PAGE: 1 of 4 / REPLACES POLICY DATED: 4/6/98, 3/1/99, 1/1/01, 7/15/01, 3/1/04, 4/30/05 (GOS.LAB.015), 3/6/06
EFFECTIVE DATE: January 1, 2007 / REFERENCE NUMBER: REGS.LAB.015
SCOPE: All Company-affiliated facilities performing and/or billing anatomical pathology services. Specifically, the following departments:
Business Office Pathology
Laboratory Medical Staff
Administration Revenue Integrity
Registration/ Admitting Health Information Management
Finance Patient Account Services
Medicare Service Centers Reimbursement
PURPOSE: To establish guidelines for billing anatomical pathology services in accordance with Medicare requirements.
POLICY: Billing for the technical component of anatomical pathology services provided to inpatients and outpatients must comply with Medicare requirements.
Due to a special “grandfathering” provision that was included in regulations related to the billing of the technical component of anatomical pathology services, the Procedure section in this policy does not apply to hospitals that have an arrangement with an independent laboratory or pathologist for the provision of these services and such arrangement was in effect prior to July 22, 1999.
Facilities with relevant arrangements prior to July 22, 1999:
If the arrangement specifies that an independent laboratory or pathologist will provide and bill Medicare for the technical component of anatomical pathology services provided to the hospital’s patients, the hospital is allowed to continue this type of arrangement through December 31, 2007. This type of arrangement does not need to be with the same independent laboratory or pathologist in order for this grandfathering provision to be effective. A hospital can change the independent laboratory or pathologist it has an arrangement with and this provision will remain in effect through December 31, 2007.
If the facility has this type of arrangement in place, the hospital will not bill Medicare for the technical component of anatomical pathology services, until the arrangement has been revised or after December31, 2007, whichever is sooner.
The grandfathering provision may be effective for anatomical pathology services provided to a hospital’s inpatients and/or outpatients. This determination will be based on the stipulations of the arrangement which was in effect before July 22, 1999. For example, if the arrangement specified that an independent laboratory or pathologist would provide and bill only for anatomical pathology services provided to the hospital’s outpatients, only those services provided to the hospital’s outpatients would be covered under the grandfathering provision.
Facilities with no relevant arrangement prior to July 22, 1999:
If the hospital did not have an arrangement before July 22, 1999 that designated that an independent laboratory or pathologist was to provide and bill Medicare for the technical component of anatomical pathology services provided to the hospital’s patients, the grandfathering provision is not applicable. For example, if the hospital has an arrangement which designates that an independent laboratory or pathologist will only provide, and not bill, for the technical component of pathology services provided to the hospital’s patients, the grandfathering provision would not apply. The hospital must bill for the technical component of anatomical pathology services provided to its patients on and after January1,2001.
PROCEDURE:
With respect to non-grandfathered facilities (i.e., those without a relevant arrangement prior to
July 22, 1999), the technical component of anatomical pathology services must be billed as follows.
The Company-affiliated facility performing the technical component of anatomical pathology services must bill Medicare directly in the following circumstances:
1. The service is provided to an inpatient or outpatient of the Company-affiliated facility.
2. The service is performed on a specimen referred from a physician not performing the professional component (interpretation).
3. The service is performed on a specimen referred from a pathologist or independent laboratory performing the professional component (interpretation) that has chosen not to “purchase” the service from the Company-affiliated facility.
4. The service is performed on a specimen referred directly from a free-standing Ambulatory Surgery Center.
The Company-affiliated facility performing the technical component of anatomical pathology services must bill the entity referring the specimen in the following circumstances:
1. The service is performed on a specimen of an inpatient or outpatient of another hospital.
2. The service is performed on a specimen referred from a pathologist or independent laboratory performing the professional component (interpretation) that has chosen to “purchase” the service from the Company-affiliated facility.
IMPLEMENTATION AND ANNUAL REVIEW
1. If a Company-affiliated hospitals did not have an arrangement in place with an independent laboratory or pathologist for anatomical pathology services provided to hospital patients prior to July 22, 1999, it must bill the technical component of the pathology service on its UB-92/UB-04 claim form to Medicare.
2. Company-affiliated facilities must establish a process to obtain in a timely fashion, from its independent laboratory or pathologist, the appropriate CPT/HCPCS for the services performed for the Company-affiliated facility’s patients.
a. Work with the Company-affiliated facility’s independent laboratory or pathologist to establish a system for providing the Company-affiliated facility with accurate CPT/HCPCS codes.
b. Update the Company-affiliated facility’s laboratory chargemaster to include the appropriate CPT/HCPCS codes, revenue codes and descriptions for the technical component of anatomical pathology services. These entries must match the Company Standard Laboratory Chargemaster.
c. Develop a process that defines which department will be responsible for entering charges for the technical component of anatomical pathology services.
d. Establish a process to review documentation from the Company-affiliated facility’s independent laboratory or pathologist to verify the accuracy of the CPT/HCPCS codes reported. The Company-affiliated facility will be held responsible should any of the codes reported be determined to be incorrect.
3. Laboratory and business office/service center personnel must educate all staff associates responsible for ordering, charging, or billing laboratory services on the contents of this policy.
4. The Facility Ethics and Compliance Committee must review the requirements and implementation of this policy on an annual basis.
DEFINITIONS:
Technical Component: Specimen handling, accessioning, processing, transcription/reporting, and record keeping of all levels of anatomical pathology services rendered.
Professional Component: The examination, interpretation, and consultative services of all levels of anatomical pathology services as defined by the American Medical Association in conjunction with CPT and adopted by CMS.
REFERENCES:
Federal Register, Vol. 60, pg. 63124, Section 415.130
Medicare Claims Processing Manual (100-04), Chapter 16, Section 80.2.1CMS Program Memorandum AB-00-73, August 11, 2000
CMS Program Memorandum, A-01-42, March 22, 2001
Federal Register (Final Rule for OP PPS), November 2, 1999
42 CFR §410.42(a)
Social Security Act 1842 (42 USC 1395u(n))
42 USC Section 263b, 1999
42 CFR §416.61
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (H.R.1)
CMS Manual System, Pub. 100-20, Transmittal 34, December 24, 2003
CMS Manual System, Pub.100-04, Transmittal 382, November 26, 2004
H.R. 6408: Tax Relief and Health Care Act of 2006, SEC. 104. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES UNDER MEDICARE
1/2007