PAML, L.L.C., a full-service medical reference laboratory located in Spokane, WA, is a joint venture between Providence Health & Services (PH&S) and Catholic Health Initiatives (CHI). PAML has a strong commitment to ensure that its business affairs are conducted in a manner consistent with the regulations of Federal, State and local government agencies. To underscore PAML’s commitment to regulatory compliance and to better assist its employees, partners and clients to comply with applicable requirements, PAML has had a formal Compliance Program in effect since 1998.

Advance Beneficiary Notice
Laboratories that accept Medicare assignment are not allowed to bill Medicare beneficiaries for covered tests. However, there are many situations where authorized healthcare providers order tests that are not covered by Medicare. These tests can be billed to the Medicare beneficiary if the laboratory executes a valid Advance Beneficiary Notice of Noncoverage (ABN) by informing the beneficiary in advance of the service that they will be responsible for payment for the tests if Medicare should deny payment. The situations where ABNs are appropriate include the following:

• Tests that are ordered for a diagnosis or condition that in Medicare’s opinion are not medically necessary, or for which a diagnosis is not available at the time of service.
• “Screening “ tests that are performed as a part of a routine examination where the patient displays no evidence of disease;
• Tests that are performed more frequently than recommended by Medicare; or
• Tests that are considered experimental, for research use only or investigational.

The terms “limited coverage” and “Local Coverage Decision (LCD)” are frequently used to refer to the types of exclusions listed above and most Medicare fiscal intermediaries (FI), carriers or Medicare Administrative Contractors (MAC) have such exclusions in their policies. In addition, since November, 2002, National Coverage Decisions (NCDs) have been in place which will define coverage for several tests covering a number of CPT codes. These NCDs supercede any LCDs that are in conflict with them. However, where NCDs are silent on a test/CPT code, an LCD may be enacted by the FI/carrier/MAC.
It is the policy of PAML to request an ABN from Medicare beneficiaries when appropriate. CMS has established protocols for these ABNs, including the wording and the format. There are several basic requirements for a valid ABN:

• the test(s) which may be denied must be listed along with the estimated cost(s);
• the reason(s) for possible denial must be given for each test;
• the beneficiary must personally check either Option 1, Option 2, or Option 3;
• the beneficiary must sign the ABN (if the patient is unable to sign the ABN themselves, the person responsible for the patient’s usual business affairs may sign);
• the ABN must be dated for that date of service and
• a copy of the completed ABN must be given to the beneficiary.

The ABN must be available upon request by Medicare.
“Blanket” or routine ABNs for Medicare beneficiaries are not allowed. ABNs should only be requested in situations where it is anticipated that Medicare may not pay for the test(s).

Custom Profiles
It is PAML’s policy to offer a limited number of standardized organ- or disease-specific profiles as well as CPT-recognized profiles that are endorsed by CMS. Although the use of custom panels is discouraged, PAML recognizes that a physician/provider or group of physicians/providers may request PAML to structure his/her test orders to best meet the needs of the patients he/she treats. Therefore, a marketing representative will work with those clients, when expressly requested by the physician/provider, to construct custom profiles to meet the physician/provider’s specific testing needs. The marketing representative may also work with a physician/provider to create a custom requisition.

Diagnostic Documentation
The Balanced Budget Act (BBA) of 1996 amended the Social Security Act to require that, where diagnostic or other information may be required for payment to be made to an entity (e.g., laboratory, radiology), “The physician or practitioner will be required to provide diagnostic information to the entity at the time the service is ordered by the physician or practitioner.” The most accurate way of providing this information is the use of ICD-9-CM coding at the highest level of specificity.
When the physician or practitioner orders multiple tests or services, the appropriate diagnosis(es) must be provided for each requested test.
If the test or service requested is subject to the limitation of liability provisions and may be denied due to lack of medical necessity, Medicare recommends that the physician or practitioner obtain a signed Advance Beneficiary Notice (ABN) from the patient to protect the billing entity from liability.

