Provider Notice of Laboratory Compliance
American Research Labs (ARL) has an active compliance program that reflects our commitment to conduct business in compliance with all federal, state and local laws, and to adhere to all program requirements for federal, state and private health plans. As a participant in federally- funded healthcare programs, ARL follows the guidelines of the Department of Health and Human Services Office of Inspector General (OIG) and the US Department of Justice. One such OIG guideline is for laboratories to educate their physician clients regarding laboratory compliance, billing and coding guidelines through dissemination of an annual written notice which outlines the principal responsibilities we share. ARL is a CLIA-COLA accredited high-complexity clinical diagnostic facility.
Diagnosis Coding
Per the Balanced Budget Act of 1997, all ordering providers, including physicians, physician assistants, nurse practitioners and other laboratories, are required to submit diagnostic information to the laboratory when ordering. The information submitted on each lab order, either ICD-10 code(s)* or narrative description of diagnosis, signs/symptoms, indication, etc., should best describe the primary reason for ordering each lab test(s) and must be legibly documented (by test) in the patient’s medical record/chart.
Coding cannot be assigned based on a “rule-out” (r/o) narrative description.
All ICD-10 codes submitted must reflect the highest specificity possible.
Coding should NOT be assigned for reimbursement purposes only and should NOT reflect information available only after the lab testing is completed.
Medical Necessity
As a health care provider you may order any test(s), including screening tests, which you believe are appropriate for the treatment of your patient. However, claims submitted for laboratory services will only be paid by Medicare or other insurance payors if the service meets the Medicare coverage criteria or insurance payor’s coverage criteria and is reasonable and necessary to treat or diagnose and individual patient. The medical necessity of each test ordered must be documented in the patient’s chart/medical record and reflect any/all coding submitted with the lab requisition.
If a ‘non-covered’ diagnosis is used the patient must be notified in advance and given the opportunity to sign the Advance Beneficiary Notice (ABN) prior to specimen collection. The ABN must be completed for any Medicare patient where claim denial is suspected based on medical necessity or frequency determinations. The signed, original ABN must be attached to the original lab order prior to submission. If an ABN is not included with such a request, the ARL client will be billed as delineated in the Client’s signed Laboratory Services Agreement (LSA).
Requesting an ABN on all Medicare beneficiaries is considered by Medicare to be an unacceptable practice.
Valid Laboratory Orders/Requisitions:
Thoroughly completing your manual request(s) for lab tests or your electronic requests in our laboratory ordering and reporting system, ensures accurate processing and testing, efficient patient identification and registration, and timely reporting of lab results. Due to the increasing complexity of insurance billing, please attach a front/back copy of the patient’s insurance card(s) to ensure proper billing. If incomplete insurance information is submitted the patient may receive the itemized statement and may be responsible for the bill for their lab services in its entirety.
Recurring orders for an individual patient are only acceptable by Medicare in connection with extended treatment by the same ordering physician, and with the same diagnosis code(s). Recurring orders are valid for a maximum of 365 days from original order date and must be renewed annually. One-time orders are valid for a maximum of 90 days from the original order date.
Signature stamps are NOT acceptable. Orders must include legibly-written or electronic signatures.
Screening/Preventive/Routine Lab Orders
Statutorily, Medicare does NOT cover any lab testing for routine and/or screening purposes. However, Medicare does cover some Preventive lab tests (PSA, Glucose, Lipids, etc.) if ordered as required by Medicare.
For Preventive benefit information including test names, CPT codes, required ICD-10 codes and frequency limitations please click the following link: Medicare MPS Quick Reference
When laboratory testing is ordered for screening purposes (asymptomatic) the patient should be advised that payment may be denied by Medicare or other insurance plans. Each lab test ordered for screening purposes must have the appropriate code.
Per the Affordable Care Act, many but not all preventive lab services are available for payment if ordered as required by the patient’s insurance plan. Those tests available for coverage must be specifically ordered and coded with the appropriate code(s) as defined by the payor. Any test coded as ‘diagnostic’ rather than ‘screening’ based on the ICD-10 code submitted is not payable as a Preventive benefit.
Organ/Disease Panels/Lab-Customized Panels
Any laboratory test panel, whether AMA, Laboratory or Client-developed, must only be ordered, charged and reimbursed when ALL individual components of the panel are medically necessary as determined by specific ICD10 code(s) and documented in the patient’s medical record/chart.
Reflex Testing
Reflex Testing is additional testing (with additional cost) that is automatically performed on the basis of the initial results. All procedures that contain a reflexive pathway are identified in our test directory. Many include ‘w/reflex’ as part of the test name.
Toxicology Testing
AMA and CMS have changed the description for the two major categories for drug testing.
Screens were changed to Presumptive testing and Confirmations were changed to Definitive testing. These names will be used moving forward by most payors and laboratories.
Screen = Presumptive Testing (automated Enzyme Immunoassay analyzer method)
Confirmation = Definitive Testing (Liquid Chromatography tandem Mass Spectrometry method)
Pre-Authorization of Lab Order
Pre-authorization of certain lab testing (i.e.: Genetics, Cytogenetics, Allergy testing, Celiac testing, etc.) may be required, as defined by the patient’s insurance provider. Any pre-authorization paperwork must be completed by the ordering provider and submitted for approval prior to submission of any lab orders. Please include the pre-authorization number on the lab order along with any related documentation. If appropriate pre-authorization is not sought, the client or patient may be responsible for payment as per the signed SLA and/or the Patient Consent/Financial Responsibility Form.
Other important information about the ARL Laboratory Compliance Program includes;
Because we are a CMS provider we are prohibited from billing any federal program for testing requested by any provider excluded from participation. Lab testing ordered by any sanctioned provider should not be submitted to an ARL laboratory, and will not be accepted.
The OIG/Department of Justice takes the position that an individual who knowingly causes a false claim to be submitted may be subject to sanctions or remedies available under civil, criminal and administrative law. The laboratory will not knowingly bill Medicare for lab testing that is non-covered, unreasonable and/or unnecessary.
If the laboratory receives an order without any diagnosis information, or is unable to bill for testing because the coding supplied doesn’t meet medical necessity requirements, we will attempt to contact the ordering provider to gather additional coding information that may have been documented in the patient’s chart but wasn’t noted on the original lab requisition. The laboratory may not assign diagnosis information on its own.
Supplies required for the collection of specimens sent to our laboratory will be provided pursuant to ARL Labs policy, which takes the average number of tests ordered by the client and provides a 5% overage to allow for damaged supplies or an increase in tests. Due to Stark II/Anti-Kickback statutes, supply volumes must reasonably match volumes of testing received.
If you have any questions about this annual notice, laboratory financial compliance, or lab coding please contact:
American Research Labs
Compliance Department