Rules and Regulations in Reimbursement

Beyond the basic logistical issues surrounding the battle for laboratory reimbursement are a number of issues that pertain to the rules of engagement. This chapter discusses the rules set forth by third‐party payors that determine claim payment. Criteria for conditions of coverage for laboratory services historically have as their bases a number of elements such as evidence‐based‐medicine element and medical‐ethics element. The coding requirements for claim transactions have been standardized under the Health Insurance Portability and Accountability Act (HIPAA); the Centers for Medicare and Medicaid Services (CMS) require submission of all standard code and transaction sets. The chapter describes certain special coverage conditions for which unique billing rules may apply. In the Medicare program, special rules apply, particularly in the setting of end‐stage renal disease (ESRD) and its management in dialysis centers and in payment for laboratory services in Part A skilled‐nursing facilities (SNF). Medical‐necessity edits have been developed that specify both the procedures performed and the reason for performing the procedures on a given date of service. These edits when developed and applied nationally are known as national coverage determinations (NCDs) or local coverage determinations (LCDs) when developed by individual contractors on local policies. Careful review of these remittance documents provides a mechanism to identify billing problems that are costly in terms of both uncompensated labor and lost revenue. The most common reasons for claims denial include lack of medical‐necessity documentation, the fact that the service performed is noncovered, inadequacy or lack of basic identifying documentation, and incorrect coding.