CEO SUMMARY: In recent years, many rural hospitals have entered into agreements to expand their laboratory outreach businesses. In an interview, the president of the National Association of Rural Hospitals said rural hospitals often bill for lab outreach services under Medicare’s 70/30 shell rule. This rule, as modified by the Omnibus Budget Reconciliation Act of
Laboratory BillingSkip to articles
The laboratory billing process is the interaction between a clinical lab or pathology group and the insurance company (payer). The entirety of this laboratory billing interaction is known as the billing cycle, which can take anywhere from several days to several months to complete, and require several interactions before a resolution is reached. The entire process is the function of what is commonly known as the laboratory coding/billing/collections department.
Laboratory billing starts with laboratory coding. After a lab service is provided, diagnosis and procedure codes are assigned. These codes assist the insurance company in determining coverage and medical necessity of the services. The codes used for laboratory billing are the International Statistical Classification of Diseases and Related Health Problems, usually called by the short-form name International Classification of Diseases (ICD), and the Current Procedural Terminology (CPT) codes.
The ICD is the international “standard diagnostic tool for epidemiology, health management and clinical purposes.” The current version is ICD-9, with ICD 10 scheduled to become the new standard on Oct. 15, 2015. It is maintained by the World Health Organization, the directing and coordinating authority for health within the United Nations System. The ICD is designed as a health care classification system, providing a system of diagnostic codes for classifying diseases, including nuanced classifications of a wide variety of signs, symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or disease.
The CPT code set is a medical code set maintained by the American Medical Association through the CPT Editorial Panel. The CPT (copyright protected by the AMA) describes medical, surgical, and diagnostic services and is designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes.
Once the procedure and diagnosis codes are determined, the lab bill enters the laboratory collections/revenue cycle management phase. The payer is usually billed electronically by formatting the claim as an ANSI 837 file and using Electronic Data Interchange to submit the claim file to the payer directly or via a clearinghouse. The payer processes the claims usually by medical claims examiners or medical claims adjusters. For higher dollar amount claims, the insurance company has medical directors review the claims and evaluate their validity for payment using rubrics (procedure) for patient eligibility, provider credentials, and medical necessity.
Approved claims are reimbursed for a certain percentage of the billed services. These rates are pre-negotiated between the health care provider and the insurance company. Failed claims are denied or rejected and notice is sent to provider. Most commonly, denied or rejected claims are returned to providers in the form of Explanation of Benefits (EOB) or Electronic Remittance Advice.
Upon receiving the denial message the provider must decipher the message, reconcile it with the original claim, make required corrections and resubmit the claim. This exchange of claims and denials may be repeated multiple times until a claim is paid in full, or the provider relents and accepts an incomplete reimbursement.
THERE IS A NEW SOURCE OF LOST BUSINESS for physicians, clinical laboratories, and others. Patients are losing patience with confusing bills from their providers and opting to find new providers who offer simple, clear, and consistent bills. This turnover in patients was one key finding in a recently-published report.
The report, issued by InstaMed, a national
CEO SUMMARY: Rulings from Judge Amy Berman Jackson of the U.S. District Court in Washington, D.C., are expected soon in the ACLA’s lawsuit against HHS concerning the PAMA final rule that set the course for the new Medicare CLFS rates implemented in January 2018. One lawyer following the lawsuit explains that ACLA has presented strong
LAST WEEK, A FEDERAL JUDGE in South Carolina issued an order imposing civil damages and penalties of more than $114 million on Tonya Mallory, the former CEO of Health Diagnostic Laboratory, in Richmond, Va., and two owners of the lab’s marketing partner, BlueWave Healthcare Consultants Inc. The damages and penalties were imposed on the defendants
CEO SUMMARY: In two separate lawsuits filed in April, UnitedHealthcare (UHC) and Anthem each charged that drug testing companies used pass-through-billing schemes in ways the insurers say are fraudulent. UHC filed its lawsuit on April 18. One day later, on April 19, Blue Cross and Blue Shield of Georgia and other Anthem companies filed suit
CEO SUMMARY: Several developments have moved the case forward since December when the American Clinical Laboratory Association filed suit in federal court against the Department of Health and Human Services. Inrecent weeks, ACLA filed for summary judgment; HHS responded with its own request for summary judgment; and most recently ACLA filed its rebuttal to the
CEO SUMMARY: When the American Clinical Laboratory Association filed its lawsuit Dec. 11 against the Secretary of Health and Human Services, one of its main claims is that HHS collected payment data on the clinical laboratory testing business in a manner that was deeply flawed. HHS then used that flawed data to set payment rates
CEO SUMMARY: Pass-through billing arrangements, particularly those involving clinical laboratory tests, have long been recognized by healthcare attorneys as having great potential to violate certain federal and state laws. Despite this fact, board members of a financially-struggling community hospital went forward with a pass-through billing agreement that news accounts says committed the hospital to pay
CEO SUMMARY: Anthem charged 37-bed Sonoma West Medical Center in Sebastopol, Calif., of engaging in an improper billing scheme to defraud Anthem and its affiliated Blue Cross and Blue Shield plans. In effect, the charge is a notification to SWMC that Anthem intends to sue SWMC and its owner if it does not recover the $13.5 million in a timely
DEEP PRICE CUTS to the Medicare Part B Clinical Laboratory Fee Schedule was the big story of 2017. The big story of 2018 may be the widespread financial disruption to the clinical lab industry as labs see dramatic declines in their revenue from these Medicare fee cuts.
One early opportunity for lab administrators and pathologists to