Requisitions Will Allow Ordering of CMS-Approved Panels Only As Well As Single Tests

Requisitions Will Allow Ordering of CMS-Approved Panels Only As Well As Single Tests

DEPARTMENT: Governmental Operations Support / POLICY DESCRIPTION: Laboratory - Marketing Practices
PAGE:1 of 5 / REPLACES POLICY DATED: Jan. 21, 1998, April 16, 1999; April 1, 2000, Jan. 1, 2002
APPROVED: November 12, 2002 / RETIRED:
SCOPE: All Company-affiliated hospitals performing and/or billing laboratory services. Specifically, the following departments:
Business Office Marketing
Admitting/Registration Laboratory
Medical Staff Health Information Management
Revenue Integrity Physician Office Staff
Administration Reimbursement
Allied Health Practitioners
Service Centers
PURPOSE: To establish guidelines for the marketing of laboratory services in an honest, straightforward, informative, compliant, and non-deceptive manner.
POLICY: It is the responsibility of the Laboratory to verify that Clients (as defined below) fully understand the services offered, the services that will be provided when tests are ordered, and the financial consequences for the tests ordered.
Client: A Client may be: a physician, employer, reference, or other laboratory to whom laboratory services are provided as requested and billed on a monthly basis.
Fair Market Value: Fair market value is the value of a service in arm’s-length transactions, consistent with the general market value. In other words, there is no inappropriate and/or undue influence on either party.
PROCEDURE: Laboratory personnel must educate all physicians and their associates responsible for ordering and utilizing laboratory services on the contents of this policy.
Refer to the following guidelines when developing a laboratory marketing plan:
1.Test Orders & Requisitions:
  • Requisition forms may be provided to all Clients at no charge.
  • Requisitions will allow ordering of CMS-approved panels only as well as single tests.
  • All test orders must include all of the elements defined in the Orders for Outpatient Tests and Services Policy, GOS.GEN.004.
  • Verbal orders must be authenticated as specified in accordance with the facility’s medical staff bylaws and/or state rules and regulations. Written confirmation must be requested within 24 hours.
  • Reflex testing must be specifically requested by the ordering physician or performed as a result of approved reflex criteria when abnormal results exist. Reflex testing guidelines must be approved annually by the medical staff as specified in the Reflex Orders Policy, GOS.LAB.010.
  • Requisition forms will be reviewed for billing compliance and updated as needed. As this occurs, new or revised forms will be sent to all Clients with instructions to discard the outdated forms.
2.Test/Pricing Information:
Laboratory personnel must review and verify that applicable revisions are made to the chargemaster and related laboratory and order entry masterfiles/dictionaries so that each charge associated with a procedure is priced no less than the fair market value and cost. The following documentation should be maintained:
  • Supporting calculations for arriving at cost per procedure;
  • Procedure price which should reflect any discounts, if applicable;
  • Price list documenting current fair market value; and
  • Effective date the procedure price was implemented in the chargemaster.
All Clients will be provided with a complete listing of laboratory services which includes: laboratory name and address, Medical Director name and phone number, laboratory phone and fax numbers, test name, CPT/HCPCS code, pricing structure, and other information (such as specimen requirements).
Clients must not be charged less than fair market value and cost since an inference may be made that the lower price is offered to induce referral business.
Laboratory services must never be provided to any customer free of charge or as a professional courtesy in order to induce referrals.
Clients will be billed on a monthly basis and the bill must include at a minimum: patient name, date of service, test(s) performed and fee charged.
It should be noted thatMedicare requires direct billing of outpatient laboratory services by the laboratory performing the tests unless otherwise permitted by the Referred Laboratory Testing Policy, GOS.LAB.009, Technical Component of Anatomical Pathology Services for Inpatients and Outpatients Policy, GOS.LAB.015, and SNF Laboratory Services Policy, GOS.LAB.020.
