this exception by restricting payment to referring laboratories. In accordance with S6111(b) of OBRA of 1989, a referring lab can bill for tests performed by a reference lab only if it meets any one of the following three exceptions:
  • The referring laboratory is located in or is part of a rural hospital
  • The referring lab and the reference lab are subsidiary related. That is:
    • The referring lab is a wholly owned subsidiary of the reference lab
    • The referring lab wholly owns the reference lab
    • Both the referring lab and reference lab are wholly owned subsidiaries of the same entity
  • Not more than 30 percent of the clinical laboratory tests billed annually by the referring lab are performed in another lab, other than a subsidiary related lab

Note: Palmetto GBA will only reimburse services submitted with CPT modifier 90 to independent clinical laboratories. Physicians may not submit claims on behalf of laboratories for tests referred to these laboratories. The laboratories may submit claims to Medicare directly.

References: CMS Pub. 100-04, Chapter 16, Section 40.1 (PDF, 526 KB).

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