Chapter 35 : Correct Coding of Billable Services in the Clinical Laboratory

Abstract:

This chapter explains the importance of using the standardized coding systems recognized by payors. It lists a set of critical parameters that one must specify in accounting for laboratory services. For each parameter, the laboratory must use standard language to communicate with payors and for use in benchmarking comparisons of practices to assess efficiency and effectiveness of services provided. The purpose of current procedural terminology (CPT) is to provide a uniform language that accurately describes medical, surgical, and diagnostic services for financial and administrative purposes and to serve as a standard means of identifying and documenting services performed. There is an established hierarchy for choice of CPT codes that places analyte first, followed by method, and then finally the use of a generic “not otherwise specified” code. Under capitated or prospective payment systems, laboratories may find themselves in the situation of representing financial liabilities rather than revenue generators. To balance this perception, it is extremely important for laboratories to develop mechanisms to document all work performed in a given clinical setting. The chapter discusses inpatient diagnosis coding, outpatient diagnosis coding, besides other patient groups. In most large laboratories, there are multiple departments performing testing, and it is necessary to assign each entity designated as an independent financial center a unique identifier for financial analysis purposes. It is recommended that the laboratory performs annual updates of procedure coding, including impact of changes on service manuals, requisitions and order entry systems, and charge masters.