Those ICD-9 codes will get your labs paid under APGs

By Lois Yoder, ART, CCS

Vice President of Product Development

Medical Learning

St. Paul, MN

Question: How do we justify billing a payer for ancillary testing under ambulatory patient groups (APGs)? Is a physician’s signature on the order usually sufficient?

Answer: A physician’s signature is not sufficient to warrant payment under APGs. However, the signature does serve to validate the need for an X-ray or pathology exam if validation is ever required by a payer. Therefore, a physician’s signature should accompany any order for ancillary testing.

There are two circumstances involving ancillary services that figure prominently in justifying a claim under APGs. They are:

Testing that is performed in conjunction with a significant procedure.

Ancillary testing that is performed in conjunction with a significant procedure such as an ambulatory surgery normally will be the significant procedure APG. For example, a tissue collection and subsequent pathology analysis of a polypoid specimen performed in conjunction with a colonoscopy would be bundled into the colono-scopy payment. It would not be paid separately.

The presence of the polyp would be coded using the appropriate ICD-9-CM diagnosis code to report the site and type of polyp identified by the pathologist. The presence of the code then would serve to justify the performance of the ancillary test.

Payers usually are aware that certain tests are conducted prior to a surgical procedure. Program logic embedded in the payer’s APG software routinely recognizes these services based on the HCPCS, CPT-4, and ICD-9-CM codes to justify their payment under their own APGs.

You run into trouble performing routine pre-op tests such as complete blood counts or chemistry panels. These routine services cannot be justified even if performed on the day of a significant procedure if there is no relevant diagnosis code linking them to the procedure.

However, if the patient has a documented and coded chronic condition such as anemia or potassium deficiency, it is quite likely that the routine pre-op would be justified and payable. But here again, the condition has to be documented and coded.

Ancillary testing as the primary reason for a scheduled visit.

The second circumstance occurs when the ancillary testing is the principal reason for the patient visit. The best justification here is one based on documented medical necessity. As in the previous case, furnishing the payer with an applicable ICD-9-CM diagnosis code for each clinical test ordered increases the likelihood of payment.

The only exception would be if the test is deemed a non-covered service. Non-covered services vary for different reasons among payers. Therefore, providers should be careful to determine from the payer which ancillary procedures are not covered under the benefit plan. Maintain an open line of communication with a plan representative.

Watch for changing guidelines

Many private insurers are adopting federal Medicare reporting guidelines in defining what constitutes certain covered ancillary tests and medical visits. These guidelines are periodically updated and changed by the Health Care Financing Administration in Baltimore.

Yet they represent the basis for which an increasing number of commercial payers are distinguishing between covered and non-covered services even under APGs. Providers should check with their payers regularly on these updates.

Ultimately, the diagnosis information plays a key role in justifying the billing for ancillaries. One way to ensure that the applicable diagnosis information accompanies the order for services is to use a standardized referral form. The form should be designed to include: patient demographics, insurance information, and indications for procedures or tests ordered. A standard form also increases the probability that the physician will take the time to sign the order before it goes to the lab or pathology.