Lab DOS exception enforcement discretion period extended again

CMS is extending its enforcement discretion period for its laboratory date of service (DOS) exception policy to January 2020, according to an update and an FAQ posted on its Laboratory Date of Service Policy page.

During the enforcement discretion period, hospitals may continue to bill for advanced diagnostic laboratory tests (ADLT) and molecular pathology tests that would otherwise be subject to the laboratory DOS exception.

Under the lab DOS exception policy, for ADLTs and molecular pathology tests excluded from OPPS packaging, the DOS is the date the test was performed rather than the date of specimen collection if the following conditions are met:

• It was medically appropriate to have collected the sample from the hospital outpatient during the hospital outpatient encounter
• The results of the test do not guide treatment provided during the hospital outpatient encounter
• The specimen was collected from a hospital outpatient during an encounter
• The test is performed following a hospital outpatient’s discharge from the hospital outpatient department
• The test was reasonable and medically necessary for the treatment of an illness

This separates the lab test from the hospital encounter, which means that the lab must bill Medicare directly instead of billing the hospital outpatient department.

This is not the first time CMS has delayed enforcement of the policy. The policy adding ADLTs and molecular pathology tests to the lab DOS exception originally went into effect in January 2018. In July 2018, CMS announced a six-month enforcement discretion period. However, in December 2018 the agency extended the enforcement discretion period for another six months. CMS states that it made the decision to extend the enforcement discretion period yet again based on stakeholder feedback that suggested many entities were not ready to comply with the policy.

Labs that are prepared to bill Medicare directly for ADLTs and molecular pathology tests subject to the lab DOS exception should do so. Those that are not ready should use the next six months to come into compliance with CMS’ requirements.