Pathology/Lab Coding Alert

Question: We are an independent lab that evaluates Pap smears sent to us from physicians- offices. In some cases, our lab claim has been denied as a duplicate because the physician office billed the test using modifier 90, and the payer received the physician bill first. Can the physician offices do this?

New Mexico Subscriber Answer: The physician office should not bill for a service it does not provide. This is a billing standard accepted by Medicare and most private insurers alike. As the lab that performs the Pap test, you should bill and get paid for the service.
 
For instance: If your lab prepares and examines a diagnostic ThinPrep Pap smear, you should report 88175 (Cytopathology, cervical or vaginal [any reporting system], collected in preservative fluid, automated thin- layer preparation; with screening by automated system and manual rescreening or review, under physician supervision). If the physician took the specimen as a screening Pap smear in the absence of signs or symptoms of disease, you would report the service to Medicare using G0145 (Screening cytopathology, cervical or vaginal [any reporting system], collected in preservative fluid, automated thin-layer preparation, with screening by automated system and manual rescreening under physician supervision).
 
Beware: Because the sort of billing you describe does occur, often involving physician markup of laboratory services, several states have passed laws requiring direct billing for laboratory and pathology services.
 
Regarding modifier 90 (Reference [outside] laboratory), Medicare and most payers restrict the appropriate use of this modifier. Independent labs should use the modifier when they send out certain tests to a reference lab. Then they must include the name, address and CLIA number of both the referring and reference laboratories on the Medicare claims. Medicare will pay the claim at the rate used for the reference lab's jurisdiction.
 
Modifier 90 indicates that a party other than the billing party performed a particular procedure. Although that statement is true for the physician office that billed the Pap smear in your example, Medicare says that it will only process claims for referred laboratory services for labs having specialty code 69 -- that is, independent clinical laboratories. CPT does not list 90 as one of the modifiers approved for hospital outpatient use.