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ADDRESS
Sanford Laboratories
PO Box 5056
Sioux Falls, SD 57117-5056
PHONE
605-328-5464
800-522-2561
FAX
605-328-5434
E-MAIL
E-mail Sanford Laboratories
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| Medical Necessity |
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BACKGROUND
The Social Security Act [under Section 1862 (a) (1) (A)] passed in 1965 indicates Medicare will cover only those services that are medically necessary. The Medicare program does not cover items and services that are not reasonable and necessary for the diagnosis or treatment of an illness, injury, or to improve the functioning of a malformed body member.
For an item or service to be considered medically necessary, it must be: - Consistent with the symptoms or diagnosis of the illness or injury under treatment; and
- Necessary and consistent with generally accepted professional medical standards (i.e., not experimental); and
- Not furnished primarily for the convenience of the patient or the physician; and
- Furnished at the most appropriate level that can be provided safely and effectively to the patient.
Therefore, Medicare may deny payment for a test that the physician believes is appropriate, but which does not meet the Medicare coverage criteria (e.g., done for screening purposes) or where documentation in the entire patient record, including that maintained in the physician's records, does not support that the tests were reasonable and necessary for a given patient. Tests submitted for Medicare reimbursement must meet program requirements or the claim may be denied.
The ordering physician should retain in the patient's medical record the history and physical examination notes documenting evaluation and management of one of the Medicare covered conditions/diagnoses, with relevant clinical signs/symptoms or abnormal laboratory test results, appropriate to one of the covered indications. The patient's clinical record should further indicate changes/alterations in medications prescribed for the treatment of the patient's condition. There must be an attending/treating physician's order for each test documented in the patient's medical/ clinical record. Documentation must be submitted to Medicare upon request. The patient's medical record/ chart must include documentation to support medical necessity.
MEDICAL RECORD DOCUMENTATION
- Title XVIII of the Social Security Act, section 1833 (e). This section prohibits Medicare payment for any claim which lacks the necessary information to process the claim.
- 42CFR410.32. Diagnostic tests may only be ordered by a treating physician (or other treating practitioner acting within the scope of their license and Medicare requirements).
Diagnosis codes and/or signs and symptoms must be supported by the patient's medical record: - For every CPT code billed, there should be documentation that substantiates that the service was performed
- Documentation must also substantiate the level of service billed
- Documentation should be written on a timely basis
- The medical records should be annotated by the practitioner who performed the service
ORGAN AND DISEASE ORIENTED PANELS
Effective January 1, 1997
In an effort to assist physicians with ordering, the Centers for Medicare and Medicaid (CMS) and American Medical Association (AMA) worked together to develop the "Organ and Disease Oriented Panels." The premise behind the development of these panels was to allow the physician to order tests that are medically necessary for a certain condition by ordering the appropriate panel rather than the individual tests. The strategy was to eliminate the old automated multi-channel panels and replace them with more clinically grounded groupings of tests. To use the organ or disease oriented code, the laboratory must perform each test listed under the panel. The laboratory is not allowed to make changes or substitutions in the test composition of the panels.
It is important to remember that even though CMS views the ordering of an Organ or Disease Oriented Panel as ordering an individual test, there must be documentation in the patient medical record to support the medical necessity for each test within the panel.
Currently, Sanford Laboratories' Medicare carrier has implemented limited coverage policies for three of the Organ and Disease Oriented Panels: the "Hepatic Function Panel," the "Acute Hepatitis Panel," and the "Lipid Panel." Refer to Sanford Laboratories' "GUIDEBOOK of Covered Signs, Symptoms, Diagnoses, & ICD-9-CM Codes" for specific information. Sanford Laboratories provides updated and new limited coverage information to clients as it becomes available.
All claims are subject to post-payment review. If this occurs, our carrier may require the laboratory to produce documentation from the medical record that would support medical necessity for each test billed to Medicare.
