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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. 
 
Medicare guidance says the Clinical Laboratory Improvements Amendments of 1988 (CLIA), Public Law 100-
578, amended Section 353 of the Public Health Service Act (PHSA) to extend jurisdiction of the Department of 
Health and Human Services to regulate all laboratories that examine human specimens to provide information 
to assess, diagnose, prevent, or treat any disease or impairment. The purpose of the CLIA program is to assure 
that laboratories testing specimens in interstate commerce consistently provide accurate procedures and 
services. As a result of CLIA, any laboratory soliciting or accepting specimens in interstate commerce for 
laboratory testing is required to hold a valid license or letter of exemption from licensure issued by the 
Secretary of HHS. The term interstate commerce means trade, traffic, commerce, transportation, or 
communication between any state, possession of the United States, the Commonwealth of Puerto Rico, or the 
District of Columbia, and any place outside thereof, or within the District of Columbia. The CLIA mandates 
that virtually all laboratories, including physician office laboratories (POLs), meet applicable Federal 
requirements and have a CLIA certificate in order to receive reimbursement from Federal programs. CLIA also 
lists requirements for laboratories performing only certain tests to be eligible for a certificate of waiver or a 
certificate for Physician Performed Microscopy Procedures (PPMP). Since 1992, A/B MACs (B) have been 
instructed to deny clinical laboratory services billed by independent laboratories which did not meet the CLIA 
requirements. POLs were excluded from the 1992 instruction but included in 1997. The CLIA number must be 
included on each claim billed on the ASC X12 837 professional format or Form CMS-1500 claim for 
laboratory services by any laboratory performing tests covered by CLIA. See Section 70.2 and 70.10 for more 
information. CWF edits A/B MAC (B) claims to ascertain that the laboratory identified by the CLIA number is 
certified to perform the test. (CWF uses data supplied from the certification process.) See Chapter 27 for 
related specifications. Providers that bill A/B MACs (A) are responsible for verifying CLIA certification prior 
to ordering laboratory services under arrangement. The survey process validates that these providers have 
procedures in place to insure, that laboratory services are provided by CLIA approved laboratories. Refer to the 
Medicare State Operations Manual for information about CLIA license or the CLIA licensure exemptions. 
The structure of the CLIA number follows: 
Positions 1 and 2 contain the State code (based on the laboratorys physical location at time of registration); 
 Position 3 contains the letter D"; and Positions 4-10 contain the unique CLIA system assigned number that 
identifies the laboratory. (No other laboratory in the country has this number.) Initially, providers are issued a 
CLIA number when they apply to the CLIA program. Independent dialysis facilities must obtain a CLIA 
certificate in order to perform clotting time tests. You can find this guidance in the Medicare Claims Processing 
Manual, Chapter 16  Laboratory Services, Section 70 Clinical Laboratory Improvement Amendments 
(CLIA), Section 70.1  Background, Section 70.3 Verifying CLIA Certification and Section 70.4  CLIA 
Numbers. On the Medicare web site, CMS.gov, Clinical Laboratory Improvement Amendments (CLIA), the 
file Research Testing and CLIA (PDF) states The Clinical Laboratory Improvement Amendments of 1988 
(CLIA) were established to strengthen federal oversight of clinical laboratories to ensure the accuracy and 
reliability of patient test results. CLIA applies to all laboratories that examine materials derived from the 
human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease 
or impairment of, or the assessment of the health of, human beings. (see 42 U.S.C. Section 263a(a)). 
With respect to CLIA applicability, the CLIA regulations do not differentiate between facilities performing 
provider-ordered testing and those performing non-provider-ordered testing. All facilities that meet the 
definition of a laboratory under the CLIA statute and regulations must obtain an appropriate CLIA certificate 
prior to conducting patient testing. Whether a test service is billed to Medicare has no bearing on CLIA 
applicability. 
How does CLIA define a laboratory? The CLIA regulations define a laboratory to be a facility for the 
biological, microbiological, serological, chemical, immunohematological, hematological, biophysical, 
cytological, pathological, or other examination of materials derived from the human body for the purposes of 
providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the 
assessment of the health of, human beings. These examinations also include procedures to determine, measure, 
or otherwise describe the presence or absence of various substances or organisms in the body (42 C.F.R. 
Section 493.2 (definition of laboratory). 
How does the Centers for Medicare & Medicaid Services (CMS) determine CLIA applicability? CLIA 
applicability is determined using the regulatory definition of laboratory quoted above. Specifically, CLIA 
applies when: (1) patient-specific results are reported from the laboratory to another entity; AND (2) the results 
are made available for the diagnosis, prevention, or treatment of any disease or impairment of, or the 
assessment of the health of, human beings. As stated above, whether a test service is billed to Medicare has no 
bearing on CLIA applicability. Therefore, if a facility performs tests for the above-stated purposes, it is 
considered a laboratory under CLIA and must obtain a certificate from the CLIA program that corresponds to 
the highest complexity of tests performed. 
What facilities need to have a CLIA certificate? CLIA requires all facilities that perform even one test, 
including waived tests, on materials derived from the human body for the purposes of providing information 
for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, 
human beings to obtain a CLIA certificate and meet CLIA regulatory requirements. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.