Nine Lab Groups Say New NCCI Policy Is Inconsistent

Changes issued in December appear to create conflicts with earlier guidance from CMS, the AMA

CEO SUMMARY: By its name alone, the National Correct Coding Initiative (NCCI) Policy Manual implies that it will be accurate and consistent with other coding initiatives. But nine groups representing various clinical laboratories say NCCI guidelines that the federal Centers for Medicare and Medicaid Services issued in December and implemented on Jan. 1 are inconsistent with guidance NCCI issued previously and inconsistent with guidance from the American Medical Association.

“HIGHLY DISRUPTIVE” IS HOW NINE NATIONAL ORGANIZATIONS representing clinical laboratories and pathologists describe the new federal government guidelines for the coding of and payment for some clinical laboratory and pathology tests. This level of disruption is so severe that the lab industry groups have asked federal officials to withdraw the new guidelines.

Late last year, the federal Centers for Medicare and Medicaid Services (CMS) issued guidelines to the Pathology and Laboratory Services section of the National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services. Because the changes also were made in the Policy Manual for Medicaid Services, the revisions affect payment made to labs for both Medicare and Medicaid beneficiaries.

Request for Comment

CMS did not reply to a request for comment from THE DARK REPORT.

The new guidelines seem to have had the effect of making CMS’ so-called correct coding initiative anything but correct, according to W. Stephen Black-Schaffer, MD, a pathologist at Massachusetts General Hospital and the Associate Chief, Education and Training, at MGH. He’s also an Associate Professor of Pathology at the Harvard Medical School.

At issue are changes CMS issued in Dec. 12 and that went into effect on Jan. 1, less than three weeks later.

Letter from Lab Groups

In a letter to CMS Administrator Seema Verma, nine organizations representing clinical laboratories and pathologists complained that the changes were made “without notice or stakeholder input.” What’s more, the changes will be highly disruptive to coding and payment for clinical lab and pathology testing, the groups said.

For these reasons, the changes should be withdrawn, and CMS should work with clinical lab directors and pathologists to revise the guidelines, said the letter dated March 17.

The guidelines issued in December are problematic for two reasons. First, labs may not know how to bill for the tests involved, Black-Schaffer said, and second, when CMS changes the NCCI Policy Manual, it does not routinely seek input from labs, as it does for formal rule-making.

“Any evaluation of these policies should reflect the current standard of care in test ordering and performance and include an opportunity for stakeholders to review and provide comment on draft policies prior to their finalization and implementation,” the letter said.

Nine Lab Associations

The groups signing the letter were:

  • AdvaMedDx;
  • American Association for Clinical Chemistry;
  • American Clinical Laboratory Association;
  • American Society for Microbiology;
  • Association for Molecular Pathology;
  • Coalition for 21st Century Medicine;
  • College of American Pathologists (CAP);
  • Physician Fee Schedule Pathology Payment Coalition; and,
  • Point of Care Testing Association.

As a representative of CAP, Black-Schaffer was unaware if Verma had responded to the letter as of the last week of March.

Many Laboratory Tests

The guidelines affect “laboratory procedures,” an ill-defined term that could apply to a large number of molecular and genetic tests that involve multiple steps, producing multiple results. Many such tests are done using next-generation sequencing. As its name implies, NGS automates multiple sequencing steps, Black-Schaffer added, resulting in multiple potentially reportable results.

“It’s probably too early to tell for sure what’s happening as to whether laboratories are getting paid or if they know how to bill for these tests,” Black-Schaffer told THE DARK REPORT. “That’s because it’s up to the various Medicare Administrative Contractors (MACs) to implement these new rules.

What Do Guidelines Mean?

“To do that, the MACs must figure out what the guidelines mean first,” he continued. “Then, on the other side, laboratory service providers must figure out what they mean as well.”

The edits could create significant problems for providers of Medicare and Medicaid pathology services for two reasons: They’re inconsistent with the previous NCCI policy manual instructions and they’re inconsistent with the general coding guidance from the AMA, Black-Schaffer said.

Inconsistent coding instructions are a nightmare for any lab seeking to bill for such tests and hoping to get paid quickly and in full because any test billed incorrectly can be rejected. Or, if the test claim is paid and an auditor later determines the lab should not have been paid, the laboratory must repay that amount or Medicare or Medicaid can demand repayment.

“Anytime there’s an inconsistency in coding instructions for lab tests, there’s a possibility that a lab will get its coding wrong,” added Black-Schaffer. “This means either it gets paid when it shouldn’t, or, the laboratory might not get paid when it should.”

How to bill and whether clinical laboratories and anatomic pathology groups will get paid are the most significant problems with the NCCI guidelines this year, he explained. But how and when CMS makes changes to the coding guidelines often creates problems, he added.

“The NCCI manual comes out every year, and when it does, we will sometimes get asked a question about a particular issue,” Black-Schaffer commented. “At other times—as in this instance—federal officials basically say, ‘Here is the NCCI manual for the coming year,’ and we have to comply with it.

“The changes this year were inconsistent with earlier guidance and those changes were issued shortly before they were implemented,” he continued. “Thus, laboratories found out less than three weeks before the changes went into effect. Labs also had no opportunity to ask questions.

