Is Your Lab Billing Medicare Directly for Advanced Diagnostic Lab Tests & Molecular Pathology Tests?

February 1, 2019

In December 2017, the Centers for Medicare and Medicaid (CMS) published Change Request 10419, Transmittal 4000 that finalized an exception to its current laboratory DOS policy for Advanced Diagnostic Laboratory Tests (ADLTs) and molecular pathology tests excluded from the Outpatient Prospective Payment System (OPPS).  Within the conditions specified below, the exception required that the DOS for those particular tests would be the date the test was performed, not the date the specimen was obtained.

1. The test was performed following a hospital outpatient’s discharge from the hospital outpatient department;
2. The specimen was collected from a hospital outpatient during an encounter;
3. It was medically appropriate to have collected the sample from the hospital outpatient during the hospital outpatient encounter;
4. The results of the test do not guide treatment provided during the hospital outpatient encounter; and
5. The test was reasonable and medically necessary for the treatment of an illness.

This DOS exception essentially unbundled payment for the performance of these tests from the hospital’s payment, allowing the performing lab to bill Medicare and be reimbursed for those tests directly.   The exception was effective January 1, 2018, with a required implementation date of July 2, 2018.

On July 3, 2018, due to feedback from providers and suppliers who couldn’t accommodate the DOS exception policy by the July 2, 2018 deadline, CMS announced it would exercise enforcement discretion which allowed an additional six months for performing labs to complete the necessary system changes to come into compliance with the policy.

On December 26, 2018, CMS announced it would extend the enforcement discretion period for an additional six months due to the number of entities who were still not able to implement the necessary system modifications by the January 2, 2019, deadline.

What do you need to do?
CMS directs that “during the enforcement discretion period, labs that are prepared to bill Medicare directly for the ADLTs and molecular pathology tests subject to the laboratory DOS exception should do so and those that are not ready should make every effort to comply with the requirements as soon as possible.  We remind hospitals and performing laboratories that in no case should both the hospital and the performing laboratory bill for the same test for the same beneficiary.”

For additional information on the laboratory DOS exception policy and FAQ’s, visit:

The list of laboratory tests subject to the DOS exception as of January 1, 2019, can be found in the below PDF.