3. Courier Service:
  • Courier service may be provided at no charge to all laboratory Clients provided that specimens are to be delivered to the facility laboratory.
  • Transported specimens must be packaged and handled according to OSHA guidelines.
4. Equipment & Supplies:
  • Equipment provided to Clients at no charge or below fair market value must be used exclusively in conjunction with ordering and testing of laboratory services provided by the facility laboratory.
  • Reusable items that can be of value in the Client’s operations separate and apart from the clinical laboratory work to be provided by the facility laboratory cannot be provided at no charge or below fair market value.
  • Examples of permissible items that can be provided at no charge or below fair market value are: specimen tubes, urine cups, venipuncture needles, and specimen pick-up boxes.
  • Examples of prohibited items that cannot be provided at no charge or below fair market value are: general office supplies, gloves, tourniquets, injection needles, snares, biopsy needles, syringes, phlebotomy chairs, and refrigerators.
  • Provision of equipment and supplies must be in accordance with federal and state laws and regulations. If you have any questions concerning what equipment and supplies may and may not be provided at no charge or below fair market value to Clients, consult with your assigned operations counsel.
5. Contracts & Agreements:
  • Laboratory testing requested for patients whose insurance requires testing to be performed by a contracted reference laboratory other than the facility laboratory must be submitted to the facility laboratory using the appropriate reference laboratory requisition. Test samples must be sent to the reference laboratory specified on the laboratory requisition.
  • All Clients doing business with the facility laboratory must sign a written agreement. Attachment A of this policy provides a template for such a written agreement. Prior to contracting with physicians or other individuals authorized to order tests, a review of the OIG Program Exclusions list must be conducted. Contracts are not to be entered into with individuals that have been excluded from Medicare participation and listed on the OIG’s Program Exclusion list.
  • The Skilled Nursing Facility Prospective Payment System (SNF PPS) and Consolidated Billing rules require that the SNF bill for virtually all services provided to its SNF patients. It is recommended that a written agreement as defined in this policy exist between your facility and SNFs in your community to which you will be providing services. However, some SNFs may refuse to enter into such contractual arrangements. If services are provided to residents of a SNF that does not have a written agreement with the facility, the SNF is obligated to pay billed charges to the facility pursuant to the SNF PPS and Consolidated Billing rules.
  • All written agreements must outline the services offered, including courier services, provision of equipment, fee schedules, and billing practices.
  • Any changes to the attached form agreement must be reviewed and approved in advance by the facility’s operations counsel.
6. Education & Communication:
  • Annual written notification of and/or training on the following policies and guidelines will be made available to Clients and medical staff:
Orders for Outpatient Tests and Services (GOS.GEN.004)
Medical Necessity Guidelines, Local Medical Review Policies and National Coverage Decisions
Medical Necessity Policy (GOS.GEN.002)
ABN Form and Policy (GOS.GEN.003)
Organ & Disease Policy (GOS.LAB.004)
Custom Profiles Policy (GOS.LAB.007)
Reflex Testing Policy (GOS.LAB.010)
Outpatient Services and the Medicare Three Day Window Policy (GOS.BILL.001)
Laboratory – Marketing Practices Policy (GOS.LAB.023)
  • Ordering physicians and their office staff must be contacted when ordering information is incomplete.
  • The Medical Director or Clinical Consultant is available for consultation regarding laboratory orders and results.
  • Updated Local Medical Review Policies and National Coverage Decisions will be sent to Clients/medical staff as applicable.
7. Annual Review:
  • The Facility Ethics and Compliance Committee must review the requirements and implementation of this policy on an annual basis.

