AS MANAGED CARE PAYERS INCREASINGLY REQUIRE PRIOR AUTHORIZATION FOC GENETIC TESTS, clinical laboratories should understand the ins and outs of what it takes to get reimbursed for testing they provide.
Almost all payers now require prior authorization (PA) for genetic testing, said Heather Agostinelli, Vice President, strategic revenue operations, with XIFIN Inc., a revenue cycle management firm based in San Diego. Tests that most commonly require PA are:
Fragile X syndrome,
SMA (Spinal Muscular Dystrophy),
Exome testing, and,
While prior authorization should be initiated by the ordering physician, all too often that does not happen and the clinical laboratory is left to seek approval for testing, Agostinelli noted.
Seeking Prior Authorization
“Seeking PA can require submission of test requisitions, test results, notes of any genetic counseling that has occurred, along with medical records and notes from the ordering physician,” she said. “There is no standardization among payers regarding the PA process, so labs must address each submission separately.
“Labs know if they want to get paid, they have to take control,” Agostinelli explained. “Unfortunately, seeking PA through a manual process can be time consuming, often taking at least 30 minutes per authorization, if not more.”
Among the biggest challenges in receiving PA from a payer are:
Not meeting medical necessity,
Unable to obtain necessary documentation from the ordering physician,
Missing a deadline for requesting PA (some insurers give 48 hours from the time the specimen is received), and,
Payer requirements that genetic counseling be performed prior to the test being run and PA being granted.
Critical Info from Doctors
Automation of the process can greatly reduce time spent on seeking PA, but it does not necessarily make it easier to obtain critical information from ordering physicians. There are vendors (e.g., Infinx, Glidian, Cover My Test) who will assist laboratories or physicians with prior authorization. But labs that do not have an automated PA system, or that do not use a billing company or outside vendor, will need to call the provider to get the information.
“Often, physicians are slow to share their notes and records and require multiple follow-ups to spur them into action,” Agostinelli stated. “That makes getting prior authorization even more difficult.”
When clinical laboratories submit pre-authorization requests for genetic testing, 40% to 50% of those requests are denied. “Some labs are now changing their processes so that they no longer automatically run the test before they get prior authorization,” she observed.
“In these cases, if the PA is denied, the lab will contact the patient and ask if they want to be moved to a self-pay rate or if they want to cancel the test,” she added.
If a lab chooses to put this policy in place it should involve both its finance and sales department, Agostinelli advised. “This is a sensitive area,” she said. “A lab does not want to anger its referral sources, but at the end of the day, labs need to make a profit.” (See sidebar below.)
Medical Necessity Criteria
Receiving prior authorization approval from a payer for a molecular test does not necessarily mean that the claim will be paid, she added. Prior authorization simply means the test meets the medical necessity criteria, but it does not address the payer coverage policies. If the payer policies prohibit out-of-network labs from being paid for testing, then the PA may not override the noncoverage policy.
A clinical lab that performs an unusually high number of genetic or clinical tests might be targeted by payers for prepayment review audits. These payers will then require that a lab—when it submits a claim—to also submit extensive documentation, such as the requisition, test results and medical notes from the ordering physician.
Prepayment Review Audits
“Anthem and UnitedHealthcare (UHC) are known for conducting prepayment review audits,” Agostinelli noted. “During the time of this audit, and while the claims are being reviewed, the lab won’t be paid by that payer.
“This process can easily take three to six months or more,” she continued. “It is a financial cash-flow hit to that lab if the audit is by one of the large payers in their payer mix. Once the audit is over, in most cases those claims are released and billed to the payer. The lab should not have to deal with timely filing policy, as that should be waived by the payer.
“Prepayment review audits are very painful because they are manual and the lab’s response takes considerable time to prepare,” Agostinelli said. “These payers should go directly to the ordering physician—not to the lab—for any documentation they require from the ordering physician. The lab can provide the claims, the requisition, and the results. But the payer should go to the provider for the clinical notes.
