Coding for Laboratory Testing

| April 18, 2012

by Christine Napora, CPC

Ms. Napora is the Owner of Bariatric Billing, Coding and Consulting (BBC) Services in Los Angeles, California. She also resides on the ASMBS insurance committee.

Funding: No funding was provided in the preparation of this manuscript.

Financial disclosures: The author reports no conflicts of interest relevant to the content of this article.

Bariatric Times. 2011;9(4):14

Abstract
Providers must be especially careful to provide correct procedure codes that define precisely what services have been provided and accurate diagnosis codes that link the tests to an appropriate diagnosis. Reimbursement rules for clinical laboratory procedures are explained, including the proper use of diagnosis codes, coverage requirements, including medical necessity, are described, as well as the proper use of advance beneficiary notices.

Introduction
Diagnosis coding for laboratory work can often prove challenging for pre- and postoperative bariatric surgery patients. Questions arise about whether the ICD-9 code should be assigned based on morbid obesity (ICD-9 278.01), the reason for the test, screening, or signs and symptoms.

Because correct diagnosis codes are the key to reimbursement, the treating physician must provide at least a narrative description of the reason for the test, and the ICD-9 code should be assigned to the highest degree of specificity available at the time of billing.

Policy
Just as bariatric surgery coding follows policies, so too does laboratory testing. All claims for laboratory testing according to Medicare and third-party payers must be medically necessary in order for claim reimbursement. Medicare local medical review policy dictates the coverage for clinical laboratory tests in regard to medical necessity issues. The local medical review policy typically includes the following:
•    Indications and limitations of coverage
•    Covered ICD-9 codes
•    Reasons for noncoverage
•    Noncovered ICD-9 codes
•    Documentation requirements.

Example 1. When a patient presents to the physician office for pre-operative history and physical, the physician orders thyroid stimulating hormone (TSH [CPT code 84443]) and a complete blood count (CBC [CPT code 85025]) as part of the pre-operative testing. The lab test is determined to be medically necessary by Medicare only when it is ordered for a patient with one of the conditions listed on the coverage determination policy. Diagnoses listed in Medicare’s policy for TSH include acquired hypothyroidism (244.0–244.9), secondary diabetes mellitus without complications (249.00–249.01), mixed hyperlipidemia (272.2), essential hypertension (401.0–401.9), irregular menstrual cycle (626.4), insomnia, unspecified (780.52), and anxiety states (300.00–300.09). Diagnoses for CBC include joint symptoms (716.XX–718.XX), fatigue (780.79), and hypertension (401.0–401.9). The appropriate ICD-9 diagnoses that would underlie the need for blood counts are far too extensive to be specifically listed so Medicare lists only the ICD-9 codes that are not covered.

Example 2. When a patient schedules the six-month postoperative follow-up visit, he or she is required to have laboratory work completed prior to the appointment. Testing for ferritin (CPT Code 82728) and B12 (CPT Code 82607) is ordered. Covered diagnoses for ferritin include the disorders of iron metabolism (275.9) and iron deficiency anemia secondary to inadequate dietary intake (280.1). B12 covered diagnoses include other protein-calorie malnutrition (263.8–263.9), intestinal bypass or anastomosis status (V45.3), and intestinal malabsorption (579.0–579.9).

The Physician’s Role in Assigning Diagnosis Codes
For the most specific ICD-9 codes to be applied, many physicians can write a phrase indicating the reason for the test and allow the laboratory to apply the ICD-9 codes before the claim is sent to the payer. However, it is important that physicians know the proper way to document the medical necessity of the work they order. The laboratory cannot assign a code if the physician does not supply appropriate documentation in the medical record. For example, a vague sign or symptom is a perfectly acceptable reason for a test. Whether in the physician’s office or the laboratory, all members of the office staff should be familiar with both local and national coverage determination (LCD and NCD) policies for the laboratory studies they order.

For practices with a Medicare population, Medicare’s requirement for substantiating medical necessity, the use of advanced beneficiary notices (ABNs), is crucial to ensure reimbursement for laboratory tests. If neither the signs and symptoms nor the test results demonstrate medical necessity, the laboratory cannot bill the patient for the test unless it has a signed ABN from the patient. Even with a payable diagnosis, the test may exceed the frequency limitations set by Medicare, making an ABN essential to protect the labs reimbursement.

Any claim for clinical diagnostic laboratory service, whether it is coded in the physician’s office or laboratory, must be submitted with an ICD-9-CM diagnosis code. Codes that describe symptoms and signs, as opposed to diagnosis, should be provided for reporting purposes when a diagnosis has not been established by the physician. Diagnoses documented as “probable,” “suspected,” “questionable,” “ruled out,” or “working” should not be coded as though they exist. Rather, the signs, symptoms, or condition(s) should be coded to the highest degree of specificity of certainty for that encounter/visit.

Individual lab tests and their ICD-9-CM codes are included in Medicare’s laboratory table, which can be found at http://www.cms.hhs.gov/coveragegeninfo under Lab NCDs.

In addition, you can ask your local laboratories to provide education and reference material for lab testing using Medicare’s NCD policy.

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