Health Information Management

Q&A: Has CMS introduced a new modifier for billing separately payable lab tests yet?

APCs Insider, July 11, 2014

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Q: Has CMS released further guidance on billing lab tests under the OPPS for separate payment? Do we continue to split them off onto a 141 bill type? This is causing a lot of process issues for us.
A: CMS released additional instructions regarding the billing of lab tests for separate payment. As of July 1, hospitals should use a bill type 141 for referred specimens only. Hospital providers should report all other lab work on a 13x bill type and append modifier -L1 when requesting separate payment under the Clinical Laboratory Fee Schedule. 
CMS reiterated the circumstances under which requesting separate payment is applicable:
  • A hospital collects the lab specimen(s) and lab work is the only service provided on that date of service
  • The clinical lab tests performed are clinically unrelated to other hospital outpatient services furnished on the same day. CMS defines “unrelated” as meaning the lab test is ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services, for a different diagnosis.
The hospital is still responsible for determining when the lab tests qualify to receive separate payment as noted above. When modifier -L1 is appended, the hospital is attesting that the exceptions above have been met. CMS will be reviewing claims data to evaluate potential inappropriate unbundling of lab services, including changes of scheduling patterns to provide the services on a separate date of service from other hospital services in order to receive separate payment for the lab tests.
Modifier -L1 is being implemented for claims received beginning July 1, but is effective retroactively to January 1, 2014. CMS noted that it views “this new modifier as an immediate solution to hospitals’ concern for CY 2014.” The agency added that it may evaluate better means to bill for laboratory services next year. CMS is updating the Claims Processing Manual to reflect these changes. Molecular pathology codes are not packaged under the OPPS, so the new modifier does not apply to those tests.
Detailed information can be found in Transmittal 2971 and SE1412. CMS provides some examples in SE1412. 
Editor’s note: Denise Williams, RN, CPC-H, vice president of revenue integrity services at Health Revenue Assurance Associates, Inc., in Plantation, Florida, answered this question.

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