August 2008 Newsletter

Medicare Part B News

By: Quality Assurance Specialist

CMS has issued a Joint Signature Memorandum that may be of interest to some of you. It involves how independent laboratories bill for the technical component of physician pathology services furnished to hospital patients.

Reinstatement of the Moratorium

In the final physician fee schedule regulation published in the Federal Register November 2, 1999, the Centers for Medicare & Medicaid Services (CMS) stated that it would implement a policy to pay only the hospital for the Technical Component (TC) of physician pathology services furnished to hospital patients. Prior to this proposal, any independent laboratory could bill the carrier under the physician fee schedule for the TC of physician pathology services for hospital patients.

At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements, the implementation of this rule was administratively delayed. Subsequent legislation formalized a moratorium on the implementation of the rule. As such, the carriers have continued to pay for the TC of physician pathology services when an independent laboratory furnishes this service to an inpatient or outpatient of a covered hospital.

The most recent extension of this moratorium, established by the Medicare, Medicaid, and SCHIP Extension Act (MMSEA), expired June 30, 2008. A new extension of the moratorium has been established by the Medicare Improvements for Patients and Providers Act of 2008, retroactive to July 1, 2008.

The prohibition is now rescinded and the moratorium will continue effective for claims with dates of service on or after July 1, 2008, but prior to January 1, 2010.

(From CMS Joint Signature Memorandum (JSM) 08413, dated July 17, 2008, and LR 200807-23)