“Lab billing staff have questions about when these reportable results are supposed to be grouped together or split apart,” he added. “Then, if a lab follows the NCCI manual, it may not be following the correct coding guidance from earlier NCCI guidelines or the guidance from AMA.

“Aren’t all those sources of guidance supposed to be consistent with one another?” he asked. “That lack of consistency is a problem for billing departments because they try to code correctly and the last thing they want is to have problems in their billing departments.”

Questions about Guidelines

Asked which tests are affected by the new guidelines, Black-Shaffer said that depends on many factors. “The answer really depends on what is meant when we use the term ‘laboratory procedure’ to describe a test,” he said. “Typically NGS testing produces many reportable results that are relevant to the patient’s condition. So in that sense, the new guidelines potentially could be applied quite broadly.

“It means that for general purpose laboratories, the rate of molecular testing that produces many reportable results may be a small fraction of their overall testing volume,” he explained.

“However, there are a number of molecular pathology laboratories for which this is what they do for almost every test,” noted Black. “These molecular and genetic testing laboratories are not going to want to wait for guidance because they want to get paid. Yet, they don’t know how to bill in a compliant fashion. Neither of those alternatives is very attractive.”

CMS said that on Feb. 1, the NCCI Medicare and Medicaid Program Contract was awarded to a new contractor, Capitol Bridge LLC. Capitol Bridge will instruct other MACs about how to implement the NCCI guidelines, Black-Schaffer explained.

Opportunity to Work Together

Black-Schaffer made a point of saying that he was not critical of Capitol Bridge. In fact, he added, given that Capitol Bridge was recently named to the NCCI contract, the laboratory industry and CMS have an opportunity to work together and with representatives of Capitol Bridge to implement the changes.

“By necessity, clinical labs and CMS need a formalized process for review and input for changes to the NCCI policy manual,” he commented.

“If you think about it, the name NCCI means its goal is to do correct coding. And how could anybody be against that?” Black asked. “The problem is that if there is not a process involving all stakeholders, it isn’t necessarily going to be correct coding.

“In this instance, the process produced demonstrably incorrect coding advice because this year’s changes are inconsistent with earlier coding advice,” he added. “It’s unclear what CMS was hoping to accomplish with these changes.

Hopes for Two Outcomes

“The nine lab associations that sent the letter to CMS hope there are two positive outcomes,” noted Black. “First, that this specific set of instructions in the NCCI policy manual be rescinded and revised to whatever the real intent was with these changes.

“Second, that the problems we’ve seen this year—and the fact that we have a new contractor—will lead to a better and more formalized process that will work reliably in the future,” he concluded.

Contact W. Stephen Black-Schaffer, MD, at 617-724-1463.

For Clinical Laboratory and Pathology Billing, Latest NCCI Coding Guidance Raises Questions

IN A LETTER TO THE FEDERAL CENTERS FOR MEDICARE AND MEDICAID SERVICES, nine clinical laboratory associations complained about changes CMS made to the National Correct Coding Initiative (NCCI) Policy Manual.

The letter sent March 17 had an example of a problem that affects payment for some lab tests for Medicare and Medicaid beneficiaries. An instruction in the NCCI policy manual states that if a lab procedure produces multiple reportable test results, labs should use only a single HCPCS or CPT code for the procedure, the letter said. “If there is no HCPCS/CPT code that describes the procedure, the laboratory shall report a miscellaneous or unlisted procedure code with a single unit of service,” the CMS guidance says.

Which Code to Use?

That guidance alone raises difficult questions. For example, does it mean each lab producing multiple reportable test results would choose a code to apply to such results? If so, would different labs choose different codes in such situations? If different labs use different codes, how would Medicare contractors or any Medicaid managed care plan know which lab test is involved?

In the letter, the nine groups said, “This instruction is overbroad and unclear. It is unclear what constitutes ‘a laboratory procedure’ per the new manual revisions. Many laboratory tests are performed in batches or using multiplex processes that produce multiple, different, clinically significant reportable test results.”

What’s more, the letter said, if each batch or multiplex process is treated as a single procedure, tests ordered for different patients but processed in a batch could constitute a single procedure.

“Additionally, if each test performed using a multiplex process is considered a single procedure, many procedures that currently are reported with test-specific codes would need to be reported using miscellaneous or unlisted procedure codes,” the letter added.

Doing so would create five significant problems, the nine groups explained. These changes would:

  • Violate AMA guidance to use the most specific CPT codes;
  • Make it difficult for Medicare claims processors to determine which tests were performed;
  • Put a heavy claims processing burden on Medicare Administrative Contractors (MACs) and state Medicaid programs;
  • Cause substantial delays in payment for laboratories; and,
  • Limit the data CMS needs to set rates under the Protecting Access to Medicare Act (PAMA).

“All the signatories to this letter are concerned that these NCCI guidelines are an impediment to the normal processes that laboratories use when billing for these tests,” said W. Stephen Black-Schaffer, MD, a pathologist at Massachusetts General Hospital and an Associate Professor of Pathology at the Harvard Medical School.


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