American College of Physicians: Internal Medicine — Doctors for Adults ®


CMS establishes national standards for lab tests

From the July-August ACP-ASIM Observer, copyright 2002 by the American College of Physicians-American Society of Internal Medicine.

By Brett Baker

Q: How will Medicare's new rule for common lab tests help physicians?

A: The new rule establishes national coverage and administrative policies for common clinical diagnostic laboratory services covered under Medicare Part B. The Centers for Medicare and Medicaid Services (CMS) developed the rule to address a number of specific complaints.

Physicians had complained that lab test policies varied throughout the country.

They claimed that the most prominent day-to-day hassle in their practices was dealing with Medicare carriers' local medical review policies (LMRPs) for laboratory tests. These policies limit coverage of certain tests to specific diagnosis codes. Because carriers weren't following a national standard, physicians and their staff had to spend a great deal of time trying to find out which diagnoses justified which tests in order to be covered by Medicare.

In addition, LMRP variation also resulted in an inequitable distribution of benefits to beneficiaries. Many questioned the fairness of a system that pays for a test for one beneficiary, but not for another in the same geographic area just because the test was performed in a different state and subjected to different payment rules.

CMS published the final rule on November 23, 2001; most provisions take effect November 25, 2002. The rule is summarized below.

National coverage

The rule establishes national coverage policies for 23 clinical laboratory tests that account for 60% to 70% of the tests Medicare covers. This creates uniformity of coverage and prevents Medicare carriers from creating local policies that contradict the national rule. Unlike the current hodgepodge of local policies, the new national policy was developed by a consensus of experts in each respective field.

The 23 tests are:

  • Alpha-fetoprotein
  • Blood counts
  • Blood glucose
  • Carcinoembryonic antigen
  • Collagen crosslinks (any method)
  • Digoxin therapeutic drug assay
  • Fecal occult blood
  • Gamma glutamyl transferase
  • Glycated hemoglobin/glycated protein
  • HIV diagnosis
  • HIV prognosis, including monitoring
  • Hepatitis panel
  • Human chorionic gonadotropin
  • Lipids
  • Partial thromboplastin time
  • Prostate specific antigen
  • Prothrombin time
  • Serum iron
  • Thyroid
  • Tumor antigen by immunoassay—CA125
  • Tumor antigen by immunoassay—CA15-3/CA27
  • Tumor antigen by immunoassay—CA19-9
  • Urine culture

National administrative policies

The rule also establishes uniform, national administrative policies for documentation and record keeping, frequency limits, claims processing, reasons for denial and communication and implementation.

The uniform policies set reasonable standards regarding the information an ordering physician should provide when ordering a laboratory test. Second, they set a uniform process that Medicare carriers must use when reviewing laboratory claims for medical necessity (including informing physicians of requests for medical record documentation for a laboratory claim). Finally, they prohibit carriers from denying claims based solely on frequency, without first publishing a recommended frequency that physician specialty societies help develop.

To view the entire rule, go to, scroll down to "Centers for Medicare and Medicaid Services," and click on the links for "clinical diagnostic laboratory services; coverage and administrative policies; negotiated rulemaking."

Watch for more information on College educational offerings regarding the new rule.

Brett Baker is a third-party payment specialist in the College's Washington office.


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