Revenue Cycle Insider

Question: We just received a denial for 80307 with place of service (POS) 22. Why did this happen, and what can we do to appeal?

AAPC Forum Participant

Answer: Without knowing more specifics, such as the denial code assigned by the payer or whether you are billing as an independent lab, the hospital lab, or a provider, it is difficult to say why you were denied billing 80307 (Drug test(s), presumptive, any number of drug classes, any number of devices or procedures; by instrument chemistry analyzers… and mass spectrometry either with or without chromatography… includes sample validation when performed, per date of service) using POS 22 (On campus-outpatient hospital).

But there are several scenarios that could explain the denial. Here’s a look at a few possibilities:

1. You are an independent lab or a provider that ordered the test. If you are an independent reference lab or a provider operating outside of a hospital’s jurisdiction and you are billing separately from the hospital, you cannot use POS 22 on your claim, as that is reserved solely for in-house hospital labs.
2. Your lab performed part of the service. If you are a hospital lab that can bill using POS 22, but you only performed part of the service, you will need to append another modifier to explain what part of the service your lab performed, so that the other lab can bill for their part of the service. For example, suppose you are a hospital lab that performed the test, but you then sent the test sample out to an independent lab or provider for analysis and report. In this case, you would bill the test with the POS (in this case, 22) and append modifier TC (Technical component) to the 80307, leaving the other lab to bill 80307-26 (Professional component). This will avoid the payer seeing the claim as a duplicate.
3. The payer denied for prior authorization. In this case, you will need to review the payer’s policy on pre-authorizations for the patient receiving the test before you can appeal.
4. The payer denied for a bundling or frequency issue. In these cases, you may have exceeded payer guidelines for how many times per day the test can be administered to a patient, or whether the test is bundled into other services the patient may have received on the day the test was administered.

Ultimately, you will have to go back to the payer to determine the precise reason for the denial. You may then have to coordinate with the other provider (the hospital, independent lab, or provider) to determine who can submit the claim and, if appropriate, who gets to bill the appropriate part of the service using either the PC or 26 modifier. You can then adjust your claim and appeal.

Bruce Pegg, BA, MA, CPC, CFPC, Managing Editor, AAPC