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Pathology Technical Component Denials When Patient was at Hospital or SNF same day
Last Updated: 12/19/2017
Question: I am hoping you can help clarify an issue/ trend we are seeing with our pathology claims (CPT code 88305 & 88304) with Medicare. We have a dermatopathologist with an in-house lab that performs both the technical and professional components. We bill CPT codes 88304 & 88305 globally.

Recently Medicare has been recouping their payments when the patient is seen at another facility on the same date stating the patient was seen at a facility and we need to bill accordingly. We have been appealing explaining the POS 11 is correct and our lab services are unrelated to any other facility. They are upholding their denials.

One of our billers reached out to the AAD and they recommended splitting the path into 88305-26 and 88305-TC. I would like a 2nd opinion from you & if you have any thoughts on how to handle/ proper billing for these services. Thank you!

Answer: I'd wager a bet that several things are in play when this happens...

1. This is a Medicare patient (or other Federal healthcare beneficiary)
2. On that same DOS, they have received services at either an inpatient hospital or Skilled Nursing Facility (SNF)

For Medicare and other government health programs, there are some consolidated billing rules for patients that have received services at inpatient settings. This usually applies to patients in Skilled Nursing Facilities (SNF). In these cases. technical component cannot be billed and only the professional components can be billed.

However, there are also consolidated billing rules that do apply to patients in inpatient hospitals.

Essentially, a patient cannot receive both Part A and Part B benefits on the same date of servic. (Part A being their inpatient and Part B being your services).

Here is a bulletin from 2012 from CMS that explains it...

If you split the claim and bill with modifier 26 and TC, you are ONLY going to get paid for the professional component, which usually is what happens in the consolidated billing scenario. The technical component is not billable to Part B services under consolidated billing rules.

Technically, you should bill the hospital (or SNF) for the technical component portion of the path and they are supposed to reimburse you. In reality, this is often difficult to accomplish, but you can still try.

Other clients have sent multiple appeals and cover letters to the payor, explaining the scenario when this has happened and sometimes they have been successful in getting the denial overturned. But it's not always guaranteed.

Unfortunately, there is no way I know of to 'tell' ahead of time that the patient was in the hospital (or SNF), without asking each patient. This seems ridiculous to have to do when it doesn't apply to 99% of your patients.

POS = 11. That is correct. Don't change the place of service as that would be misrepresentation of where the services were rendered.

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