Pathology/Lab Coding Alert

Labs don't know whether to celebrate or wail over the Medicare reform law. While triumphant over the defeat of the proposed 20 percent lab copayment provision, labs will have to deal with a five-year freeze on updates to the Clinical Laboratory Fee Schedule (CLFS).
 
Although the freeze resulted in cancellation of the scheduled Jan. 1 CLFS update, the congressional decision could have been worse for labs. "My understanding is that originally, they were looking at a freeze for seven years," says Lena Robins of Washington, D.C.'s Foley and Lardner. The freeze means labs will not have had an update since 1997. According to the College of American Pathologists, the freeze will cost labs an estimated $7 billion over the next 10 years.

Law Contains Good Policy News

The law includes a two-year legislative extension to the "grandfather" exception that allows independent laboratories to bill Medicare directly for anatomic pathology technical component (TC) services provided to hospital inpatients and outpatients. The extension applies to the years 2005 and 2006, but only if such billing arrangements were in place as of July 22, 1999. If your lab arrangements qualify, you can continue billing services such as surgical pathology codes 88300-88309 globally or with modifiers -TC (Technical component) and -26 (Professional component) to Medicare.
 
Medicare reform also calls for a competitive-bidding demonstration project for clinical laboratory services. The demonstration involves tests furnished without a "face-to-face" encounter with patients, including colorectal cancer screening, and will operate within CLIA guidelines. The Department of Health and Human Services must provide an initial report on the findings by Dec. 31, 2005.
 
The Medicare reform law treats hospital outreach labs the same as independent labs for purposes of secondary- payer collection rules. Now hospitals labs will have to make only a "good-faith" effort to determine if Medicare is secondary to other payers. "No longer having to comply with previous collection requirements is a release of an administrative burden," Robins says.
 
Labs won other victories in the reform law. Medicare must begin to cover screening tests for cardiovascular disease, such as cholesterol and other lipid or triglyceride tests. Medicare must also cover screening tests applicable to patients with high risks for diabetes.