Labs Have Questions about Prostate Biopsy Policy

Policies issued by NCCI and Palmetto GBA will reduce some prostate biopsy payments

CEO SUMMARY: How will pathology laboratories respond to the publication of revised policies in how laboratories should file Medicare Part B claims for prostate biopsies? Not only will there be a sharp drop in the reimbursement paid for a 12-core prostate biopsy, but labs may be at increased risk of a RAC audit, along with other potential compliance violations. Experts in pathology coding, billing, and law are advising their client pathologists to review their compliance with the new policies.

THERE IS PLENTY OF CONFUSION surrounding a new Medicare policy that appears to reduce reimbursement for a 12-core prostate biopsy by almost 50%. Along with less reimbursement, experts say that labs should be on the alert for RAC audits and compliance issues associated with this new policy.

The policy change was posted by Palmetto GBA on August 7, 2012, for Medicare Regions J1 and J11. Palmetto is the carrier for those areas. For Part B prostate biopsy claims, the new policy directs providers to follow the guidelines issued by the National Correct Coding Initiative (NCCI) that became effective on January 1, 2012.

As detailed by THE DARK REPORT in our August 27 issue, the new policy restricts claims for prostate biopsies. Palmetto wrote that: “Effective January 1, 2012, Medicare has limited the number of prostate biopsies that may be reported for CPT code 88305 to four (4) services. To report five or more prostate biopsies, providers must use G0416 with 1 unit of service.”

The revenue impact of this policy will be to cap reimbursement for a 12-core prostate biopsy at about 47% of its former level. This will significantly reduce revenue at those pathology labs handling large volumes of prostate biopsies. This will be particularly true for the in-house pathology labs of urology groups.

An equally important issue associated with this new policy is that pathologists are asking how they can comply with the Palmetto directive and the NCCI manual. As of this date, neither Palmetto nor the Centers for Medicare & Medicaid Services (CMS) has issued further guidance to pathologists.

As you will read in this issue of THE DARK REPORT, a compliance officer with a national pathology billing company and an attorney with extensive experience in compliance issues for a number of the nation’s largest laboratories explain that in the absence of such guidance, anatomic pathologists may want to review how they bill for prostate biopsies.

At this moment—and in the absence of further guidance from CMS, Palmetto, and other Medicare carriers—anatomic pathologists submitting claims for prostate biopsies should be aware of two consequences associated with the new policies published in the NCCI manual on January 1, 2012, and the Palmetto directive of August 7, 2012.

First, pathologists may be exposed to a higher risk of a RAC audit. Second, some experts believe that, if policymakers prevail in their assertion that the NCCI policy was in effect as of January 1, labs in the Medicare jurisdictions J1 and J11 may be required to repay the difference for any prostate biopsy claims submitted after that date.

Professional organizations represent- ing laboratories have questioned whether Palmetto and the NCCI followed proper procedures in implementing the changes. There was no prior announcement about the changes and the public was given no opportunity to comment on the changes.

Medicare Regions J1 And J11

Palmetto’s new policy affects anatomic pathologists running tests for prostate specimens in Medicare jurisdictions J1 (California, Hawaii, and Nevada) and in J11 (which includes North Carolina, South Carolina, Virginia, and West Virginia). The net effect of this change in policy is estimated to be a decline in revenue of as much as 50% for a 12-core prostate biopsy.

National pathology labs that serve the urology profession will be particularly hard hit by this new policy change. Among the most prominent in this market space are such laboratory companies as Bostwick Laboratories, Inc., in Glen Allen, Virginia, and Oppenheimer Urologic Reference Laboratory (OURLab) in Nashville, Tennessee.

Deciphering NCCI, Palmetto Polices on Prostate Biopsies

ON JANUARY 1, 2012, the National Correct Coding Initiative (NCCI) manual became effective. Few pathologists noticed that the manual changed how labs should be reimbursed for prostate biopsies.

The wording in the manual regarding prostate biopsies was unclear, according to PSA, LLC, a lab billing company in Florence, South Carolina. PSA, in an announcement to its client labs last month, stated that it believed NCCI was attempting to distinguish between the appropriate use of certain HCPCS codes G0416 through G0419 (called G codes). PSA wrote:

The NCCI manual included ambiguous language which many understood to be another attempt by Medicare to distinguish between the appropriate use of the HCPCS G0416-G0419 codes introduced in 2009 for prostate biopsy specimens collected via the transperineal or ‘saturation’ biopsy technique (PSB) and the use of CPT 88305 for reporting prostate needle biopsies collected via the traditional transrectal ultrasound (TRUS) technique.

However, a policy update published by Palmetto GBA [on August 7] has shed new light on the curious NCCI language, making it clear that it is Medicare’s intent to require the use of these new G-codes for all prostate procedures anytime five or more separate specimens are billed. This new policy effectively caps reimbursement for all prostate biopsy specimens, irrespective of the manner in which they were collected.

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