WPS Posts POS 81 Usage Reminder

Recent claim data analysis conducted by WPS Medicare identified potential errors in claims billed with place of service (POS) code 81 Independent laboratory. The jurisdiction 5 (Iowa, Kansas, Missouri, and Nebraska) Part B Medicare administrative contractor (MAC) posted, Aug. 31, a reminder on its website about POS 81 usage, stating that it is to be used by independent labs (specialty code 69) only.

“Claims submitted with POS 81 by any other provider specialty will be rejected,” WPS Medicare affirms.

Hospitals acting as independent labs are required to submit the actual POS where the test was performed. Physicians should not submit lab tests they refer to outside labs.

Medicare defines “independent laboratory” as one that is independent both of an attending or consulting physician’s office and of a hospital that meets at least the requirements to qualify as an emergency hospital.

According to the Medicare Claims Processing Manual, chapter 16 – Laboratory Services:

“When a hospital laboratory performs laboratory tests for nonhospital patients, the laboratory is functioning as an independent laboratory, and still bills the fiscal intermediary (FI). Also, when physicians and laboratories perform the same test, whether manually or with automated equipment, the services are deemed similar.”

Remember: Payment to an independent laboratory or a physician or medical group is the lesser of the actual charge, the fee schedule amount or the national limitation amount. Part B deductible and coinsurance do not apply.

The same holds true for laboratory tests payable on the Clinical Diagnostic Laboratory Fee Schedule furnished to an outpatient of the hospital, with one exception: Section 3122 of the Patient Protection and Affordable Care Act re-institutes the reasonable cost provisions for outpatient clinical laboratory tests furnished by hospitals with fewer than 50 beds in qualified rural areas for cost reporting periods beginning on or after July 1 through June 30, 2011.

See Medicare Claims Processing Manual, chapter 16 – Laboratory Services, for further clarification of Medicare policy.


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