OIG Model Compliance Plan for Clinical Laboratories, March 1997, Federal Register Vol. 62, No. 41
Stark Self Referral Prohibitions, 42 U.S.C., 1395nn.
Medicare Anti-Kickback Statute 42 U.S.C., 1320a-7b.
The Office of Inspector General’s Compliance Program Guidance For Clinical Laboratories (August 1998)Med-Manual, Med-Guide 10,285.03, Independent Laboratory Services
Med-Law, Med-Guide, SS Act Section 1861, Definitions of Services, Institutions, ETC. 42 U.S.C.
Med-Law, Med-Guide, SS Act Section 1833, Payment of Benefits, Subse (h), Clinical Diagnostic Laboratory Tests


Attachment A

Clinical Laboratory Services Agreement


THIS CLINICAL LABORATORY SERVICES by and between ______, with a business address at (hereinafter referred to as “GROUP”), and _____ , whose address is

______(hereinafter referred to as “LAB”).

1. Services

The parties agree that LAB is to provide only clinical laboratory services for the patients of the GROUP under the terms and conditions of this Agreement and in accordance with all applicable requirements of federal, state or local laws, rules, and/or regulations, third party reimbursement sources (public or private), or other reimbursement sources covering LAB services. Clinical Lab services may include, but are not limited to: microbiology, virology, mycology, serology, chemistry, urinalysis, hematology, or immunology testing performed on samples to provide information for the diagnosis, prevention, or treatment of a disease or assessment of a medical condition. LAB shall provide service twenty-four hours per day, seven days per week to GROUP. LAB agrees to render clinical laboratory services for the patients of GROUP in accordance with orders given by the physicians of said patients. Every endeavor shall be made to complete STAT tests within ______hours of the request for said tests by GROUP. The parties agree that any laboratory services ordered as STAT tests by a physician shall be considered emergency procedures*. Most routine tests will be performed and reported within ______hours, unless the test is esoteric or a microbiology test which requires longer turnaround.

*It is understood that in some isolated instances it may not be realistic to complete these tests within this time frame (examples would include such things as STAT cultures and/or tests referred to an independent reference laboratory). Needed documentation to substantiate this delay shall be provided by LAB upon GROUP’s request.

2. Term & Termination

  1. Term. This Agreement shall remain in effect for a term beginning on and ending at midnight on , unless otherwise terminated as provided herein.

B. Termination. Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time as follows:

B.1.Whenever GROUP and LAB shall mutually agree to the termination in writing; or

B.2.Except as provided elsewhere in this Agreement, with cause by either party upon the default by the other party of any term, covenant or condition of this Agreement, where such default continues for a period of ten (10) business days after the defaulting party receives written notice thereof from the other party specifying the existence of such default; or

B.3.Without cause by either party upon at least thirty (30) days prior written notice to the other party in which case the Agreement shall terminate on the future date specified in such notice, except that no such termination without cause shall take effect prior to the first annual anniversary of the Agreement; or

B.4.Upon the filing of voluntary or involuntary bankruptcy by either GROUP or LAB; or

B.5.Upon either party’s loss of license, accreditation or certification.

3.Compensation & Billing

A. Procedures for Billing GROUP. GROUP may order or request LAB services to be provided directly to GROUP (and not to or on behalf of a particular patient or GROUP employee) where such services will be paid for directly by GROUP. Under such circumstances, GROUP will give LAB written notice of those services for which GROUP will pay LAB directly for the provision of services to GROUP except as otherwise prohibited in section B below.

For the provision of such services, LAB will bill GROUP monthly, and GROUP agrees to reimburse LAB at the rate set forth in Exhibit “A” as the current fees to be charged to GROUP for services rendered hereunder. Any amendments or changes to the scheduled fees, Exhibit “A”, shall be effective forty-five (45) days following the date upon which LAB has notified GROUP in writing, at which time the amended schedule will become part of this Agreement. No tests or services will be priced below the fair market value as required by law.

LAB will submit to GROUP on a monthly basis an invoice, which will reflect services rendered from the first day of the calendar month to the last day of the calendar month, will be in the form reasonably required by GROUP and will be submitted to GROUP within 30 days of the end of the calendar month. GROUP agrees to pay LAB within thirty (30) days of receipt of LAB'S invoice.

Such invoice shall include the following:

a)Name and address of LAB.

b)Name and address of GROUP.

c)Name of each patient to whom services were provided, the date each service was provided, the accepted nomenclature of the services provided, and the total charge for services.

