(Medicare Claims Processing Manual)

Section 1833(h)(5)(A) of the Act provides that a referring laboratory may bill for clinical laboratory diagnostic tests on the clinical laboratory fee schedule for Medicare beneficiaries performed by a reference laboratory only if the referring laboratory meets certain conditions.  Payment may be made to the referring laboratory but only if one of the following conditions is met:   the referring laboratory is located in, or is part of, a rural hospital;   the referring laboratory is wholly owned by the entity performing such test, the referring laboratory wholly owns the entity performing such test, or both the referring laboratory and the entity performing such test are wholly -owned by a third entity; or   the referring laboratory does not refer more than 30 percent of the clinical laboratory tests for which it receives requests for testing during the year (not counting referrals made under the wholly-owned condition described above).  In the case of a clinical laboratory test provided under an arrangement (as defined in 1861(w)(1)) made by a hospital, CAH or SNF, payment is made to the hospital or SNF.  Examples of 30 Percent Exception:  (1) - A laboratory receives requests for 200 tests, performs 139 tests, and refers 61 tests to a non-related laboratory.  All tests referred to a non -related laboratory are counted.  Thus, 30.5 percent (61/200) of the tests are considered tests referred to a non-related laboratory and, since this exceeds the 30 percent standard, the referring laboratory may not bill for any Medicare beneficiary laboratory tests referred to a non- related laboratory.   (2) - A laboratory receives requests for 200 tests, performs 139 tests and refers 15 to a related laboratory and 46 to a non-related laboratory.  Only 23 percent of the tests were referred to non-related laboratories.  Since this is less than 30 percent, the r eferring laboratory may bill for all tests.   If it is later found that a referring laboratory does not, in fact, meet an exception criterion, the A/B MAC (B) should recoup payment for the referred tests improperly billed.  The RO shall take whatever action is necessary to correct the problem.   NOTE:  This provision of 6111(b) of OBRA of 1989 has no effect on hospitals that are paid under 1833(h)(5)(A)(iii).  NOTE:  Laboratory services provided to a SNF inpatient under Part A are billed by the SNF, not the laboratory, due to consolidated billing for SNFs.  Only one laboratory may bill for a referred laboratory service.  It is the responsibility of the referring laboratory to ensure that the reference laboratory does not bill Medicare for the referred service when the referring laboratory does so (or intends to do so).  In the event the reference laboratory bills or intends to bill Medicare, the referring laboratory may not do so.  40.1.1 - Claims Information and Claims Forms and Formats  (Rev. 85, 02-06-04)  Claims for referred laboratory services may be made only by suppliers having specialty code 69, i.e., independent clinical laboratories.  Claims for referred laboratory services made by other entities will be returned as unprocessable.  Independent laboratories shall use modifier 90 to identify all referred laboratory services.  A claim for a referred laboratory service that does not contain the modifier 90 is returned as unprocessable if the claim can otherwise be identified as being for a referred service.   The name, address, and CLIA number of both the referring laboratory and the reference laboratory shall be reported on the claim.  40.1.1.1 - Paper Claim Submission to A/B MACs (B)  (Rev. 3255, Issued: 05- 08-15, Effective: 10-01-15, Implementation: 10-05-15)  An independent clinical laboratory may file a paper claim form shall file Form CMS -1500 for a referred laboratory service (as it would any laboratory service). The line item services must be submitted with a modifier 90.  An independent clinical laboratory that submits claims in paper format) may not combine non- referred (i.e., self-performed) and referred services on the same CMS 1500 claim form.  When the referring laboratory bills for both non- referred and referred tests , it shall submit two separate claims, one claim for non -referred tests, the other for referred tests. If billing for services that have been referred to more than one laboratory, the referring laboratory shall submit a separate claim for each laboratory t o which services were referred (unless one or more of the reference laboratories are separately billing Medicare).  A paper claim that contains both non-referred and referred tests is returned as unprocessable.  When the referring laboratory is the billing laboratory, the reference laboratorys name, address, and ZIP Code shall be reported in item 32 on the CMS-1500 claim form to show where the service (test) was actually performed.  The NPI shall be reported in i tem 32a. Also, the CLIA number of the reference laboratory shall be reported in item 23 on the CMS-1500 claim form.  A paper claim that does not have the name, address, and ZIP Code of the reference laboratory in item 32 and NPI in 32a or the CLIA number of the reference laboratory in item 23 is returned as unprocessable.  EXAMPLE:  A physician has ordered the ABC Laboratory to perform carcinoembryonic antigen (CEA) and hemoglobin testing for a patient.  Since the ABC Laboratory is approved to perform tests only within the hematology LC level (which includes the hemoglobin test), it r efers the CEA testing (which is a routine chemistry LC) to the XYZ laboratory.  Result:  The ABC laboratory submits a claim for the hemoglobin test and reports its CLIA number in item 23 on the CMS-1500 form.  