Chapter 1.1 : Introduction

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Laboratories are subject to a wide array of regulatory compliance issues including those impacting laboratory test performance (primarily stemming from provisions under The Clinical Laboratory Improvement Amendments of 1988), those related to laboratory safety (primarily under the oversight of the Occupational Safety and Health Administration), and those relating to privacy, security, and integrity of health information (as mandated by The Healthcare Insurance Portability and Accountability [HIPAA] and Health Information Technology for Economic and Clinical Health [HITECH] Acts). When the first edition of this handbook was published, regulatory billing compliance for laboratory tests was not a major laboratory issue. Most hospital laboratories generally performed services for their own inpatients, and occasionally for affiliated outpatients, and tests were billed according to a formula established by the business office. Independent laboratories also billed primarily on a retrospective fee-for-service basis. With the advent of federal prospective payment for inpatients using diagnosis-related groups and out-patients using ambulatory payment classifications, payments were capitated and payment credit was allocated using a different formula based on expected resource utilization. Under both systems, laboratory scientists were expected to be financially knowledgeable about the tests offered in their labs, but billing processes were generally relegated to an institutional administrative unit. With subsequent editions, however, it has become clear that microbiologists must be aware not only of the scientific basis of infectious disease diagnostics and financial aspects of testing, but must also be knowledgeable regarding coding, billing, coverage, and reimbursement for individual tests for patients seen in a broad spectrum of health care settings with coverage by an enormous number of health care plans. As health care expenditures continue to increase and payers, including state and federal entities, become increasingly critical of test utilization and restrictive of payment for services, it is important that the laboratory play a central role in ensuring appropriate use of and billing for services. In addition, a number of statutory and regulatory changes have imposed increased importance upon correct coding and billing practices to avoid criminal and civil penalties associated with improper practices. Jargon previously unknown in the clinical laboratory, such as reflex testing, upcoding, downcoding, local coverage determination (LCD), and national coverage determination (NCD), is now so extensive that a glossary of common terminology is included in this section ( Appendix 1.1–1 ). The overarching financial goal of a laboratory is to be reimbursed adequately for all medically appropriate work performed in a manner that is in compliance with all relevant regulations. This section seeks to provide guidance on developing a laboratory program to ensure that reimbursement practices are compliant with payer rules and regulations. In fact, billing compliance should be to the business side of laboratory operations what compliance with the Clinical Laboratory Improvement Amendments (CLIA) 1988 is to the technical side of laboratory operations, and a robust and comprehensive plan is essential ( ).

Citation: Baselski V. 2016. Introduction, p 1.1.1-1.1.7. In Leber A (ed), Clinical Microbiology Procedures Handbook, Fourth Edition. ASM Press, Washington, DC. doi: 10.1128/9781555818814.ch1.1
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1. Scott M, Nguyen D. 2009. Clinical laboratory compliance: something old, something new. Lab Med 40: 428435.
2. Office of the Inspector General. 1998. Compliance program guidance for clinical laboratories. Fed Regist 63: 4507645087.
3. Institute of Medicine. 2000. Medicare Laboratory Payment Policy: Now and in the Future. National Academy Press, Washington, DC. ( content available at http://www.nap.edu/catalog/9997/medicare-laboratory-payment-policy-now-and-in-the-future).
4. The Lewin Group. 2008. Laboratory Medicine: A National Status Report. http://www.amcp.org/WorkArea/DownloadAsset.aspx?%id=11578
5. Centers for Medicare and Medicaid Services. 2012. Medicare Internet-Only-Manuals. http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs.html.
6. American Medical Association. 2015. CPT: Current Procedural Terminology, professional edition. American Medical Association, Chicago, IL.
7. American Medical Association. 2015. ICD 10-CM. The Complete Official Draft Code Set. American Medical Association, Chicago, IL.
8. American Medical Association. 2015. HCPCS Level II, professional edition. American Medical Association, Chicago, IL.
9. Robert Wood Johnson Foundation. 2012. Health Policy Brief: Eliminating Fraud and Abuse. http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=72.


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Citation: Baselski V. 2016. Introduction, p 1.1.1-1.1.7. In Leber A (ed), Clinical Microbiology Procedures Handbook, Fourth Edition. ASM Press, Washington, DC. doi: 10.1128/9781555818814.ch1.1
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Citation: Baselski V. 2016. Introduction, p 1.1.1-1.1.7. In Leber A (ed), Clinical Microbiology Procedures Handbook, Fourth Edition. ASM Press, Washington, DC. doi: 10.1128/9781555818814.ch1.1

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