Reminder: For labs and all other Part B providers, there is no grace period to implement active valid CPT codes on the lab fee schedule and active valid ICD-9 diagnosis codes required on claims. As of January 1, 2007, Medicare will recognize only active valid CPT and ICD-9 codes as payable.

	CMS is expanding the number of beneficiaries who qualify for osteoporosis screening due to long-time steroid therapy by reducing the dosage equivalent required for eligibility from an average of 7.5 milligrams per day of prednisone for at least three months to 5.0 mg/day.

Effective January 1

New Test Codes on the Lab Fee Schedule

New & Revised Preventive Services Benefits

• Abdominal Aortic Aneurysm Screening

Medicare will add abdominal aortic aneurysm (AAA) screening to the list of covered Part B preventive services, as required by the Deficit Reduction Act of 2005. Coverage is limited to a one-time only ultrasound screening upon referral from the physician who provided the beneficiary’s initial "Welcome to Medicare" physical exam. The annual Part B deductible is waived.

To bill for AAA screening, use HCPCS code G0389, Ultrasound, B-scan and/or real time with image documentation; for abdominal aortic aneurysm screening. Payment will be made under the Medicare physician fee schedule at the same rate as CPT 76775.

Eligible beneficiaries include those at risk for AAA, including anyone with a family history of AAA; a man aged 65 to 75 who has smoked at least 100 cigarettes in his lifetime; and any other individual who manifests risk factors for which screening is recommended by the U.S. Preventive Services Task Force.

• Fecal Occult Blood Screening

• Colorectal Cancer Screening

• Osteoporosis Screening

Beneficiaries at risk for osteoporosis are eligible for bone mass measurements (BMM) once every two years, though coverage may be more frequent when medically necessary. In the final 2007 physician fee schedule rule, the Centers for Medicare & Medicaid Services announced that it will no longer cover single-photon absorptiometry, saying newer techniques are superior in accuracy and precision, and the agency revised "bone mass measurement" to read: "Is performed with either a bone densitometer (other than a single-photon or dual-photon absorptiometry) or with a bone sonometer system cleared for this use by the FDA" and includes a physician’s interpretation of the results.

For a medically necessary BMM to be covered for an individual being monitored during FDA-approved osteoporosis drug therapy, the monitoring must be performed using a dual energy x-ray absorptiometry system (axial system).

Lab National Coverage Policies

Medicare will cover additional ICD-9 diagnosis codes under its National Coverage Decisions (NCDs) for 23 of the most frequently ordered clinical laboratory tests. The NCDs were developed via a negotiated rulemaking between CMS and lab industry groups. For tests covered under the NCDs to be payable, active valid ICD-9 codes must be used on Part B lab claims to document that the testing is medically necessary.

ICD-9 codes added to the Lab NCDs as of the start of 2007 are:

• Prothrombin Time V58.83 (Encounter for therapeutic drug monitoring)
• Partial Thromboplastin Time V58.83
• Thyroid Testing 783.0 (Anorexia); 793.99 (Other nonspecific abnormal findings on radiological and other exams of body structure)
• Fecal Occult Blood Test 995.20 (Unspecified adverse effect of unspecified drug, medicinal and biological substance)

Blood Glucose Testing In Nursing Homes

Lab Fee Schedule

Reimbursement remains frozen through 2008, in accord with the five-year update freeze mandated in the 2003 Medicare reform law. Fees for 11 new CPT lab codes added to the fee schedule were determined by crosswalking.

Pathology Payment

While spared from the 5% cut scheduled for Medicare physician payments in 2007, pathologists still face a 6% cut as a combined impact of regulatory changes to work and practice expense RVUs (related story, p. 1). Congress also continued the "grandfather" protection for certain pathology TC billings by independent labs.

‘Medically Unlikely’ Edits

CMS is inaugurating a new system of coding edits for Part B claims—called "medically unlikely" edits or MUEs—designed to weed out what the agency calls improper payments. MUEs are limits on the units of service that a healthcare provider can bill a particular CPT/HCPCS code per Medicare beneficiary per day. Claims for services that exceed these limits are automatically rejected.

The initial phase-in of the MUEs will be limited to anatomical edits (e.g., billing for more than one appendectomy per patient). Pathology and clinical lab services are not included, except for five "G" codes for Pap smear screening—G0123, G0124, G0143, G0144, and G0145—whose MUEs are set at one.

The next MUE implementation is set for April 2007 and will concentrate on "typographical edits," CMS has said. CMS has contracted with Correct Coding Solutions, LLC (Carmel, IN), to handle this highly controversial claims processing change.

National Provider Identifier

In order to get reimbursed, clinical laboratories, pathologists, and other healthcare providers must include their National Provider Identifier (NPI) on all Medicare electronic claims sent on and after May 23, 2007 (for small health plans, May 23, 2008). Medicare legacy numbers will no longer be accepted thereafter.

From January 2, 2007 through May 22, Medicare recommends that providers submit both their NPIs and legacy provider numbers. The NPI system has been established in accord with HIPAA (the Health Insurance Portability & Accountability Act). Every healthcare provider must obtain an NPI. The NPI is a 10-digit numeric identifier that does not expire or change. To apply online for an NPI, go to https://NPPES.cms.hhs.gov .

Diagnosis Coding On Claims

New Claims Processing Structure

Medicare is continuing its multi-stage transition to the Medicare Administrative Contractor (MAC) system that will replace the current system of carriers and fiscal intermediaries. CMS will designate 15 MACs nationwide to combine Parts A/B claims processing. The first MAC contract was awarded to Noridian Administrative Services (Fargo, ND) in July 2006, and the contractor is expected to implement consolidated A/B claims processing in March 2007 for Jurisdiction 3, which includes Arizona, Montana, North and South Dakota, Utah, and Wyoming.

CMS also has issued an RFP for bids for more jurisdictions, with contracts scheduled to be awarded in July 2007:

• Jurisdiction 4: Colorado, New Mexico, Oklahoma, and Texas
• Jurisdiction 5: Iowa, Kansas, Missouri, and Nebraska
• Jurisdiction 12: Delaware, the District of Columbia, Maryland, New Jersey, and Pennsylvania

The switch to MACs was mandated by the 2003 Medicare reform law. The statute gave CMS six years (until 2011) to competitively bid and transition all Medicare fee-for-service workloads to MACs. The law also requires that MAC contracts be reopened for competitive bidding every five years.

December 15, 2006 - Table of Contents

NIR December 15, 2006 (full PDF issue)

Pathology Escapes SGR Fee Cut, but Not Other Reductions

CMS Finalizes 2007 Lab Fee Schedule

‘Grandfather’ Protection Extended for Pathology TC Billings

What’s Ahead for Clinical Labs, Pathologists in ’07? A Quick Guide to Key Medicare Policy Changes

New Practice Guideline for HER2 Testing for Breast Cancer

New Waived Tests & Billing Codes

Medicare Recovery Audit Project to Go Nationwide

After Contentious Struggle, FDA Gets Permanent Head