General Health Panel
Please take a moment to review the following important information about the General Health Panel, CPT code 80050. The General Health Panel includes the following:

• Comprehensive Metabolic Panel 80054
• Complete Blood Count (CBC) 85025
• TSH 84443

Medicare and some insurance carriers exclude the General Health Panel 80050 from payment provision, deeming it to be a routine screening procedure. In fact, you will not find CPT code 80050 on Medicare’s laboratory fee schedule.
Medicare beneficiaries will be responsible for payment in full on the laboratory test General Health Panel. As a courtesy, please notify your patient that Medicare will deny payment for this procedure.

Medical Necessity
The Centers for Medicare and Medicaid Services (CMS) and the Office of the Inspector General (OIG) recognize that physicians and other authorized individuals must be able to order any test(s) that they believe are appropriate for the treatment or diagnosis of their patients. However, claims submitted for tests or services will only be paid if CMS has determined that the service is covered, reasonable, and necessary for an individual patient given his or her clinical condition.

Medicare Secondary Payer
Medicare Secondary Payer (MSP) refers to those instances in which Medicare does not have the primary responsibility for paying the medical expenses for a Medicare beneficiary.
All providers and practitioners should screen Medicare patients to obtain correct health insurance information before submitting a primary claim to Medicare. Listed below are some questions that must be asked of patients that will help recognize circumstances where Medicare may be the secondary payer:

• Are you currently employed?
• Is your spouse currently employed?
• Are you covered under an employer or union health plan that should be primary to Medicare?
• Did you sustain an injury/illness while at work?
• Are your injuries accident related?
• By using the above questions to initially screen Medicare patients, this will help reduce costs to the Medicare Program.

Requisitions provided to the laboratory should reflect accurate patient insurance information, including screening for Medicare Secondary Payer. Laboratory ­Patient ServiceCenter employees will provide Medicare Secondary Payer screening when performing phlebotomy on Medicare beneficiaries. Physician offices that are unable to provide Medicare Secondary Payer screening are encouraged to direct their patients to our Patient Service Centers for this vital requirement of the Medicare Program.

Reflex Testing
It is the policy of PAML to carefully evaluate all reflexive testing using the following criteria:

• Is the reflexive test required by accrediting agencies (e.g., CAP) or by federal or state mandates (e.g. CLIA, Washington State Medical Test Site license)?
• Is the reflexive test considered “good laboratory practice,” providing accurate clinical information to the physician?
• Does the reflexive test incur an additional charge, or is it included in the standard test charge?
• Is the ordering physician clearly given the option to order a test with – as well as without – the reflexive test being performed?
• Has the ordering physician/provider been informed through the design of the requisition form, information in the PAML Test Directory, and Test Alerts and Updates of the possibility of reflexive testing being performed and charged for?
• All tests preprinted on the requisition(s) that might have reflexive tests available clearly offer the option to order with or without reflex testing.

For your convenience, all tests that may reflex are clearly identified within the test information section of the Test Directory. The statement, “This test may ­reflex to additional tests depending upon the results of this test. An ­additional fee may be added” (or a similarly worded statement) appears within each of these listings.

Standing Orders
A standing order is an order from a medical provider requesting that specific lab work be performed on a specific patient on a set routine schedule. Although standing orders are generally discouraged, it is permissible under existing regulations to perform tests pursuant to standing orders executed in connection with an extended course of treatment.
In order to ensure the validity of such standing orders, consistent with federal and state requirements, PAML requires the following:

• Initial standing orders must be in writing and must include the name of the patient, the test(s) covered by the standing order, the diagnosis code/narrative, the frequency of such test(s), the start date for the order (and end date, if applicable), and the authorized person who is ordering the tes(s).
• If the frequency and/or the test(s) ordered should change during the course of the standing order, a new order must be written.
• If the diagnostic information used to determine medical necessity should change during the course of the standing order, a new order must be written with new diagnostic information.
• Standing orders will be verified, at a minimum, on an annual basis, at PAML patient service centers/draw stations, for long term care/nursing home facilities, for home draws and for ESRD (End Stage Renal Disease) patients. This verification will be patient-specific, reviewed and executed by the test-ordering person (or designate), dated and in written form.
• Current standing orders as well as old/invalidated orders must be retained per PAML record retention policies.

In the case of Medicare patients when the test(s) ordered may not be covered by Medicare, the Advance Beneficiary Notice (ABN) can be signed at the time the order is initiated and will be effective until the standing order is modified. The ABN will be verified and documented on an annual basis.