“Unfortunately, that rarely happens, and clinical laboratories often end up obtaining the provider records and notes themselves,” she explained, noting, “This is a major pain point for most labs billing for genetic tests.”
Genetic Test Coverage
One challenge clinical laboratories face is staying current with the various payer policies governing coverage of genetic testing, especially molecular testing that requires PA. Certain payers are good about putting out regular updates with changes to coverage policies, but others are not, Agostinelli noted.
“UnitedHealthcare (UHC) is the insurer with the most restrictive coverage policies,” she said. “For example, UHC has a strict coverage policy for ClariTest, which identifies the risk for fetal chromosomal abnormalities. UHC will only cover the test for women 35 and older who have a family history. Cigna, Humana, and Aetna also have relatively strict policies. In addition, most Medicaid programs do not cover genetic testing.
“Labs that are most successful at navigating the PA process and subsequent appeal, have strong payer relations teams,” she said. “The majority of labs do not. It’s something in which your lab must invest. It’s more than just hiring someone who can make phone calls; you want to hire people who have deep contacts within the industry. Your lab must spend what is necessary to have a strong payer relations team.”
Antiquated Payer Policies
Some payer policies are simply antiquated, Agostinelli noted. “A clinical laboratory can challenge a policy by requesting an objective review. But that can be expensive for both the lab and the payer. What’s more, the lab must weigh the pros and cons of challenging a payer, given that good relationships with payers are critical.
“In addition to having a strong payer relations team and keeping up with payer policies, it is essential for clinical labs doing genetic testing to have appeals strategies in place,” Agostinelli advised. Labs may need to appeal a denial as many as two or three times before getting paid, she added.
For tests that may not meet medical-necessity requirements, Agostinelli suggests that clinical labs either not perform the test or establish a self-pay rate. “It’s not sustainable for labs to keep performing genetic tests for which they are not paid. Labs need to have policies in place for what happens when a test does not meet medical-necessity requirements of a patient’s health plan.”
Use of More Specific Codes
Another issue involves coding. “Clinical laboratory personnel should also take the time to ensure they use the correct codes on their claim submissions,” Agostinelli stated. “CPT code 84179, a genetic tier 2 molecular pathology code, is one of the most-denied CPT codes.
“Take the time to find out if there is a more specific code,” she continued. “It pays to have someone on your team who really knows coding. It’s worth it to have an outside coding expert come in periodically to review your coding against your test menu. The goal is to ensure your lab uses the most appropriate code and is using all codes for which your lab is entitled to bill.”
While it may seem there are a lot of hoops to jump through in order to get paid for genetic testing, the payoff in the end will be worth it, Agostinelli notes.
“Many diagnostic providers take a portion of their profits to invest in new testing that benefits us all,” she said. “So, getting these labs paid is crucial to advance genetic and molecular testing.”
Are Referring Sources Profitable or Not?
IN SOME CASES, CLINICAL LABORATORIES DOING GENETIC TESTING will have referral sources who consistently order testing that is denied because it does not meet medical necessity criteria. When that happens, laboratories need to take a close look at what revenue those referral sources generate, advised Heather Agostinelli, Vice President, strategic revenue operations, with XIFIN Inc.
“To determine this requires looking at the referral source at a very granular level, using the monthly reports showing what the referral source yields in payment and denials,” she said. “You should be able to identify those offenders and that allows your lab team to make business decisions about those offenders. Small labs may not want to ‘fire’ clients, but they should keep in mind that big labs regularly review the cost-benefit tradeoff and definitely will fire clients whose business is unprofitable.”
Agostinelli said it is worthwile to attempt to educate the problematic referral sources about what constitutes medical necessity before cutting ties. Some physicians may not have a good understanding about what medical necessity requirements are for a particular genetic test.
Education can go a long way toward solving the problem. However, if the offending provider continues to order unnecessary tests, the lab must make a business decision about whether it is worthwhile to continue that relationship.
Contact Heather Agostinelli at 858-436- 9535 or email@example.com.