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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that clinical laboratory tests include some services described as anatomic pathology services in 
CPT (i.e., certain cervical, vaginal, or peripheral blood smears). The CPT code 85060 is used only when a 
physician interprets an abnormal peripheral blood smear for a hospital inpatient or a hospital outpatient, and the 
hospital is responsible for the technical component. When an independent laboratory bills a physician 
interpretation of an abnormal peripheral blood smear, the service is considered a complete or global service, 
and is not billed under the CPT code 85060. A physician interpretation of an abnormal peripheral blood smear 
performed by an independent laboratory is considered a routine part of the ordered hematology service (i.e., 
those tests that include a different white blood count) 
 
Medicare guidance says Professional Component (PC)/Technical Component (TC) Indicator 8 =Physician 
interpretation codes: This indicator identifies the professional component of clinical laboratory codes for which 
separate payment may be made only if the physician interprets an abnormal smear for hospital inpatient. This 
applies only to code 85060. No TC billing is recognized because payment for the underlying clinical laboratory 
test is made to the hospital, generally through the PPS rate. 
No payment is recognized for code 85060 furnished to hospital outpatients or non-hospital patients. The 
physician interpretation is paid through the clinical laboratory fee schedule payment for the clinical laboratory 
test. You can find this information in the Medicare Claims Processing Manual Chapter 16 - Laboratory 
Services, 80.2 - Anatomic Pathology Services. 
 
The rules say that procedure Code: 85060, PC/TC  8 .You can find this information in the 2022 National 
Physician Fee Schedule Relative value July Release. 
 
The rules say that 22 On Campus-Outpatient Hospital (description revised January 1, 2016); A portion of a 
hospitals main campus which provides diagnostic, therapeutic (both surgical and nonsurgical), and 
rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization. You 
can find this information in the Medicare Claims Processing Manual Chapter 26 - Completing and Processing 
Form CMS-1500 Data Set, 10.5 - Place of Service Codes (POS) and Definitions.  
The rules say that physician hematology services include microscopic evaluation of bone marrow aspirations 
and biopsies. It also includes those limited number of peripheral blood smears which need to be referred to a 
physician to evaluate the nature of an apparent abnormality identified by the technologist. These codes include 
85060, 38220, 85097, and 38221. A/B MACs (B) pay the PC for the interpretation of an abnormal blood smear 
(code 85060) furnished to a hospital inpatient by a hospital physician or an independent laboratory. For other 
hematology codes, payment may be made for the PC component if the service is furnished to a patient by a 
hospital physician or independent laboratory. In addition, payment may be made for these services furnished to 
patients by an independent laboratory. Blood banking services of hematologists and pathologists are paid under 
the physician fee schedule when analyses are performed on donor and/or patient blood to determine compatible 
donor units for transfusion where cross matching is difficult or where contamination with transmissible disease 
of donor is suspected. The blood banking codes are 86077, 86078, and 86079 and represent professional 
component only services. You can find this information in the Medicare Claim Processing Manual, Chapter 12, 
section 60. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.