UPDATE to the 14-Day Rule Exception for Outpatient Molecular Tests & Advanced Diagnostic Lab Tests

August 23, 2018

Earlier this year, we posted our white paper, The New Year Rings-In Change to CMS’ “14 Day Rule” for Its Laboratory Date of Service Policy that detailed the criteria required to be exempt from Medicare’s 14 Day Rule for hospital outpatients that receive certain pathology molecular testing and advanced diagnostic lab tests following discharge from the hospital outpatient department.  The list of CPT codes included in the exemption effective January 1, 2018, was included in the article.

To summarize, prior to 2018 the 14 Day Rule prevented reference and independent laboratories from billing Medicare directly for molecular pathology and advanced diagnostic lab tests ordered less than 14 days following an outpatient’s discharge from the hospital.  The lab would have to seek its share of the reimbursement for the testing from the hospital. 

The exemption stated that, for the listed CPT codes, the date of service (DOS) for the test must be the date the test was performed, not the date the specimen was obtained as is the usual policy.  This effectively separates the lab test from the hospital outpatient encounter, meaning the lab that performed the test now bills (and receives payment from) Medicare directly.  The following conditions must be met:

• The physician orders the test following the date of a hospital outpatient’s discharge from the hospital outpatient department
• The specimen was collected from a hospital outpatient, not an inpatient, during an encounter
• 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 test was reasonable and medically necessary for the treatment of an illness

CMS has since added to the list of applicable CPT codes; of note is the addition of some Genomic Sequencing (GSP) and Multianalyte Assays with Algorithmic Analyses (MAAAs) codes.  According to its Laboratory Date of Service Policy webpage, the list of codes will be updated on a quarterly basis – the list of CPT codes from the June 25, 2018 update is included in the below PDF.  Please visit the link to view the HCPCS Proprietary codes included.