CMS Pub. 100-04, ch. 16, § 40.3

Hospital laboratories, billing for either outpatient or non-patient claims, bill the A/B MAC (A).

Neither deductible nor coinsurance applies to laboratory tests paid under the fee schedule.

Hospitals must follow requirements for submission of the ASC X12 837 institutional claim or the hardcopy

Form CMS-1450. (See Chapter 25 for a description of the data set, and for requirements for the paper form.

See the ASC X12 837 implementation guide for billing requirements for the electronic claim,).

When the hospital obtains laboratory tests for outpatients under arrangements with clinical laboratories or

other hospital laboratories, only the hospital can bill for the arranged services.

As discussed in section 30.3 (“Place of Service Variation, Critical Access Hospitals”) of this chapter, when the

CAH bills a 14X bill type as a non-patient laboratory specimen, it is paid on the clinical laboratory fee

schedule. For CAHs, payment for clinical diagnostic laboratory tests is made at 101 percent of reasonable cost

only if the beneficiary is an outpatient of the CAH (85X TOB), as defined in 42 CFR 410.2, and is physically

present in the CAH at the time the specimen is collected, for dates of service prior to July 1, 2009. However,

for dates of service on or after July 1, 2009, the beneficiary does not have to be physically present in the CAH

at the time the specimen is collected as long as certain criteria are met, per Section 148 of the MIPPA (i.e.

other outpatient services are received by the beneficiary in the CAH on the same day the specimen is collected,

or the specimen is collected by an employee of the CAH or of a facility provider-based to the CAH) (see

Section 30.3 above, Critical Access Hospital). Clinical diagnostic laboratory tests performed for a beneficiary

who is not physically present at the CAH when the specimen is collected, by a non-CAH employee or who are

not receiving other outpatient services in the CAH on the same day the specimen is collected, are paid are paid

for under the clinical lab fee schedule. Similarly, for Maryland waiver hospitals, the waiver is limited to

services to inpatients and registered outpatients as defined in 42 CFR 410.2. Therefore payment for non-patients (specimen only, TOB 14X) who are not registered outpatients at the time of specimen collection will

be made on the clinical diagnostic laboratory fee schedule.

Section 416 of the Medicare Prescription, Drug, Improvement, and Modernization Act (MMA) of 2003 also

eliminates the application of the clinical laboratory fee schedule for hospital outpatient laboratory testing by a

hospital laboratory with fewer than 50 beds in a qualified rural area for cost reporting periods beginning

during the 2-year period beginning on July 1, 2004. Payment for these hospital outpatient laboratory tests will

be reasonable costs without coinsurance and deductibles during the applicable time period. A qualified rural

area is one with a population density in the lowest quartile of all rural county populations.

The reasonable costs are determined using the ratio of costs to charges for the laboratory cost center multiplied

by the PS&R’s billed charges for outpatient laboratory services for cost reporting periods beginning on or after

July 1, 2004 but before July 1, 2006.

In determining whether clinical laboratory services are furnished as part of outpatient services of a hospital,

the same rules that are used to determine whether clinical laboratory services are furnished as an outpatient

critical access hospital service will apply.