New lab standards may cut documentation mistakes

The Health Care Financing Administration and a variety of physician advocacy groups hammered out a tentative agreement to revise Medicare's confusing tangle of rules regarding clinical diagnostic laboratory tests. While no one's claiming the new regulations will be perfect, most experts say that standardization at least should help physicians reduce the risk of inadvertent mistakes.

"The problem has been that different fiscal intermediaries and carriers have different coverage policies for different lab tests that had different medical necessity criteria," says Sue Prophet, RRA, CCS, director of classifications and coding at the American Health Information Management Association in Chicago, and a member of the committee that revised the rules. "That got to be very frustrating - especially if you were in an area that might have to deal with more than one carrier or fiscal intermediary."

What was worse, it became almost impossible for some providers to keep up with individual carriers' changes to their coverage policies, says Brett Baker, regulatory affairs associate at the Washington, DC-based American College of Physicians-American Society of Internal Medicine. Baker also served on the rulemaking committee. "When a policy was changed, the change would be published [by itself] in a subsequent bulletin," he says. "Realistically, it was difficult for practices to go back to the original policy, incorporate the change and keep it all straight."

Another problem with the old rules was that, with most carriers, the medical necessity criteria weren't developed with the involvement of coding professionals. "There was no one to say, 'That's not how this type of encounter would be coded,'" Prophet says.

The new rules, which HCFA will work into a proposed draft to be published in the Federal Register before summer, eliminate local variation in coverage policies by establishing a set of 22 national policies. "We also made them much more consistent with the coding rules and guidelines, so that people can code correctly and still have patients with legitimate laboratory encounters being appropriately covered," Prophet explains. The new standardization should also benefit practices that are attempting to develop internal compliance policies, Baker adds.

That's not to say that the long process of revising the policies always went smoothly. "There were a lot of tense moments," says Rob Tenet, assistant to the senior VP at Englewood, CO-based Medical Group Management Association. "Not everybody was always on the same page — especially HCFA," Tenet says. "It's hard to say if they had an agenda going into the negotiations, but the end result is something that folks are pretty happy with. It's not too onerous for practices."

Even so, some concerns remain, particularly with regard to the amount of paperwork required of physician practices attempting to remain in compliance with the new policies. Some practices almost certainly will have their hands full, Baker says. "In some areas, there's going to be an increase in the number of policies that physicians will encounter," he says. "If you only had seven local policies before, now it's going to be 22 national policies that you have to contend with."