Sole Community Hospitals (SCHs)

SCHs are paid under the OPPS. Therefore, the new OPPS packaging policies apply to SCHs as to other OPPS hospitals for laboratory and other services furnished on or after January 1, 2014. However, SCHs with qualified laboratories continue to be eligible for the 62 percent CLFS payment amount described in the “Medicare Claims Processing Manual” (Pub. 100-04 Chapter 16, Section 40.3) when they furnish outpatient lab tests that are separately payable under exceptions (2) or (3) listed above. The 014X TOB does not provide differential CLFS payment rates for SCHs with qualified laboratories and other OPPS hospitals. Qualified SCHs must submit a 013X TOB with the new modifier appended to separately payable outpatient lab services in order to obtain the 62 percent CLFS payment amount provided in current manual instructions. CMS recognizes that these providers may wish to cancel or adjust claims that are submitted without the new modifier prior to July 1, 2014, and submit a new 013x claim with the appended modifier after July 1, 2014, in order to receive corrected reimbursement or for other reasons when the new modi
fier is implemented in July.

CMS will be reviewing claims data for CY 2014 for potential inappropriate unbundling of laboratory services under the new OPPS packaging policy. As stated in the OPPS final rule, CMS does not expect changes in practice patterns under the new policy. Hospitals may not establish new scheduling patterns in order to provide laboratory services on separate dates of service from other hospital services for the purpose of receiving separate payment under the CLFS.

Billing Scenarios for the New Modifier (on or after July 1, 2014): 


1)A patient goes to hospital and the hospital only collects the specimen and furnishes only laboratory services on that date of service. No other services are rendered on this date of
service. It is generally appropriate to append the new modifier to the laboratory services (see example 2).

2)A beneficiary has a pre-surgery exam in a provider-based clinic for an outpatient cataract surgery that is scheduled in two weeks with the ophthalmologist. On the same day, while at the hospital the beneficiary goes to the hospital lab to have blood drawn for long-term psychiatric medication monitoring, by order of a community psychiatrist. In this situation, the hospital can use the new modifier to bill Medicare for separate payment under the CLFS of the lab test to monitor the patient’s psychiatric medication level. However, any lab tests run by the hospital lab that day upon the order of the ophthalmologist or another physician in the ophthalmologist’s group practice in preparation for the cataract surgery cannot be billed for separate payment.

3) The beneficiary in example 2 goes to the hospital lab to have blood drawn for long-term psychiatric medication monitoring, by order of a community psychiatrist, and has no other
hospital services that day. The hospital can use the new modifier to bill Medicare for separate payment under the CLFS of the lab test to monitor the patient’s psychiatric medication level.

4) The beneficiary in example 2 has the pre-surgery exam in the ophthalmologist’s free-standing physician office. The ophthalmologist refers the beneficiary to the hospital lab located across the street for diagnostic lab tests in preparation for the upcoming out
patient surgery. The beneficiary has to immediately return to work and chooses to have the lab work done at the hospital 2 days later. The hospital can use the new modifier to bill Medicare for separate payment under the CLFS.

5) The beneficiary in example 3 goes to the hospital lab the same day to have the pre-surgical labs drawn. The hospital can use the new modifier to bill Medicare for separate payment under the CLFS.