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How to Comply with New Specimen Collection Fee and Travel Allowance Rules

by | Jan 1, 2023

Here are the changes to Medicare specimen collection fee and travel allowances included in the 2023 PFS and what you’ll need to know to comply.

If your lab bills Medicare Part B for specimen collection and travel allowances, be sure your billing staff are aware of the new rules that officially took effect Jan. 1. It’s understandable if you haven’t seen the new requirements, because they’re buried in the 1,297-page final rule implementing the 2023 Medicare Physician Fee Schedule that the Centers for Medicare & Medicaid Services (CMS) published in the Federal Register on Nov. 18.1 Here’s a briefing on the changes and what you’ll have to do to comply with them to ensure proper billing of specimen collection fees and travel allowances.

CMS Specimen Collection Fee Rules

Medicare Part B allows payment for a specimen collection fee and travel allowance, when medically necessary, for a laboratory technician to draw a specimen from either a nursing home patient or homebound patient under Section 1833(h)(3) of the Social Security Act. These payments are covered under the Clinical Laboratory Fee Schedule (CLFS).

Until now, CMS listed its requirements for billing and payment of specimen collection fees and travel allowances in the Medicare Claims Processing Manual (Pub. 100-04, chapter 16 §§ 60.1-.2) rather than in the Medicare regulations. The agency has also issued guidance in the form of Medicare transmittals explaining the rules to providers and Medicare Administrative Contractors (MACs). The problem is that the Manual and guidance aren’t completely consistent with each other. The rules are also confusing and out of touch with actual healthcare practices.

So, CMS has created a new regulation, 42 C.F.R. § 414.523, aka, “Payment for laboratory specimen collection fee and travel allowance.” Contained in the final rule, the new regulation clarifies and tweaks the requirements for Medicare payment of specimen collection fees and travel allowances.

The New Medicare Specimen Collection Fee Rules

One thing that is not changing is the set of eligibility criteria governing whether specimens are billable. As under previous rules, labs may only bill for a specimen that is:

  • Either a blood specimen collected via venipuncture or a urine specimen collected via catheterization
  • Used to perform a lab test that’s covered by Medicare and paid under the CLFS
  • Collected by a trained technician
  • Collected from a Medicare beneficiary that’s either
    • Homebound, or
    • A non-hospital inpatient at a facility where no qualified personnel are available to collect the specimen.

The final rule clarifies what had previously only been implied, namely, that the above circumstances are the only circumstances in which a specimen collection fee is payable under Medicare Part B. The final rule also clears up confusion and inconsistency between Medicare requirements and U.S. Bureau of Labor Statistics definitions, by clarifying that a “trained technician” means “staff providing specimen collection services,” including phlebotomists.1 CMS also says it will stick to its previous policy of paying only one specimen fee per single patient encounter, even if different types or multiple specimens are drawn from the patient.

The biggest changes in the final rule/regulation are the rates. After initially proposing to keep specimen collection fees at the current rates of $3 per patient or $5 per patient in a skilled nursing facility (SNF) or being serviced by a home health agency (HHA), the agency did what the public commentors urged by revising the rates for inflation. As of January 1, 2023, Medicare will pay:

  • $8.57 for all specimens collected in a single qualifying patient encounter; and
  • $10.57 per beneficiary in an SNF or being serviced by an HHA.

It gets better. Starting January 1, 2024, CMS will update the specimen collection fee rate every calendar year by the percent change in the Consumer Price Index for All Urban Consumers (CPI-U) for the 12 months ending June 30 of the preceding year.

The New Medicare Travel Allowance Rules

The specimen eligibility requirements for travel allowances mirror the rules for specimen collection fees. In other words, for the travel allowance to be payable, the specimen collection must:

  • Require a trained technician;
  • Be for a Medicare beneficiary who’s either homebound or an inpatient at a facility other than a hospital; and
  • Be for a lab test that’s covered by Medicare.

As before, labs may not submit a claim for a travel allowance when the technician acts merely as a courier to pick up a specimen that was previously collected. In addition, the allowance applies only to “eligible miles” traveled. To calculate “eligible miles,” you begin at the lab or starting point of the technician’s travel for qualifying specimen collection and end at the lab or ending point of the technician’s travel. You may not count miles traveled for any purposes unrelated to qualifying specimen collection, e.g., personal errands or collections from patients who aren’t Medicare beneficiaries.

