CMS: Medical necessity errors account for more than 90% of improper payments for routine venipuncture labs

The improper payment rate for routine venipuncture lab tests was 16.3% in 2018, representing more than $20 million, and medical necessity errors accounted 98.9% of the improper payments, according to CMS. A recently released CMS fact sheet covers compliance tips to help organizations ensure they are properly billing for these services.

The fact sheet lists three tips to help prevent denials. The physician or nonphysician practitioner (NPP) treating the beneficiary must order all the diagnostic tests including routine venipuncture lab tests. Tests ordered by healthcare professionals other than the physician or NPP treating the patient are not considered reasonable and necessary and are not covered by Medicare. The ordering physician’s or NPP’s documentation in the medical record must support the medical necessity of the service. The entity submitting the claim must maintain the ordering physician’s or NPP’s documentation and other documentation in the medical record that accurately reflects the ordering physician’s or NPP’s documentation.

The fact sheet also explains Medicare’s requirements for physician or NPP orders. Orders can be delivered via written documentation this is hand-delivered, mailed, or faxed to the testing facility. A signature is not required on orders for clinical diagnostic tests paid under the Clinical Laboratory Fee Schedule or the Medicare Physician Fee Schedule or for physician pathology services.

Orders may also be delivered via a telephone call or an email to the testing facility. If the order is delivered via telephone, both the treating physician or NPP, or his or her office, and the testing facility must document the telephone call in their respective copies of the beneficiary’s medical records.