CMS Pub. 100-02, ch. 1, § 50.3

Clinical Laboratory Under Arrangements With the Hospital

(Rev. 1, 10-01-03)

A3-3101.5.C, HO-210.5

Diagnostic services furnished to an inpatient by an independent clinical laboratory under

arrangements with the hospital are reimbursable under hospital insurance provided the

lab is certified by CLIA to perform the services.

An independent laboratory is one which is independent both of an attending or

consulting physician's office and also independent of any hospital which meets at least

the requirements to qualify as an emergency hospital (e.g., maintains clinical records, has

a utilization review plan, meets the health and safety requirements found necessary by the

Secretary of Health and Human Services).

A consulting physician is one whose services include history taking, examination of the

patient and, in each case, furnishing to the attending physician an opinion regarding

diagnosis or treatment. A physician providing clinical laboratory services for patients of

other physicians is not considered to be a consulting physician.

A laboratory operated by or under the supervision of a hospital (or the organized medical

staff of the hospital) that does not meet at least the definition of an emergency hospital is

considered to be an independent laboratory. However, a laboratory serving hospital

patients and operated on the premises of a hospital that meets the definition of an

emergency hospital is presumed to be subject to the supervision of the hospital or its

organized medical staff and is not an independent laboratory. A laboratory that a

physician or group of physicians maintains for performing diagnostic tests in connection

with their own or the group practice is also not considered to be an independent

laboratory.

An out-of-hospital laboratory is ordinarily presumed to be independent unless there is

written evidence establishing that it is operated by or under the supervision of a hospital

that meets at least the definition of an emergency hospital or of the organized medical

staff of such a hospital. Refer to “The Conditions of Participation for Hospitals” found at

42 CFR 482 and below for a description of independent lab approval requirements when

the hospital is participating.

Where a laboratory operated on hospital premises is claimed to be independent or where

an out-of-hospital facility is designated as a hospital laboratory, the CMS regional office

makes the determination concerning the laboratory's status.

A clinical laboratory is a laboratory where microbiological, serological, chemical,

hematological, radiobioassay, cytological, immunohematological, or pathological

examinations are performed on materials derived from the human body, to provide

information for the diagnosis, prevention, or treatment of a disease or assessment of a

medical condition.

The "Conditions of Participation for Hospitals (HIRM-1)" call for independent clinical

laboratory services furnished under arrangements made by a hospital to be furnished only

by a laboratory meeting the specified conditions for coverage under the program. These

require that:

• Where State or applicable local law provides for licensing of independent clinical

laboratories, the laboratory is either licensed under law or is approved as meeting

the requirements for licensing by the State or local agency responsible for

licensing laboratories; and

• Such laboratories also meet the health and safety requirements prescribed by the

Secretary of Health and Human Services. (See “The Conditions of Participation

for Hospitals” at 42 CFR 482).

Where independent laboratory services are provided to patients of a participating hospital

under arrangements with the hospital, the law does not require as a condition of payment

in an individual case that the independent laboratory be approved under the program. In

processing individual claims, the A/B MAC (A), therefore, need not verify that the

services were obtained from an approved laboratory. The A/B MAC (A) should make

payment for laboratory services although it may know that the laboratory from which the

hospital has obtained the service is not approved under the program. However, it should

promptly refer this information to the appropriate regional office for review of the

determination of the hospital's compliance with the conditions of participation and for

whatever action the regional office deems appropriate. The above policy applies to PPS

exempt hospitals. Note that under PPS, there is no separate payment for lab services

furnished to inpatients.