The New Travel Allowance Rates

The payable travel allowance rate will vary depending on the distance traveled and numbers of locations visited. There are two possibilities:

1. Flat Rate

Medicare will pay a flat rate travel rate allowance if the trained technician travels 20 eligible miles or less to and from one location to collect specimens from one or more Medicare beneficiaries. The flat rate for 2023 is $10.40 divided by the number of Medicare beneficiaries who received a qualifying specimen collection.

2. Per-Mile Rate

Under the final rule, Medicare will pay a per-mile travel allowance when a trained technician travels either:

  • More than 20 eligible miles to and from one location for specimen collection from one or more Medicare beneficiaries; or
  • To more than one location for specimen collection from more than one Medicare beneficiary.

The 2023 per-mile rate is $1.04 per mile multiplied by eligible miles traveled divided by the number of Medicare beneficiaries from whom the trained technician received a qualifying specimen collection.

How to Calculate the Travel Allowance Under the New Rules

It’s one thing to summarize the rules and another to apply them. While the specimen collection requirements are fairly straightforward, the travel allowance rules are a bit tricky. To help you apply them, here’s a set of scenarios based on actual examples that CMS includes in the final rule to explain when to use and how to calculate the flat-rate and per-mile travel allowance requirements.1

Example 1

Scenario: A trained technician travels seven miles from the lab to a nursing home. During the stop, the technician:

  • Collects blood specimens via venipuncture from 3 Medicare beneficiaries;
  • Collects a blood specimen via venipuncture from one patient who’s not a Medicare beneficiary; and
  • Simply picks up a blood specimen that was collected via venipuncture from a Medicare beneficiary the previous day.

The trained technician then drives seven miles back to the lab without making any other stops.

Which Rate Should the Lab Use: The flat rate, since the miles traveled is below the 20-mile threshold.

How Much Can the Lab Bill: $3.47 for three beneficiaries. Explanation: The lab can’t bill Medicare for the non-Medicare beneficiary or the patient whose blood was collected previously since the latter, while a Medicare beneficiary, didn’t require specimen collection services. That leaves three Medicare beneficiaries on whom a specimen collection fee is payable. To calculate the payment amount, the lab would divide the flat-rate travel allowance amount of $10.40 by three, i.e., the number of beneficiaries, which equals $3.47. To bill for the travel allowance, the lab would submit one claim for each of the three beneficiaries using HCPCS code P9604.

Example 2

Scenario: A trained technician travels 45 miles from a lab in a city to a rural SNF, collecting blood specimens via venipuncture from six Medicare beneficiaries, and then drives 45 miles back to the lab.

Which Rate Should the Lab Use: Since total eligible miles traveled to the location for specimen collection are above 20, the lab would use the per-mile travel allowance.

How Much Can the Lab Bill: $15.60 per beneficiary. Explanation: To calculate the travel allowance rate, the lab must total the eligible miles traveled back and forth (45 + 45 = 90) and multiply the sum by $1.04. That would yield a total of $93.60. The lab would then prorate that amount by dividing by the number of Medicare beneficiaries for whom a specimen collection fee is paid. Result: $93.60/6 = $15.60. To bill for the travel allowance, the lab would submit one claim for each beneficiary in the amount of $15.60 using HCPCS code P9603.

Example 3

Scenario: A trained technician travels:

  • 40 miles from a lab to the location of a Medicare beneficiary to collect a blood specimen via venipuncture
  • 10 miles to the location of a non-Medicare patient to collect a blood specimen via venipuncture
  • 20 miles to the location of 2 Medicare beneficiaries to collect urine specimens by catheterization
  • 20 miles to return to the laboratory.

Which Rate Should the Lab Use: Since the trained technician traveled to more than one location for specimen collection, the lab would use the per-mile travel allowance,

How Much Can the Lab Bill: $27.73 per beneficiary. Explanation: To calculate the per-mile rate, the lab must first determine the total eligible miles. In this case, all the miles the technician traveled are eligible except for the 10 miles traveled to collect a specimen from the non-Medicare patient. So, total eligible miles are 40 + 20 + 20 = 80. The lab would then multiply the number of eligible miles by the travel allowance mileage rate of $1.04. Result: 80 x $1.04 = $83.20. It would then prorate $83.20 by dividing it by the number of Medicare beneficiaries for whom a specimen collection fee is paid (3), yielding an amount of $27.73. When it’s all said and done, the lab would submit a claim using HCPCS code P9603 for travel allowance of $27.73 for each of the Medicare beneficiaries.

References:

  1. https://www.federalregister.gov/documents/2022/11/18/2022-23873/medicare-and-medicaid-programs-cy-2023-payment-policies-under-the-physician-fee-schedule-and-other

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