Certain clinical diagnosis procedures listed in the Pathology and Laboratory sections of the Physicians’ Current Procedural Terminology (CPT) (1) are not considered a part of the laboratory fee schedule. The procedures listed below are paid from the Physician Fee Schedule at 80% of the amount listed on that fee schedule. The beneficiary is responsible for the remaining 20% once the annual deductible has been met. These procedures are not subject to national limitations:

  • Clinical pathology consultations
  • Bone marrow smears and biopsy
  • Blood bank physician services
  • Skin tests
  • Anatomical and surgical pathology services
  • Duodenal and gastric intubation
  • Sputum and sweat collection

Medicare tests must be billed on an assigned basis. This means that the provider must accept the Medicare reimbursement as payment in full for any covered laboratory test. Medicare patients may not be billed for any additional amounts for covered tests. (See below for policies regarding tests that are not covered by Medicare). Medicare patients may be billed for non-covered services. The mandatory assignment requirement for laboratory tests applies regardless of whether the physician is participating (accepts assignment for all Medicare services) or non-participating (does not accept assignment for all Medicare services).
Direct billing is also required for all Medicare-reimbursed laboratory tests. Tests must be billed directly to Medicare by the laboratory or physician performing the tests. If an outside laboratory performs a test on a referral from a physician, only the reference laboratory may legally bill Medicare for the procedure.
However, hospitals and reference laboratories that send specimens to other laboratories may bill Medicare for tests performed by the other laboratories if the referring laboratory meets any one of the following three exceptions:

  • (a) The referring laboratory is located in or is part of a rural hospital;
  • (b) The referring laboratory is wholly owned by the reference laboratory, or the referring laboratory wholly owns the reference laboratory, or both referring laboratory and reference laboratory are wholly owned by a third entity; or
  • (c) No more than 30% of the clinical diagnostic tests for which a laboratory receives requests annually are performed by another laboratory other than an ownership-related laboratory.

For the purpose of the 30% exception, each CPT code billed counts as one test. For example, when CPT code 80054 is billed, it is counted as one test although 12 tests are performed.