Knowledge Base Article

One of the most significant changes to the Hospital Outpatient Prospective Payment System (OPPS) for 2014 was the packaging of clinical laboratory services. Prior to this year, clinical diagnostic laboratory tests were separately paid under OPPS at the Clinical Laboratory Fee Schedule (CLFS) payment rates. In 2014, most laboratory tests will be packaged under OPPS.

There are some limited exceptions where hospitals may receive separate payment for otherwise packaged lab services. Does your hospital understand these exceptions and do you know how to bill to receive payment in these circumstances?

The January OPPS Update MLN Matters Article and associated transmittal explain the details of when and how to appropriately receive separate payment for packaged laboratory services.

Packaged laboratory services are separately payable in three situations:

• When a specimen is submitted for analysis to a hospital and the patient is not physically present at the hospital. These are commonly referred to as non-patient services, outreach lab services or reference lab tests.
• When laboratory tests are the hospital outpatient services that a patient receives during an outpatient encounter. For example, patients that are referred from a physician’s office or clinic to a hospital outpatient laboratory for laboratory testing only and no other outpatient services.
• When laboratory tests are clinically unrelated to other outpatient services the patient receives during an outpatient encounter and the lab tests are ordered by a different practitioner than the one who ordered the other (non-lab) outpatient services.

For 2014, the packaged laboratory tests have a status indicator (SI) of “N” (packaged) – so how are hospitals to receive separate payment?

CMS is allowing hospitals to bill laboratory tests provided in any of the above listed exceptions on a 14X type of bill (TOB). Prior to this year, only non-patient services were required to be billed on a 14x TOB. Most outpatient laboratory services were generally billed on a 13x TOB. For 2014, in order to receive separate reimbursement for packaged laboratory services a hospital must submit the lab charges on a 14x claim. It is the hospital’s responsibility to determine which lab services meet the criteria for separate payment and therefore are appropriate for a 14x claim.

There are some exceptions to packaging of laboratory services:

• CMS did not package molecular pathology test codes since they are recently added laboratory codes. Since molecular pathology laboratory tests are not packaged under OPPS they should be billed on a 13x claim.
• Pathology, cytology and blood bank services are not packaged because they have a SI of “X” and are paid under OPPS, not under the CLFS.
• The status indicator for some other clinical lab tests remained “A” instead of being changed to the packaged status indicator “N” (for example new codes, screening services, and drug screening codes) so these will also still be separately paid under OPPS.

Hospitals should develop processes to ensure that lab tests that meet the criteria are submitted on a 14x claim while lab services that do not meet the criteria continue to be billed on a 13x TOB. These process changes may affect your outpatient laboratory, registration, and billing departments.