Primary Care Coding Alert

Question: When we send specimens to the lab, we code the test with modifier -90 and add a small percentage to the charge amount to cover our clinic expenses. One of our family physicians thinks this is illegal and wants to change the way we do business. Is he correct - are we coding incorrectly?

Colorado Subscriber Answer: You and your doctor may both be correct. From a coding standpoint, you are right that modifier -90 (Reference [outside] laboratory) represents a test that an outside laboratory, not an office, performs.

Your physician, however, correctly points out that you may be reporting these services improperly. If the lab submits the same test code that you do, you are double- billing the service.

To avoid duplicate coding, you should have a written pass-through-billing agreement with the laboratory. If both parties agree to the arrangement, you would code for the laboratory's tests using modifier -90. The modifier indicates you are reporting a test that an outside laboratory performed.

Strategy: You should find out what your contract with the lab states. If you're not sure whether your agreement holds muster, check with your Medicare carrier. Because most insurance companies tend to follow Medicare's lead, your local carrier representative can usually inform you of acceptable coding practices.