February 2, 2024 | By Christine Hall, Senior Consultant, CHC, CPC, CPB, CPMA, CRC, CEMC, CPC-I Certified Instructor
Navigating Healthcare Claims and Audits for Purchased Diagnostic Testing: In the complex world of healthcare, accurate reporting of services is crucial for ensuring quality patient care and fair compensation for medical providers. One significant aspect of this process involves purchased diagnostic testing, where medical tests are conducted outside the healthcare organization. In this tip, we’ll delve into the essentials of healthcare claim reporting and the auditing process related to purchased diagnostic testing.
Healthcare claims are the documents submitted by healthcare providers to insurance companies or other payers to request reimbursement for services rendered. These claims contain detailed information about the provided services, including diagnostic testing, and are vital to the healthcare billing and payment system.
When a healthcare provider purchases diagnostic services like laboratory services or contracts with an outside specialist to interpret a diagnostic test, the healthcare provider is outsourcing a specific medical test or service to another place instead of doing it all in their office.
Here’s how it works: the healthcare provider orders a diagnostic service, like a specialized test, but instead of doing it themselves, they outsource the testing or the interpretation of the test to an external provider, like a separate laboratory, testing facility, or specialist healthcare provider like a radiologist. The healthcare provider purchases or buys this service from that outside provider.
It’s a bit like a collaboration – the ordering healthcare provider relies on the expertise of another professional or facility to carry out a particular test or service. This way, patients can still get the necessary diagnostic services, even if their primary healthcare provider doesn’t have all the equipment or expertise in-house. The healthcare provider pays the third-party provider for the service, ensuring the patient gets the best and most accurate care.
Healthcare Claim Reporting for Purchased Diagnostic Testing.
The Centers for Medicare and Medicaid Services (CMS) anti-markup limitation must be considered when reporting purchased tests. The anti-markup payment limitation is a price limitation rule that regulates payment when a test or service is purchased from a third-party provider, and the ordering healthcare provider is billing for the test or service; certain payment restrictions apply.
When these restrictions are in place, the reimbursement the billing healthcare provider or supplier gets (after subtracting any deductibles or coinsurance) for the technical or professional part of the test cannot be more than the performing healthcare provider’s net charge.
To make sure of this, healthcare providers must charge Medicare the lowest of these three amounts for the test:
- The performing supplier’s net charge (after subtracting the cost of equipment or leased space).
- The actual charge by the billing healthcare provider or supplier.
- The fee schedule amount for the test if the performing supplier billed Medicare directly.
If a healthcare provider accepts an assignment, they can only charge the patient the deductible and coinsurance for the test. If not accepting the assignment, the healthcare provider can only bill the fee schedule amount for the test, and the limiting charge provision doesn’t apply. Failure to provide supplier details and required information results in no payment, and the healthcare provider may be unable to bill the patient for the test.
It’s like a limit on how much money can change hands when different healthcare providers are involved in a Medicare-covered test. This helps ensure fair payments and stops any extra charges if healthcare providers aren’t closely connected in their practice.
Auditing Process
The auditing process in healthcare involves thoroughly examining healthcare claims to ensure compliance with coding and billing standards. For purchased diagnostic testing, audits may be conducted to verify the accuracy of documentation, coding, and adherence to regulatory guidelines.
Auditors assess the documentation related to purchased diagnostic testing to ensure it aligns with the services billed. This includes verifying the medical necessity of the test and confirming that the results are appropriately documented in the patient’s medical record.
The auditing process involves carefully reviewing the codes assigned to purchased diagnostic testing. Auditors check for consistency with established coding guidelines and evaluate whether the codes accurately represent the services provided.
Healthcare providers must adhere to various regulations and guidelines when conducting and billing for diagnostic testing. Auditors ensure that the claims comply with these regulatory standards to prevent issues such as fraud or overbilling.
In the intricate landscape of healthcare, effective claim reporting and auditing for purchased diagnostic testing are indispensable for maintaining transparency, accuracy, and compliance. Healthcare providers are pivotal in ensuring that claims accurately reflect the services rendered, leading to fair compensation and high-quality patient care. Regular audits serve as a valuable tool for identifying and rectifying discrepancies, fostering a robust and accountable healthcare system.
Christine Hall, CHC, CDEO, CPC, CPB, CPMA, CRC< CEMC, CPC-I
CEO and Senior Consultant at Stirling Global Solutions LLC, A healthcare compliance firm
Source: CMS Payment to Physician or Other Supplier for Diagnostic Tests Subject to the Anti-Markup Payment Limitation – JA6733 https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/JA6733.pdf
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