B. Procedures for Billing Other Payers. Except in the circumstances where GROUP informs LAB to bill GROUP for the services rendered, LAB will be solely responsible for determining the appropriate party (i.e., Medicare, Medicaid, or a managed care organization) functioning as the GROUP patient’s third party reimbursement source (collectively referred to as the "Appropriate Payor"). GROUP will make reasonably available any information it may have regarding the GROUP patient’s Appropriate Payor, including such Payer’s rules, regulations, contractual obligations, or other procedures pertaining to appropriate billing practices.

Notwithstanding GROUP’s instructions to LAB to the contrary, LAB will be compensated for services rendered to or on behalf of GROUP patients that are Medicare beneficiaries by directly billing the Medicare system, or as otherwise required by applicable Medicare billing regulations. LAB will be compensated for services rendered to or on behalf of all other GROUP patients (not provided for above) by following the Appropriate Payer’s respective rules, regulations, contractual obligations, or other procedures pertaining to appropriate billing practices if LAB is requested by GROUP to direct bill the Appropriate Payor.

GROUP and LAB will work together in good faith to reduce reimbursement denials by providing adequate documentation, including proper coding for the medical necessity of laboratory services. GROUP shall be responsible for payment to LAB for services rendered should the Appropriate Payor deny the LAB’s claim (or should such claim be deemed invalid) as a result of insufficient information provided by GROUP or lack of medical necessity at the time of the physician’s order. Except as provided above, in the event LAB fails to receive payment for a service provided to or on behalf of a GROUP patient that LAB was directed by GROUP to direct bill, LAB will not look to GROUP for payment, in whole or in part, and LAB will have no right of recovery against GROUP.

  1. Test Information

LAB will provide GROUP with the following test information:

  • Laboratory name and address
  • Laboratory phone and fax number
  • Medical Directors name and phone number
  • Tests Offered, including: test name, pricing, CPT/HCPCS code, and specimen requirements.
  1. Test Orders and Forms

A. Orders. All tests ordered by GROUP will be performed by or referred to another laboratory by LAB. All test orders must be accompanied with a diagnosis, sign, symptom, and/or ICD-9-CM code associated with the test(s) being ordered. Verbal test orders must be authenticated as specified in accordance with the LAB’s medical staff by-laws and/or state rules and regulations. Standing orders (also called recurring orders) must be written, authenticated and renewed in accordance with the LAB’s medical staff by-laws and/or state rules and regulations.

B. Forms. Requisition, Medicare Secondary Payer and Advance Beneficiary Notice forms will be provided to all customers at no charge. The LAB’s requisition forms will allow ordering of CMS approved panels and single tests. Additional space will be provided to order tests not listed on the requisition. Requisition forms will be reviewed for billing compliance and updated as needed. As this occurs, new or revised forms will be sent to all Clients with instructions to discard the outdated forms. Laboratory testing requested for patients whose insurance requires testing to be performed by a contracted reference laboratory other than the LAB must be submitted to the LAB using the appropriate reference laboratory requisition form. Test samples will be sent to the laboratory specified on the requisition.

  1. Records

A.Record Retention Requirements Compliance. LAB agrees to keep and maintain any and all records, including but not limited to medical and financial records, for services rendered by LAB to patients in GROUP as may be required by federal, state, or local government agency, GROUP policies or other parties to whom billings for LAB’s services are rendered. Such records shall include documentation of the determination by the physician, as required by federal law and regulations, that the services ordered by the physician are medically necessary for the patient in the event that the patient is a beneficiary of the Medicare program, and also documentation that the information submitted with each claim accurately reflects the information received from the physician who ordered the services.

B.Laboratory Report Timely Delivery and Contents. LAB agrees to deliver a copy of the original laboratory report in a timely manner to GROUP. The laboratory test report will include at a minimum: patient’s name, date of test, test name, test result, normal values, laboratory name and address. LAB shall report all abnormal and STAT reports to GROUP or to the patient’s attending physician, as directed by GROUP. LAB agrees to make all records on GROUP’s patients to whom LAB has rendered service available for GROUP inspection upon request.