Medicare Coverage for Clinical Diagnostic Lab Services

The Centers for Medicare and Medicaid Services (CMS)has proposed that it plans to pay hospitals $32.54 for diagnostic mammograms in 2002, which is a 7.5% cut from the present rate of $35.17. Many experts have deemed current rates too low forcing many facilities to leave this business, which in turn has caused widespread delays for such tests being perfomed for routine mammograms. Overall the proposals would increase payments to hospitals by 2.3%. Public input will be allowed before the proposals become finalized. The normal period for public comment is 60-days but in this particular matter only a 40-day period has been allotted for public comment. The CMS has posted all the proposed new rates on its site. More than half of all mammograms Medicare pays for are done in hospitals. During 2000, Medicare paid for nearly 6 million mammograms. These fees do not include the fee that the doctor charges for his services. According to the Breast Cancer Foundation there were 9,600 certified mammography centers in June 2001 as opposed to 9,873 of them in March.

The CMS is also proposing a 22% increase to $760.09 for surgical outpatient biopsy, as opposed to paying a 6% reduction for reimbursement for needle biopsy to $384.87. the needle biopsy procedure takes about 15 minutes under a local anesthetic.Thus the CMS is giving encouragement to the doctors to perform the costlier procedure.The American Cancer Society estimated that there will be 192,200 new cases of breast cancer diagnosed this year, and that 40,200 women will die from the disease in 2001. About 1.2 million women get breast biopsies every year..

Your doctor informs you that he will need to have some clinical lab diagnostic tests performed on you before he can properly evaluate your medical condition. These are tests that are performed on tissue samples or specimens, such as blood or urine. Once the test samples or specimens are taken they are then forwarded to a lab for evaluation. The question arises however as to whether or not Medicare will pay for the tests.

The following are the criteria that are used in determining whether or not Medicare will pay for the test:

There are times where Medicare will not pay for the cost of the test. If Medicare approves the test it is an assigned service and as such is reimbursable at 100% of the established fee. There are some tests wherein Medicare will only pay a portion of the cost after you have met your annual deductible.

When you sign the form giving your permission to perform the test it frequently contains a clause called the Advanced Beneficiary Notice (ABN). Sometimes this notice may be on a separate form that you are requested to sign. The ABN informs you that Medicare may not pay for the test, and that you will be responsible yourself for any costs incurred as a result of the test. You are free not to sign an ABN if you do not wish to be responsible for payment if Medicare denies payment.

Effective January 1,1997, the New York State Department of Health imposed a surcharge on laboratory testing performed on specimens obtained within the state. Medicare payments are exempt from any such surcharge. If Medicare does not cover the cost of the test you may be held responsible for the surcharge. The proceeds from the surcharge are used to fund bad debt and charity health care for New York patients. Under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) any independent or physician's office laboratory must have a certificate of registration to perform laboratory services that can be paid for through Medicare. The CLIA certification number is required on claims submitted to Medicare for reimbursement. It is the lab's responsibility to submit the claim to Medicare for reimbursement, secure the required information from the doctor, and submit a complete claim. You are not responsible for an incomplete claim form.



By Allan Rubin
updated August 25, 2001

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