Medicare advisory panel takes shape; labs need clarification on billing trip fees.

A newly formed public panel, known as the Medicare Coverage Advisory Committee, will offer recommendations to the Health Care Financing Administration on Medicare coverage issues, namely whether specific medical devices or services are reasonable and medically necessary.

The group is important to lab operators because it will be offering advice on Medicare coverage issues that will affect the lab industry. The new committee's role is advisory, however, and it will not have the same authority it would have if it were to issue binding recommendations.

The panel is slated to have up to 120 members from a variety of health industry backgrounds. In addition to lab industry representatives, members of the committee also will be representing clinical and administrative medicine, biologic and physical sciences, public health administration, and the healthcare economics field.

With that many members, "it may be difficult to get a consensus," says Mark Birenbaum, PhD, administrator for the American Association of Bioanalysts in St. Louis, MO. Both the American Clinical Laboratory Association in Washington, DC, and the AAB have made nominations from their respective groups for membership on the committee.

MCAC's aim is to make the Medicare coverage process more representative and open. By doing so, those with a stake in the process can gain some insight into how coverage issues are selected for consideration and how to gain access to the process.

MCAC will probably begin its work sometime this summer. While it is a bit early to say which specific coverage topics the panel will consider, they will probably be "the more difficult coverage issues," says Joanne Glisson, ACLA's vice president of government affairs. "The run-of-the-mill coverage issues would not be something that would necessarily go to this new advisory committee," she adds.

MCAC also will be attempting to expedite coverage determination on new products that medical device manufacturers would like to sell but find limited markets among the lab and physician communities because these devices lack Medicare reimbursement. "Devices get approved, but that doesn't necessarily mean that they will get Medicare reimbursement," says Glisson.

The new panel is getting organized as the special negotiated rulemaking committee is finishing its work on a proposed rule to set up uniform national coverage policies for certain high-volume lab tests. The two groups have different responsibilities, however. MCAC will be dealing with a much broader agenda than the negotiated rulemaking committee because it will be considering all classes of items or services covered by Medicare.

It's difficult to predict the exact impact of the new panel, says Birenbaum. Nevertheless, he adds: "MCAC is something to watch."

Confusion still abounds on billing trip fees

Lab operators are hoping that HCFA offer more detailed guidance on how to bill for the cost of trips to collect specimens from patients in their homes or in nursing facilities.

"At the present time, lab operators don't know the correct way to do it (billing), and they don't want to submit a bunch of bills and have them all be rejected," says AAB's Birenbaum. As a result, some are not submitting bills for the trips, he adds.

In addition to asking for clarification from HCFA on a number of billing trip questions, labs have written their carriers asking for guidance. While some carriers have issued advice, Birenbaum worries that the carrier position may not be "consistent with HCFA's interpretation."

In July of last year, HCFA told its Medicare carriers to pay for these trips at a flat rate of $7.50 per one-way leg for those averaging less than 20 miles round-trip and to pay the actual mileage at $0.75 per mile for round-trips of 20 miles or more. Before HCFA's July directive, it was up to carriers whether to pay the travel expenses on a mileage basis or a flat rate.

Of particular concern for lab operators is the billing for patients in skilled nursing facilities, says Birenbaum. With a single homebound patient, the details of trip billing are not quite as confusing. But with skilled nursing facilities, you deal with multiple patients, only some of whom are on Medicare. In these situations, the billing is more complex and confusing, he maintains.

With all the emphasis on fraud and abuse, labs are concerned that if they bill incorrectly for these trips, they will be charged with deliberately attempting to abuse the system, he adds.

A recent memo from HCFA attempted to shed some light on the situation by saying that providers always have the option of billing a flat rate, even for trips of 20 miles or more. Nevertheless, the trip fee must always be prorated among Medicare and non-Medicare patients from whom specimens are drawn on the same trip, adding to the complexity.

For lab operators serving nursing facilities in rural areas and making lengthy trips to collect specimens, this new billing policy may provide greater compensation than the old billing arrangement, says Birenbaum.

In the meantime, labs are waiting for more clarification. HCFA needs to make the billing rules "easier" for the lab industry to implement, he adds.