BILLING & CODING

Medicare Reimbursement: CMS Begins Implementing New HOPPS Date of Service Rules for ADLTs & Molecular Pathology Tests

CMS has begun implementing the new rules that exempt advanced diagnostic laboratory tests (ADLTs) and molecular pathology tests from Medicare Hospital Outpatient Prospective Payment System (HOPPS) laboratory 14-day date of service rules. Here’s what labs that bill Medicare for outpatient lab tests need to know.

General Rules
The date of service (DOS) for outpatient lab services is normally the date the specimen is collected. Exception: The DOS is the date the test is performed if:

  • The doctor orders the test at least 14 days after a patient is discharged from the hospital;
  • The specimen is collected during a hospital surgical procedure;
  • Collecting the sample at another time would be medically inappropriate;
  • Test results don’t guide treatment provided during the hospital stay; and
  • The test is reasonable and necessary for treating an illness.

When the so called “14-day rule” applies, the test is paid separately under Part B; in all other cases, it’s bundled into the payment for the hospital stay.

The ADLT & Molecular Pathology Test Exception
Under the new rules, the DOS for roughly 300 molecular pathology tests and ADLTs is the date of testing rather than specimen collection provided that the tests are both:

  • Excluded from OPPS packaging rules; and
  • Ordered less than 14 days after a patient’s hospital discharge.

Impact
By removing ADLTs and molecular pathology tests from the 14-day rule, the new CMS rule enables labs to bill Medicare for those tests directly under the Clinical Laboratory Fee Schedule (CLFS).

Implementation
Although the new rules officially took effect on Jan. 1, 2018, CMS did not begin implementing them until July 2. To give labs a little leeway to get used to the rules, the agency will exercise enforcement discretion until Jan. 2, 2019.

CRITERIA FOR DIRECT BILLING OF OUTPATIENT ADLTs

Under new HOPPS rules, labs can directly bill Medicare under the CLFS for ADLTs delivered to outpatients less than 14 days after hospital discharge if either of the following criteria applies:

Criterion 1: The test:

  • Analyzes multiple biomarkers of DNA, RNA or proteins;
  • When combined with an empirically derived algorithm, yields a result predicting the probability of an individual patient’s development of a certain condition(s) or response to a particular therapy(ies);
  • Provides new clinical diagnostic information that can’t be obtained from any other test or combination of tests; and
  • May include other assays

Criterion 2: The test is cleared or approved by the FDA.

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