By: Liset Sanchez, Client Manager, Lighthouse RCM Solutions

A recent publication from Palmetto GBA highlights the fact that laboratory services are among the top service types found to make the highest number of billing errors. They categorize those billing errors into five areas of concern, with over 80% of them directly related to the clinical decision-making documented in each patient’s medical record as opposed to improper coding.

                                                                 Top Laboratory Billing Errors:

Toxicology labs typically provide services to two main populations:

1. Substance Abuse
2. Pain Management

Strong clinical documentation supporting medical necessity is a critical factor influencing a lab’s profitability and sustainability in both situations. For Pain Management (Chronic Opioid Therapy – COT) patients, an additional component of the clinical documentation includes a Risk Assessment.

Clinical Documentation

Test orders, requisitions, and documentation must have legible signatures supporting the services being requested of the lab. Attestation statements alone are not sufficient evidence of a physician’s intent to order a service.

The service billed on each claim must match the exact service that the physician’s documentation supports. Test orders and requisitions alone are not sufficient evidence of medical necessity when responding to a health plan’s request for medical records or when submitting an appeal for denial or non-payment of services. When health plans request medical records/documentation from a lab, the following items should be included in the lab’s response:

1. Progress/Office Notes
2. Physician Intent to Order
3. Lab Results
4. Signature Log/Attestation (for illegible signatures)

Medical Necessity

It’s also important to keep in mind that an ICD-10 code is also not sufficient evidence in and of itself of medical necessity. There must be evidence of a physician’s intent to order a specific test and/or test methodology and/or specific targets for each and every patient for which the lab bills services. The use of a generic statement such as “It is the physician’s policy to…” does not justify a particular level of testing, the number or specificity of targets selected for testing, or the medical necessity of each individual patient to receive the test. In short, such a statement does not demonstrate an intent to order by the physician

Documentation surrounding Urine Drug Testing (UDT) should be reviewed to confirm it includes the following elements:

• Review: The provider has documented their review of previous results/previous use history and how that information influences the patient’s treatment plan. The number of days a patient has abstained from a drug is additionally required for patients undergoing treatment / testing for substance abuse.
• Rationale: The provider has documented their reason for ordering each specific drug class.
• Risk Assessment: For patients undergoing Chronic Opioid Treatment (COT), the provider has included a Risk Assessment. Tools such as the Opioid Risk Tool, provided by the National Institute on Drug Abuse, are available to help providers fulfill this requirement.

Risk Assessment

COT patients must be medically managed by a prescribing physician who reviews and documents the medical necessity of prescribing, renewing, and adjusting the prescription of a controlled substance for various risk groups which CMS has defined.

Presumptive Testing (80305 – 80307)

Presumptive testing provides rapid results but can sometimes result in false positive or false negative results. Presumptive testing is meant to be used while the patient is in the office/clinic, before being prescribed a controlled substance.

• Expect only one unit of service to be reimbursable per date of service (date of collection, not the date the test was performed), despite the possibility that more than one provider may order the same test on the same date of service. Health plans will process and reimburse based on which provider bills for the service first.
• Definitive testing may be done when a presumptive test is negative for a patient on a prescribed medication.

Definitive Testing (G0408 – G0483, G0659)

Definitive testing provides confirmation of the presumptive test results back to the treating physician.

Limitations to Reimbursement

• Frequency: There are frequency limitations based on risk group, payer policy, and state law.
• Patient Setting: Payers often have different coverage for tests performed on Inpatients compared to outpatients.
• Payer Mix: Each ordering provider’s/client’s payer mix should be carefully evaluated before a lab agrees to provide services to determine if there are written policies that may limit reimbursement or negatively impact profitability. Denial activity must be closely monitored to adapt a lab’s billing policies and/or quickly and accurately respond to any requests for medical records to avoid the potential of additional audits, pre-payment / post-payment reviews, recoupments, or other negative consequences.

If you need assistance navigating these requirements or ensuring your laboratory billing is optimized while remaining compliant, don’t hesitate to reach out to us directly for a complimentary consultation. Our experts are available to provide examples of our recent client successes and provide more insight on how our audit process helps recover lost revenue.

Disclaimer:

The information provided in this Fact Sheet is intended for educational and informational purposes only and should not be construed as specific medical, legal, or financial advice. Our company strives to provide accurate and current information based on professional standards and best practices. We recommend individuals and organizations to use this information as a general guide and consult directly with their healthcare, legal, and/or financial professionals before making any decisions or implementing activities

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