The current list of "Organ and Disease Oriented Panels" as of January 1, 2008, is provided below.
ORGAN AND DISEASE ORIENTED PANELS - as of January 1, 2008 |
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| Panel Name & Code |
List of Tests |
Acute Hepatitis Panel
CPT 80074
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*Hepatitis A antibody (HAAb), IgM antibody (86709)
*Hepatitis B core antibody (HBcAb), IgM antibody (86705)
*Hepatitis B surface antigen (HBsAg) (87340)
*Hepatitis C antibody (86803)
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Basic Metabolic Panel
CPT 80048 |
*Calcium (82310)
*Carbon dioxide (82374)
*Chloride (82435)
*Creatinine (82565)
*Glucose (82947)
*Potassium (84132)
*Sodium (84295)
*Urea Nitrogen (BUN) (84520)
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Comprehensive Metabolic Panel
CPT 80053 |
*Albumin (82040)
*Bilirubin, total (82247)
*Calcium (82310)
*Carbon dioxide (82374)
*Chloride (82435)
*Creatinine (82565)
*Glucose (82947)
*Phosphatase, alkaline (84075)
*Potassium (84132)
*Protein, total (84155)
*Sodium (84295)
*Transferase, alanine amino (ALT) (SGPT) (84460)
*Transferase, aspartate amino (AST) (SGOT) (84450)
*Urea Nitrogen (BUN) (84520)
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Electrolyte Panel
CPT 80051 |
*Carbon dioxide (82374)
*Chloride (82435)
*Potassium (84132)
*Sodium (84295) |
Hepatic Function Panel
CPT 80076 |
*Albumin (82040)
*Bilirubin, total (82247)
*Bilirubin, direct (82248)
*Phosphatase, alkaline (84075)
*Protein, total (84155)
*Transferase, alanine amino (ALT) (SGPT) (84460)
*Transferase, aspartate amino (AST) (SGOT) (84450)
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Lipid Panel
CPT 80061 |
*Cholesterol, serum, total (82465)
*Triglycerides (84478)
*Lipoprotein, direct measurement; high density cholesterol
(HDL cholesterol) (83718)
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Obstetric Panel
CPT 80055 |
*ABO, blood typing (86900)
*Rh, blood typing (86901)
*Antibody screen, RBC (86850)
*Hemogram and platelet count, automated, and automated complete differential WBC count (CBC) 85025)
*Rubella antibody (86762)
*Syphilis test, qualitative (86592)
*Hepatitis B surface antigen (HBsAg) (87340)
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Renal Function Panel
CPT 80069 |
*Albumin (82040)
*Calcium (82310)
*Carbon dioxide (82374)
*Chloride (82435)
*Creatinine (82565)
*Glucose (82947)
*Phosphorus, inorganic (phosphate) (84100)
*Potassium (84132)
*Sodium (84295)
*Urea Nitrogen (BUN) (84520)
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Reference: American Medical Association, Current Procedural Terminology CPT 2008
ROUTINE SCREENING
Based on the requirements for medical necessity, Medicare coverage does not usually include routine/screening, or experimental diagnostic testing. Screening is defined as examinations and/or diagnostic procedures performed in the absence of signs or symptoms. According to Medicare, screening excludes routine physical checkups (including tests that are performed in the absence of signs or symptoms) from the Medicare program. Screening is often performed based on patient age, and/or family history. ** While election to perform such examinations and tests may be considered good medical practice, they are not covered services under the Medicare program. ** In certain situations, Medicare may--through the legislative process--define tests that will be covered when performed as screening procedures.
** Laboratory screening services which Medicare covers under defined conditions:Colorectal Screening - Fecal occult blood testing (FOBT)
Prostate Cancer Screening - Prostate Specific Antigen (PSA)
Diabetes Screening - Fasting blood glucose or post-glucose challenge
Cardiovascular Screening - Lipid panel, total cholesterol, high density lipoprotein, triglycerides
See the appropriate sections of Sanford Laboratories' "Guidebook of Covered Signs, Symptoms, Diagnoses, & ICD-9-CM Codes" for more information.