Since the ABC laboratory referred the CEA test to the XYZ laboratory to perform, the ABC laboratory (billing laboratory) submits a second claim for the CEA testing, reporting XYZs CLIA number in item 23 on the CMS-1500 form.  The XYZ laboratorys name, address, and ZIP Code are also reported in item 32 and the NPI is reported in item 32a on Form CMS-1500 to show where the servic e (test) was actually rendered.   NOTE:  Effective for claims submitted with a receipt date on and after October 1, 2015, the billing physician or supplier must report the name, address, and NPI of the performing physician or supplier in Item 32a on anti-markup and reference laboratory claims, ev en if the performing physician or supplier is enrolled in a different A/B MAC (B) jurisdiction.  See Pub. 100-04, Chapter 1, 10.1.1 for more information regarding claims filing jurisdiction.   40.1.1.2 - Electronic Claim Submission to A/B MACs (B)  (Rev. 3255, Issued:  05-08-15, Effective:  10-01-15, Implementation:  10-05-15)  Electronic Claim Submission   ASC X12 837 professional claim format (HIPAA compliant version):  CLIA number:   An electronic claim for laboratory testing will require the presence of the performing (and billing) laboratorys CLIA number; if tests are referred to another laboratory, the CLIA number of the laboratory where the testing is rendered must also be on the claim.  An electronic claim for laboratory testing must be submitted using the following rules:  Electronic claim: the billing laboratory performs all laboratory testing:   The independent laboratory submits a single claim for CLIA-covered laboratory tests and reports the billing laboratorys number in:  loop 2300, REF02.  REF01 = X4   Electronic claim: billing laboratory performs some laboratory testing; some testing is referred to another laboratory:   The claim will not be split; CLIA numbers from both the billing and reference laboratories must be submitted on the same claim.  The presence of the 90 modifier at the line item service identifies the referral tests.  Referral laboratory claims are only permitted for independently billing clinical laboratories, specialty code 69.   The billing laboratory submits, on the same claim, tests referred to another (referral/rendered) laboratory, with modifier 90 reported on the line item and reports the referral laboratorys CLIA number in:   loop 2400, REF02.  REF01 = F4   EXAMPLE:  A physician has ordered the DEF independent laboratory to perform glucose testing and tissue typing for a patient.  Since the DEF Laboratory is approved to perform only at the routine chemistry LC level (which includes glucose testing), it refers the tiss ue-typing test to the GHI laboratory.   The DEF laboratory submits a single claim for the glucose and tissue typing tests; the line item service for the glucose test is submitted without a 90 modifier since the DEF laboratory performed this test.  The CLIA number for the DEF laboratory is ente red in the electronic claim in:   loop 2300, REF02.  REF01 = X4   On the same claim, the line item service for the tissue typing test is submitted with a 90 modifier and the referral/rendering GHI laboratorys CLIA number is entered on the electronic claim in:   loop 2400, REF02.  REF01 = F4   Reference Laboratorys Address:   An electronic claim for laboratory testing requires the presence of the performing and billing laboratorys, name and address.  The performing laboratory for a service with a line item CPT 90 modifier requires provider information for the appropriate 837 l oop.  NOTE:  Effective for claims submitted with a receipt date on and after October 1, 2015, the billing physician or supplier must report the name, address, and NPI of the performing physician or supplier on the claim on reference laboratory claims, even if the perfo rming physician or supplier is enrolled in a different A/B MAC(B) jurisdiction.  See Pub. 100- 04, Chapter 1, 10.1.1 for more information regarding claims filing jurisdiction.   40.2 - Payment Limit for Purchased Services  (Rev. 16, 10- 31-03)  For payment instructions for Physician purchased diagnostic tests refer to the Claims Processing Manual 100-04, Chapter 1, 30.2.9, Chapter 13 20.2.4ff.   When an Independent Laboratory (IL) bills for the technical component (TC) of a physician pathology service purchased from a separate physician or supplier, the payment amount for the TC is based on the lower of the billed charge or the Medicare Physician Fee Schedule.  The purchase diagnostic test payment provision does not apply, thus, the purchase service information shall not be entered on the claim.  All purchased diagnostic services are based on the Medicare Physician Fee Schedule and are subject to the jurisdiction rules for that fee schedule.   The IL must perform at least one of the component services.  If they purchase both the PC and the TC services, only the physician or supplier that performed those services may bill.   40.3 - Hospital Billing Under Part B  (Rev. 3014, Issued: 08- 06-14, Effective: ICD - 10: Upon Implementation of ICD -10 ASC -X12: 01- 01-12, Implementation: ICD -10: Upon Implementation of ICD -10 ASC X12: 09- 08-14)  Hospital laboratories, billing for either outpatient or non- patient claims, bill the A/B MAC (A).   Neither deductible nor coinsurance applies to laboratory tests paid under the fee schedule.   Hospitals must follow requirements for submission of the ASC X12 837 institutional claim or the hardcopy Form CMS -1450.  (See Chapter 25 for a description of the data set, and for requirements for the paper form.  See the ASC X12 837 implementation guide f or billing requirements for the electronic claim,).