Regarding: Laboratory Compliance and Annual Physician Notice: May 2015
Dear Valued Health Care Provider:
This is your annual notification of our Laboratory Compliance policies as required by the Office of
the Inspector General (OIG). The Clinical Laboratory Compliance Program helps to ensure that
current federal regulatory policies are appropriately implemented and enforced. This program also
supports the fundamental mission of MetroWest Medical Center, which is to provide the highest level
of patient care. As part of the Clinical Lab’s commitment to compliance, we are sending you this
annual letter which highlights those topics pertinent to the process of ordering laboratory tests used to
diagnose and treat your patients.
1. Medical Necessity
The model compliance plan drafted in 1997 by the OIG advises that clinical laboratories must
obtain documentation through laboratory requisitions confirming the medical necessity of tests
performed as requested by the physician since laboratories can neither treat nor determine
medical necessity. Thus, physicians must establish the necessity of tests by providing diagnostic
information to the laboratory by including the ICD code(s) or a narrative reason/purpose for the
order(s). Medicare will only pay for tests that they deem are reasonable and necessary for patient
care. Medicare does not routinely pay for tests ordered for screening with just a few exceptions
(annual PSA, Pap smears), and recommended testing for new Medicare patients (lipid screen and
diabetes screen).
Medical necessity rules (diagnostic guidelines) and/or frequency limitations are established by
Medicare policies or local medical review policies established by the hospital’s fiscal
intermediary. The Local Coverage Determinations (LCD’s) as well as the current 2015 lab
Medicare fee schedule can be found by logging onto: http://cms.hhs.gov The OIG requires that
we advise you that the Medicaid may reimburse at rates less than or equal to Medicare
reimbursement.
2. Compliance Checker and ABN’s
Laboratories may not bill the beneficiary for a non-covered service unless the patient is informed
in writing ahead of time that the test ordered may be denied by Medicare if the diagnosis
provided does not meet the medical necessity guidelines. The patient must also sign an Advanced
Beneficiary Notice (ABN) which acknowledges that the patient has been informed in writing of
his/her potential financial obligation.
MetroWest Medical Center utilizes a software package called Compliance Checker to screen
services before they are provided. The laboratory can screen the test ordered and the diagnosis
provided against Medicare or local policies for the test. If the test fails medical necessity, the
patient will be informed and the patient can then make an informed decision regarding their
financial responsibility for the test. ABNs are used to advise Medicare beneficiaries (only), prior
to items or services being rendered, when there is a likelihood that an ordered service may not be
paid. It may require the beneficiary to pay for services as an out-of-pocket expense. Each ABN
must be specific to each laboratory test ordered. The provider will be notified if a test ordered
fails medical necessity. ABNs serve an important fraud and abuse compliance function that is the
responsibility of the healthcare provider involved in ordering a test, procedure or item on behalf
of a Medicare beneficiary. Blanket waivers for all tests ordered on a Medicare beneficiary are not
allowed by Medicare and will not be accepted by the laboratory. Laboratory test requisitions are
designed in support of these regulations and to emphasize physician choice.
3. Standard Requisitions and Required Information
Recent revisions to the Health Insurance Portability & Accountability Act (HIPAA) mandate that
labs receive specific information in order to submit claims. To properly process specimens
received from your office, we need the following information completed on the requisition:
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Name of physician or qualified healthcare professional ordering the test
Address of physician or qualified healthcare professional
Phone number of physician or qualified healthcare professional
Patient’s name
Patient’s address
Patient’s date of birth, social security number, and patient’s sex
Patient’s billing information (copy of both sides of patient’s insurance card)
Name of subscriber (if patient is not the subscriber)
Subscriber information (date of birth, social security number, address)
Tests ordered
Diagnosis, sign, or symptom
Physician signature with Date of the Order
Standard requisition forms should be used when ordering lab tests. The requisition lists current
tests and can be preprinted with the provider’s office information. Please note that specimens
collected in the office should contain two pieces of identification: the patient’s full name and the
patient’s date of birth. Various accrediting agencies strongly recommend this process and this is
our standard practice within the MetroWest Medical Center.
4. Ordering and Reporting Guidelines
A. Standing Orders
Standing orders direct the laboratory to perform a particular test(s) at specified intervals for a
defined time period without having to submit a new requisition form each time. Standing
orders must be renewed in writing every twelve months, must state a start and stop date as
well as the frequency of the order, and must have a diagnosis stated for each standing order
test.
B. Reflex Test Policy and Customized Profiles
This is reviewed annually and presented to the Medical Executive Committee for approval.
Reflex testing may be performed in the absence of a specific written order when results of an
initial test indicate that a second, related test is medically appropriate. A list of the approved
tests is posted on the MetroWest website under provider resources.
The laboratory does not encourage customized profiles, in support of CMS’s belief that a
profile usage may result in the ordering of tests which are not covered and/or reasonably
necessary. If a physician requests a customized test order profile, a signed physician
acknowledgement is required from each physician who will be ordering the custom profile.
Federal regulations require that acknowledgement forms be signed annually and returned to
the laboratory. Custom profiles for use in the Hospital require approval by the Medical Staff.
C. Critical Values and Call Back/Read Back Policies
The Laboratory staff will call urgent and critical laboratory values to the physician’s office or
directly to the physician and will have the patient’s name and lab value read back to verify
the accuracy of the information.
D. Panel Testing and Pricing
All routine chemistry tests should be ordered separately except for those contained in
federally defined laboratory panels. Test panel pricing is based on the cost of each
component included in a test panel. In no case are individual tests or profiles priced below
cost. Use of panels and profiles can lead to ordering tests that are not medically necessary,
therefore, we offer all tests contained in our panels and profiles as individual tests as well.
E. Complete Blood Counts (CBC) may be ordered with or without a WBC differential
count. An order for a CBC with Diff (WBC differential) will receive an automated
differential count unless a manual differential count is specifically ordered. Automated
differentials that reflex to a manual differential will not incur any additional charges.
F. The PSA screen is allowed as a screening test for male patients who participate in a federally
funded insurance program with a frequency limitation of one time per year. Screening PSA’s
are covered for medicare patients greater than 50 years of age when ordered with ICD code,
V76.44.
G. PAP smear orders are covered screening tests when ordered with one of these four ICD
codes: V76.2 (screening cervix), V15.89 (high risk), V76.47 (screening vaginal), and V76.49
(screening other sites).
H. A Clinical consultant for Laboratory Medicine can be reached through the Pathology
Department at 508-383-1090.
Medical necessity is determined by the diagnostic information provided by you. We greatly
appreciate your cooperation in observing the Lab Compliance Program requirements. If you have
any questions, you can contact Saint Aufranc, MD, Clinical Consultant at 508-383-1186; if you
need any specific lab compliance guidelines, contact Denise Gayner 508-383-1221.
Sincerely,
Denise Gayner
Assistant Director, Laboratory Services
Saint Aufranc, MD
Laboratory Medical Director
Clinical Consultant, Laboratory