Palmetto’s Prostate Biopsy Policy Removed after Talks with CMS

Action is a welcome development for labs, but uncertainty remains about unpaid claims

THERE IS SOME POSITIVE LAB INDUSTRY NEWS that has not been widely reported yet. It involves a decision to change an unwelcome Medicare policy that limited the number of prostate biopsy specimens per case that would be reimbursed.

After discussions between lab industry groups and the federal Centers for Medicare & Medicaid Services (CMS), Palmetto GBA removed a policy that limited the units of service that a provider could bill for a prostate biopsy.

This policy was instituted in August 2012 by Palmetto, the nation’s largest Medicare contractor, for prostate biopsy claims originating from regions J1 (California, Hawaii, and Nevada) and J11 (North Carolina, South Carolina, Virginia, and West Virginia).

The impact of this policy was to reduce reimbursement for a 12-core prostate biopsy claim by about 50%. Reimbursement for prostate biopsy specimens in these seven states may now rise, a lawyer representing the American Clinical Laboratory Association (ACLA) said.

Discussions about Policy

ACLA officials met with representatives of CMS recently to discuss the policy implemented by Medicare contractor Palmetto GBA last year. This policy reduced the reimbursement it paid for prostate biopsies in regions J1 and J11.

Last August, Palmetto changed its rules on how pathologists bill for regular prostate biopsies and saturation biopsies. The rules appear to have begun with a change in the National Correct Coding Initiative (NCCI) manual, which was effective on January 1, 2012.

Even though Palmetto changed the policy on August 7, 2012, it said the new policy was retroactive to January 1, 2012. The net effect was estimated to be a cut in revenue of as much as 50% for a 12-core urology biopsy.

Clarifying the NCCI Edit

“There was some ambiguity about the NCCI edit,” explained Peter Kazon, a lawyer with Alston + Bird who represents ACLA. “CMS has clarified the edit to ensure that the code for saturation biopsies should be applied only to saturation biopsies and not to regular prostate biopsies. Subsequently, Palmetto removed the policy.”

In January, Palmetto reported on its website that claims “submitted with CPT 88305 for prostate biopsy frequency were denying incorrectly. The claims affected were processed on November 14, 2012, for dates of service on or after January 1, 2012. Mass adjustments will be performed on the claims which denied incorrectly once the system fix is complete. There is no need to submit an appeal for these claims.” The claim adjustments were completed on January 10, Palmetto added. Palmetto offered no other explanation.


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