In the absence of symptoms, physician findings, or other evidence of disease or injury, tests are considered screening tests and are therefore non-covered services under Medicare. In such cases, the provider providing the non-covered service can bill the beneficiary without submitting a claim to Medicare. Submitting claims to Medicare for services that the provider knows are not covered by Medicare is considered fraudulent act. The provider may submit charges to Medicare in situations where the beneficiary wishes to have them submitted in order to obtain a Medicare denial so that the services may be submitted to a supplemental insurance company. This should be noted on the Medicare submission claim.
LIMITED COVERAGE
Based on review of test utilization, each Carrier (Part B coverage for physician office or independent laboratory) and fiscal Intermediary (Part A coverage for hospital and skilled nursing home) develops policies to define under which signs, symptoms, or diagnoses the services will be covered. These policies are called Local Coverage Decisions (LCDs). Because test utilization patterns are different for various regions of the country and different states, LCDs differ from the carrier in one state to the carrier in the next state. Since utilization in hospitals and nursing homes is different from those in the physician office and independent laboratory, there may be different LCDs in the same state for the carrier and intermediary. The Medicare contractor to which the laboratory billing the test service determines which LCDs apply to any given patient, regardless of the address of the patient and/or ordering physician.
National Coverage Decisions (NCDs) are policies developed by CMS at the national level. They are binding on all Medicare contractors and cannot be revised by local contractors. Local contractors can add frequency limits and may supplement an NCD where the NCD is silent on an issue. National Coverage Decisions apply to all clinical laboratories throughout the United States.
LCDs and NCDs are found in Sanford Laboratories' "GUIDEBOOK of Covered Signs, Symptoms, Diagnoses, & ICD-9-CM Codes" provided by Sanford Laboratories. As Sanford Laboratories' carrier or CMS updates or adds LCDS or NCDs, Sanford Laboratories will provide this information as it becomes available.
Please be aware it is not enough to link the procedure code to a correct payable ICD9-CM diagnosis code. The diagnosis must be present for the procedure(s) to be paid, but in addition, the procedure(s) must be reasonable and necessary for that diagnosis. Documentation within the beneficiary's medical record must support the necessity for the test(s) provided.
ADVANCED BENEFICIARY NOTICE (ABN)
Whenever a test with limited coverage (LCD or NCD) is ordered, the laboratory is allowed to submit the test to Medicare for payment. If the payment is denied, the laboratory will be able to bill the beneficiary if an Advance Beneficiary Notice (ABN) was completed. The ABN regulations apply to participating and nonparticipating provider services that may be determined as not medically necessary. Under federal law, providers must inform beneficiaries in writing before providing a service which Medicare may consider not medically necessary. ABNs also protect the provider's right to collect payment from the beneficiary when claims are denied by Medicare as "not reasonable and necessary."
OMB Approved Advanced Beneficiary Notice (ABN)
The new OMB-approved ABN that is acceptable for use is the Form CMS 131 OMB 0938-0566 (effective 3-3-2008).
THE ABN MUST:
Be obtained PRIOR to the beneficiary receiving the service (performing the procedure/test)
Be verbally reviewed with the beneficiary or his/her representative, and any questions raised during the review must be answered prior to signing the ABN
If the patient demands the service and refuses to sign the ABN, have a second employee in your lab or office witness the attempted administration of the ABN and the beneficiary's refusal to sign. Both employees should sign an annotation on the ABN attesting to having witnessed the attempted administration and the refusal to sign. If there is only one person at the draw station, the second witness may be contacted by telephone to witness the beneficiary's refusal to sign the ABN by telephone and may sign the ABN annotation at a later time.
The unused patient signature line on the ABN form may be used for the annotation and signatures. Writing in the margins of the form is also permissible. In this case, the patient may be billed for the services if Medicare denies the claim.
