CMS

2004 Lab Update Eliminated

Under the New Medicare Reform Bill signed into law on December 8, 2003, the 2004 Medicare fee update and the subsequent updates for the next four years have been eliminated.

Clinical Diagnostic Laboratory Services — GY Modifier

Effective January 1, 2004, laboratories should add the GY modifier to the CPT procedure codes for any service where the appropriate diagnosis for that service is on the list of diagnoses that are not covered by Medicare.

Background

In November 2002, Medicare implemented 23 national coverage determinations (NCDs) for clinical diagnostic laboratory services. These NCDs are specific down to the ICD-9-CM code level and included lists of ICD-9-CM codes that are covered and those that are not covered by Medicare. The ICD-9-CM codes that are not covered by Medicare are codes that are excluded from coverage based on technical denials, such as routine screening services, rather than denial due to lack of medical necessity. Laboratories are permitted to bill beneficiaries for services that are not covered by Medicare for reasons other than medical necessity without providing for an Advance Beneficiary Notice (ABN).

Effective January 1, 2004, the clinical diagnostic laboratory service edit module will consider the presence of the GY modifier in selecting the appropriate response for claims for clinical diagnostic laboratory services. Use of the GY modifier will result in a not covered response from the edit module in all cases.

Reference: CMS One-Time Notification (PUB. 100-04)   Change Request 2933, Transmittal 11.

Modifier Billing Reminder

The Medicare Claims System has been modified to allow carriers to read four modifier fields. In the past, whenever more than two modifiers were needed, they had to be placed in Item 19 (or the comments fields for electronic claims) with modifier 99 indicated on the line item following the procedure code. Effective immediately, you can submit up to four modifiers on paper claims or in the specific electronic fields, based on your billing option.

Note: Modifiers 26, TC, SG and QW must be billed in the first modifier field.

Payment Policy Change

Effective with services received on or after April 1, 2004, Medicare will implement a new payment policy for referred lab services by an independent lab "Specialty 69--Independent Laboratory". These changes will result in the following operational differences:

1.  

An independent clinical laboratory may bill only the carrier in which it is enrolled by reason of having a physical presence

2.  

An independent clinical laboratory may not enroll with a carrier as a "reference-use-only" laboratory

3.  

The referring laboratory must identify a referred service as such on the claim and identify the reference laboratory performing such test *, and

4.  

Both the referring laboratory and the reference laboratory must be enrolled in Medicare.

* Identification of referred services is done by use the CPT modifier 90 for each service. Identification of the reference laboratory is done by completing Item 32 of the 1500 claim form, or the equivalent electronic claims fields. See the referenced CMS transmittal for complete information.

Carriers will process all claims submitted by laboratories physically located in their area of jurisdiction, and will cancel all "reference use only" PINs. Medicare will base the payment amount of a referred service on:

1.  

The fee schedule of the jurisdiction in which the test was performed, or

2.  

If such fee schedule does not have a price for the referred service, the carrier must base the payment amount on its own fee schedule amount, or

3.  

If none, on a price it develops.

Purchased Services - Payment Limit for Laboratories

Effective April 1, 2004, CMS has changed the way reimbursement is made to independent laboratories (IL) when billing the technical component of a purchased diagnostic service. When an IL bills for the technical component (TC) of a physician pathology service purchased from a separate physician or supplier, the payment amount for the TC is based on the lower of the billed charge or the Medicare Physician Fee Schedule. The purchase diagnostic test payment provision does not apply, thus, the purchase service information shall not be entered on the claim. All purchased diagnostic services are based on the Medicare Physician Fee Schedule and are subject to the jurisdiction rules for that fee schedule. The IL must perform at least one of the component services. If they purchase both the PC and the TC services, only the physician or supplier that performed those services may bill.

Screening Immunoassay-Based FOBTs

CMS has issued a memo regarding coverage of immunoassay-based fecal occult blood tests for colorectal cancer screening for Medicare beneficiaries aged 50 years and older effective Jan. 1, 2004.

