CEO SUMMARY: As of Aug. 1, Aetna will stop paying out-of-network pathologists for the professional component review of certain clinical pathology tests. Until now, the health insurer has paid for the professional component when out-of-network labs billed for clinical lab tests using the modifier 26. In a notice to labs, Aetna said it will pay only for the professional component for 106 AP codes. One pathology consulting firm says this change could cut some pathology groups’ revenue by as much as $300,000 per year.
STARTING Aug. 1, Aetna will end payment for the professional component of clinical laboratory tests for out-of-network labs.
In a notice to clinical laboratories regarding its claims payment policies, the health insurer in Hartford, Conn., said it will allow the modifier 26 only for anatomic pathology procedures, said Alex Mitchell, Quality Programs Coordinator for Vachette Pathology, a revenue cycle management firm for clinical laboratories and anatomic pathology groups. Aetna and other insurers use the modifier 26 to distinguish the professional component of CPT codes involving both the professional and technical component.
“Up to this point, Aetna would pay for the professional component of clinical pathology for out-of-network groups or those groups that had fought to have that language included in their contracts,” Mitchell said in an interview with THE DARK REPORT.
“Now, it appears that Aetna is seeking to close that revenue stream,” he added. “In the letter it sent to labs, Aetna said it needed to make the change to address a systems issue that wasn’t in line with its payment policies.”
Aetna’s letter to labs also mentioned that the insurer had recently audited its claims payment processes and found that it had paid some providers for claims that did not align with its “longstanding policy for modifier 26 when billed with laboratory services.”
New Modifier 26 Policy
Now it is revising its claims-system edits so that on Aug. 1, the policy will be applied consistently. “We only allow modifier 26 for laboratory services (80000 CPT series) billed with one of the following codes.”
As of this date, Aetna did not return THE DARK REPORT’s request for comment.
Vachette Pathology President Michelle Matney explained that, in late June, Vachette and its client labs learned that Aetna was rewriting the payment policy regarding the use of modifier 26. “They’ve outlined the very specific CPT codes that will be recognized and paid, which is obviously a significant shift,” she said.
While the shift is significant, it’s difficult to estimate how much of an effect the change will have on clinical labs. “We have one group that’s going to lose about $1,000 to $2,000 in revenue each month, and that amount will add up over the year,” Matney commented. “On the other end of the spectrum, we have a group that has Aetna as one of its major payers, and they stand to lose almost $300,000 annually from this change.
Aetna Is Big Payer in Texas
“That second group happens to be in Texas where the Texas Society of Pathologistsis very strong,” she added. “And the society in Texas is already working with Aetna to see if they can eliminate some of the loss that their member groups there will feel from this change. That’s significant because Aetna is a big payer in Texas.”
Estimating the effect of the change also is difficult because the policies regarding payment for the professional component for clinical pathology tests vary widely among the nation’s health insurers, Matney explained. “Cigna pays for the professional component for clinical lab tests, for instance, but UnitedHealthcare does not. In fact, Cigna will negotiate a rate for out-of-network labs.”
The change affects all CPT codes from 80000 to 87999 when the 26 modifier is applied, Matney explained. “Aetna will no longer pay for clinical lab tests with a 26 modifier regardless of whether the lab is in network or out of network,” she said. “If a lab has a contract with Aetna that says the insurer will pay for testing using these codes and the 26 modifier, that contract language might not survive this change.
“If that language is in a pathology group’s Aetna contract, the group might have to go back to the bargaining table to try to pick up some of the revenue that would be lost with this change,” she added. “At the same time, the lab’s anatomical codes will be paid because Aetna said very specifically in its letter that claims for the 106 AP codes with a 26 modifier will be recognized.”
This change comes as Anthem also is making changes in the way it pays for clinical and anatomic pathology testing, Mitchell added.
“But unlike the Anthem issue, where the changes to the fee schedule vary by state, Aetna is making an across-the-board change and will no longer pay for these services effective in about four weeks,” he said.
“The exact impact of eliminating payments for these services will vary depending on a group’s overall Aetna volume and whether or not they were already precluded from billing for these services due to contract language,” he added. “But this is just another example of a revenue stream being cut off as pathologists and labs continue to operate under the financial constraints implemented under PAMA.” PAMA is the Protecting Access to Medicare Act of 2014.
Unclosed for Nearly 15 Years
“We should note that Aetna let this loophole remain unclosed for nearly 15 years,” Matney commented. “Essentially, this change is the same one Aetna announced in about 2005 or 2006. I’ve done this work for many years and I remember when Aetna made a similar announcement then.
“At the time, Aetna sent out a letter saying it would not pay for these types of services and it would update their claims processing systems to reflect that change,” she added. “Since then, this policy has not been enforced widely, and it seemed to go away for a while.
“But now the letter from Aetna clearly states that the issue resulted from a claims-processing system error and it is closing that door now by not paying for any of those codes,” said Matney.