INSTRUCTIONS TO COMPLETE THE ADVANCED BENEFICIARY NOTICE:
ABN CMS-R-131 OMB 0938-0566
(Effective 3-3-2008)
- Always use black or blue ink and make sure each copy is legible and readable.
- Determine if the test(s) ordered have a LCD or NCD. This information can be found in the "GUIDEBOOK of Covered Signs, Symptoms, Diagnoses, & ICD-9-CM Codes" provided by Sanford Laboratories. These can also be found on this Web site by choosing "GUIDEBOOK of LCD & NCDs" on the left sidebar.
- "Patient Name" - REQUIRED - Clearly print the name of the beneficiary (patient) as it appears on their Medicare card.
- "Identification Number" - clearly indicate the Medicare identification number (found on the beneficiary's Medicare card) - this field is optional.
- "Lab Tests(s):" Box - REQUIRED - Clearly indicate the test ordered (in line item fashion) that may not be covered by Medicare. A list of the medically reviewed LCD and NCD tests are available in Sanford Laboratories' "GUIDEBOOK of Covered Signs, Symptoms, Diagnoses, & ICD-9-CM Codes." "GUIDEBOOKS" can be ordered from our Supplies Deparment.
- "Reason Medicare May Not Pay:" Box - REQUIRED - "X" the box with the appropriate reason you believe Medicare may not pay for the "Lab Test(s)" ordered. The reasons are listed below:
- Medicare does not pay for these tests for your condition;
- Example is a diagnosis is given, but does not meet medical necessity for the test ordered.
- Medicare does not pay for these tests as often as this (denied as too frequent);
- Example is a PSA screen ordered more frequently than once per year
- Medicare does not pay for experimental research tests;
- Exactly as specified above - ordered for research or experimental reasons.
- "Estimated Cost" Box - REQUIRED - clearly indicate a good faith estimate of the cost of each test that may not be covered, or a total estimate of all tests that may not be covered.
- "Options:" Box - REQUIRED - Have the beneficiary or the beneficiary's representative complete this portion by placing an "X" in front of the appropriate option. THE BENEFICIARY OR REPRESENTATIVE MUST CHOOSE ONE OPTION--AND ONLY ONE. YOU CANNOT CHOOSE AN OPTION FOR THEM.
- If the beneficiary or his/her representative wishes to receive some, but not all of the services of the ABN, a new ABN should be filled out and reflectly accordingly.
- "Additional Information:" - you can enter any additional insurance information or any information for additional clarification for the beneficiary - this field is optional
- "Signature:" - REQUIRED - The beneficiary or the beneficiary's representative must sign the ABN.
- "Date:" Box - REQUIRED - The beneficiary or the beneficiary's representative must date the ABN.
FINALIZATION OF ADMINISTRATION OF THE ABN PROCESS
Always give a copy of the completed ABN (yellow copy) to the patient. Attach the original copy (white copy) to the Sanford Laboratories requsition.
Beneficiaries are aware that they are responsible for payment of routine or screening tests. ABNs are not required for "routine or screening tests" as they are not covered services under Medicare; however, Medicare does cover a selection of screening tests as long as they are ordered under specific frequency criteria, such as PSA and fecal occult blood. If these screening tests are ordered at a frequency greater than allowed by Medicare, an ABN should be administered.
When requesting Sanford Laboratories to bill Medicare, the ABN must accompany the sample and request. The laboratory submitting the claim to Medicare must have the ABN on file.
EXAMPLES OF UNACCEPTABLE ABN PRACTICES ARE:
- Giving notices (ABNs) for all claims and services (blanket ABNs)
- Failing to state on the ABN the particular services which Medicare will likely deny
- Failing to complete the ABN prior to providing a service (performing the test)
- Administering an ABN to a patient in a medical emergency or to a patient who is under great duress
Practitioners ordering tests that may not be covered by Medicare may be held responsible for the bill.
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