Important Medicare Part B New Jersey News

2005 Annual Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment

Provider Types Affected
Clinical Laboratories

Provider Action Needed
This article and related CR3526 contains important information regarding the 2005 annual updates to the clinical laboratory fee schedule and for laboratory costs related to services subject to reasonable charge payments. It is important that affected laboratories understand these changes to assure correct and accurate payments from Medicare.

Background

Update to Clinical Laboratory Fees
In accordance with §1833(h)(2)(A)(i) of the Social Security Act (the Act), as amended by Section 628 of the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003, the annual update to the local clinical laboratory fees for 2005 is zero (0) percent.

Section 1833(a)(1)(D) of the Act provides that payment for a clinical laboratory test is the lesser of the actual charge billed for the test, the local fee, or the National Limitation Amount (NLA). For a cervical or vaginal smear test (pap smear), §1833(h)(7) of the Act requires payment to be the lesser of the local fee or the NLA, but not less than a national minimum payment amount (described below). However, for a cervical or vaginal smear test (pap smear), payment may also not exceed the actual charge.

The Part B deductible and coinsurance do not apply for services paid under the clinical laboratory fee schedule.

National Minimum Payment Amounts
For a cervical or vaginal smear test (pap smear), §1833(h)(7) of the Act requires payment to be the lesser of the local fee or the NLA, but not less than a national minimum payment amount. Also, payment may not exceed the actual charge. The 2005 national minimum payment amount is $14.76 ($14.76 plus zero percent update for 2005). The affected codes for the national minimum payment amount include the following:

National Limitation Amounts (Maximum)
For tests for which NLAs were established before January 1, 2001, the NLA is 74 percent of the median of the local fees. For tests for which NLAs are first established on or after January 1, 2001, the NLA is 100 percent of the median of the local fees in accordance with §1833(h)(4)(B)(viii) of the Act.

Access to 2005 Clinical Laboratory Fee Schedule
Internet access to the 2005 clinical laboratory fee schedule data file should be available after November 18, 2004, at: http://www.cms.hhs.gov/paymentsystems

Interested providers should use the Internet to retrieve the 2005 clinical laboratory fee schedule. It will be available in multiple formats: Excel, text, and comma delimited.

Public Comments
On July 26, 2004, the Centers for Medicare & Medicaid Services (CMS) hosted a public meeting to solicit input on the payment relationship between 2004 codes and new 2005 Current Procedural Terminology (CPT) codes. The meeting announcement was published in the Federal Register on May 28, 2004, pages 30658-30659, and on the CMS Web site.

Recommendations were received from many attendees, including individuals representing laboratories, manufacturers, and medical societies. CMS posted a summary of the meeting and the tentative payment determinations on its web site at http://www.cms.hhs.gov/paymentsystems. Additional written comments from the public were accepted until September 24, 2004.

Comments after the release of the 2005 laboratory fee schedule can be submitted to the following address, so that CMS may consider them for the development of the 2006 laboratory fee schedule.

Centers for Medicare & Medicaid Services (CMS)
Center for Medicare Management
Division of Ambulatory Services
Mailstop: C4-07-07
7500 Security Boulevard
Baltimore, Maryland 21244-1850

A comment should be in written format and include clinical, coding, and costing information. To make it possible for CMS and its contractors to meet a January 3, 2006 implementation date, comments must be submitted before August 1, 2005.

Additional Pricing Information
The 2005 laboratory fee schedule includes separately payable fees for certain specimen collection methods (codes 36415, P9612, and P9615). For dates of service January 1, 2005 through December 31, 2005, the personnel payment is $.45 per mile. For dates of service January 1, 2005 through December 31, 2005, the standard mileage rate for transportation costs is $.385. The 2005 payment for code P9603 is $.835 and for code P9604 it is $8.35.

The 2005 laboratory fee schedule also includes codes that have a “QW” modifier to both identify codes and determine payment for tests performed by a laboratory registered with only a certificate of waiver under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).

CPT code 36415 for Collection of venous blood by venipuncture is now payable by Medicare, but code 36416 Collection of capillary blood specimen (e.g., finger, heel, ear stick) remains as not payable by Medicare as a separate service.

Organ or Disease Oriented Panel Codes

Similar to prior years, the 2005 pricing amounts for certain organ or disease panel codes and evocative/suppression test codes were determined by Medicare by summing the lower of the fee schedule amount or the NLA for each individual test code included in the panel code.

Mapping Information for New and Revised Codes

Related Change Request #: 3526 Medlearn Matters Number: MM3526

Laboratory Costs Subject to Reasonable Charge Payment in 2005
For outpatients, the codes in the following tables are paid under a reasonable charge basis. In accordance with §42 CFR 405.502 - 405.508, the reasonable charge may not exceed the lowest of the actual charge or the customary or prevailing charge for the previous 12-month period ending June 30, updated by the inflation-indexed update.

The inflation-indexed update for year 2005 is 3.3 percent.
Manual instructions for determining the reasonable charge payment can be found in the Medicare Claims Processing Manual, Pub. 100-04, chapter 23, §80-80.8. (The Web address for this manual is provided in the “Additional Information” section below.) If there is insufficient charge data for a code, the instructions permit considering charges for other similar services and price lists.

When these services are performed for independent dialysis facility patients, Medicare Claims Processing Manual, Pub. 100-04, chapter 8, §60.3 instructs that the reasonable charge basis applies. However, when these services are performed for hospital based renal dialysis facility patients, payment is made on a reasonable cost basis.

Also, when these services are performed for hospital outpatients, payment is made under the hospital Outpatient Prospective Payment System (OPPS).

Blood Products

Also, the following codes should be applied to the blood deductible as instructed Pub. 100-01, Chapter 3, §20.5-20.54:

Note: Biologic products not paid on a cost or prospective payment basis are paid based on §1842(o) of the Act. The payment limits based on section 1842(o), including the payment limits for codes P9041 P9043 P9045 P9046 P9047 P9048, should be obtained from the Medicare Part B Drug Pricing Files.

Transfusion Medicine

Reproductive Medicine Procedures

Implementation
The changes for 2005 will be implemented on January 3, 2005.

Additional Information
Instructions for calculating reasonable charges are located in the Medicare Claims Processing Manual (Pub. 100-04) chapter 23, sections 80-80.8. at: http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopOfPage

The official instruction issued to your carrier/intermediary regarding this change may be found by going to: http://www.cms.hhs.gov/Transmittals/

From that web page, look for CR3526 in the CR NUM column on the right, and click on the file for the desired CR.

For additional information relating to this issue, please contact your carrier or intermediary on their toll-free phone number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf .

Disclaimer
Medlearn Matters articles are prepared as a service to the public and are not intended to grant rights or impose obligations. Medlearn Matters articles may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents.

Additional Information Provided by Empire Medicare Services
Clinical Laboratory Fees are listed on the 2005 Medicare Fee Schedules page of our Web site.

For more information, visit the Medlearn Matters Web page at: http://www.cms.hhs.gov/MedlearnMattersArticles/

Related Change Request (CR) #: 3526
Medlearn Matters Number: MM3526

Related CR Release Date: November 5, 2004
Related CR Transmittal #: 363

Effective Date: January 1, 2005
Implementation Date: January 3, 2005