The test should be billed using HCPCS code G0328.

Travel Allowance Update

Effective in 2004, the payment rate on a per mile basis for procedure code P9603 will be $0.835 and on a flat basis for procedure code P9604 will be $8.35. The calculation by number of draws and travel segments will remain the same.

NCD

Laboratory National Coverage Determination - Changes to the Edit Software

Effective January 1, 2004, the following changes will be made to the laboratory edit software:

1.  

The following diagnosis codes are added to the list of ICD-9-CM Codes covered by Medicare for the prothrombin time (PT) and fecal occult blood test (FOBT) NCDs:

  •

863.91, pancreas head with open wound into cavity;

  •

863.92, pancreas body with open wound into cavity;

  •

863.93, pancreas tail with open wound into cavity;

  •

863.94, pancreas multiple and unspecified sites with open wound into cavity;

  •

863.95, appendix with open wound into cavity; and,

  •

863.99, other gastrointestinal sites with open wound into cavity.

2.  

The following diagnosis codes are deleted from the list of ICD-9-CM Codes covered by Medicare for PT and partial thromboplastin time (PTT) NCDs:

  •

V72.81, pre-operative cardiovascular examination (from PTT);

  •

V72.83, other specified pre-operative examination (from PTT); and,

  •

V72.84, pre-operative examination, unspecified (from PT and PTT).

3.  

In Program Memorandum AB-03-104 (CR 2814), CMS announced the addition of diagnosis code 401.1, benign essential hypertension, to the list of covered diagnoses for lipid testing. However, they did not announce the corresponding change to the narrative of the lipid NCD that authorizes this code. By inclusion in this transmittal, CMS is announcing a change to the narrative of the lipid NCD that was included in the July 17, 2003 decision memorandum posted on the CMS website:   http://cms.hhs.gov/mcd/viewdecisionmemo.asp?id=94. The third bullet listed in the lipid NCD indications section is amended to read:

"Any form of atherosclerotic disease, or any disease leading to the formation of atherosclerotic disease."

In Program Memorandum AB-03-104, CMS announced a number of ICD-9-CM codes that were deleted by the update in ICD-9-CM codes that became effective October 1, 2003. CMS provided for a 90-day grace period for the provider and laboratory community to adapt to these changes. Thus, while CMS announced the changes in CR 2814, they did not alter the software to deny claims when these codes were used. However, the grace period expires with the January update of the software and the following ICD-9-CM codes will be denied: 282.4, 331.1, 348.3, 530.2, 600.0, 600.1, 600.2, 600.9, 767.1, 790.2, V04.8, V43.2, V53.9, V54.0 and V65.1.

Reference: CMS One-Time Notification (Pub.100-20)   Change Request 2940, Transmittal 10.

CCI Edits

Quarterly Update

The Correct Coding Initiative (CCI) edits, Version 10.0, effective January 1, 2004, are available via the CMS Data Center. Version 10.0 will include all previous versions and updates from January 1, 1996, to the present and will be organized in two tables: Column 1/ Column 2 Correct Coding Edits and Mutually Exclusive Code (MEC) Edits. The updated edits can be found on the CMS website:   http://www.cms.hhs.gov/physicians/cciedits/default.asp.

Please Note: The heading "Comprehensive/Component Edits" has been changed to the heading "Column 1/ Column 2 Correct Coding Edits". The table containing comprehensive/component edits also includes edits which do not involve a comprehensive/component relationship, but are codes that should simply not be reported together for other reasons, for example "misuse of the code", etc. The headings have been changed to more accurately reflect the overall category of the edits within the tables and to eliminate the confusion as the result of using the term(s) "comprehensive/component". For more detailed information, please refer to Chapter 1 - General Correct Coding Policies - Section A, Pages 1 and 2.of the CCI manual found on the website above.

Reference: One-Time Notification (Pub.100-08):   Change Request 2938, Transmittal 57.

Return to Top