Pathology/Lab Coding Alert

Watch decision for independent lab billing  The -grandfather- exception that allows independent labs to bill Medicare for the technical component (TC) of hospital-patient pathology services will end on Dec. 31--unless proposed legislation saves the day.

CMS formalized the expected sunset with Change Request 5210, which you can view on the Internet at www.cms.hhs.gov/transmittals/downloads/R1046CP.pdf. Both Senate- and House-generated bills would make the exemption permanent, if passed.

Without the legislation, independent labs that provide TC services to qualifying hospitals would cease to bill Medicare for the TC and begin billing the hospital for the work.

Hospitals qualify for the exception only if they had the billing arrangements with an independent lab as of July 22, 1999, when CMS first proposed eliminating this payment scheme.

Industry leaders fear that the sunset of the grandfather exception would hurt cash-strapped rural hospitals that cannot afford in-house pathology services and therefore rely on independent labs.

The exemption only applies to TC of anatomic pathology and cytopathology services for hospital inpatients and outpatients.