How Labs Can Avoid Problems When It Comes to Standing Orders

Most of the improper Medicare payments for laboratory services identified by the Comprehensive Error Rate Testing (CERT) Program are due to insufficient documentation, i.e., because something is missing from the medical records. Common examples include lack of documentation supporting:

• The intent to order the service, such as a signed progress note, office visit note, or physician order; and/or
• The medical necessity of ordered services.

Use of “standing orders” has long been problematic for purposes of compliance with documentation requirements. Part of the problem is due to lack of clarity about what a standing order is. However, new Centers for Medicare & Medicaid Services (CMS) guidance sheds some needed light on this vexing question.

The CMS Guidance

The new CMS guidance is in the form of a Medicare Learning Network (MLN) FACT SHEET called “Complying with Laboratory Services Documentation Requirements,” which includes cautionary references to standing orders.

Only medically necessary services ordered and rendered, including those based on treatment protocols, are considered for reimbursement when documentation supports the orders and/or protocols are individualized to each patient. Labs that order diagnostic services for Medicare patients must also maintain documentation of the order (including standing orders and protocols) or intent to order and medical necessity of the services in the patient’s medical record, according to the guidance. They must keep this information available and submit it, along with the test results, upon request for a Medicare claim review, the guidance explains.

A laboratory “standing order” relates to a test or a series of tests that are ordered by an authorized caregiver. These tests will be repeated at established intervals for a fixed period of time. Standing order(s) are typically employed during a patient’s extended course of treatment. The diagnostic information consistently supports the medical necessity of the testing throughout the utilization of the standing order.

Standing orders may be misinterpreted. “Providers should be aware of the various meanings of the term ‘standing orders,’” the guidance cautions. Some understand the term to mean recurring orders specific to the care of an individual patient. Others interpret it as routine orders for services delivered to a population of patients. It’s important that standing orders be used with caution to provide recurring orders for medically justified services specific to the care of an individual patient.

Avoiding Claims Denials

Noridian Healthcare Solutions, a company that provides claims and provider management solutions to healthcare programs, has previously received notice of errors from the CERT for laboratory claims that have standing orders that are over 12 months old. In some cases, specifically for end-stage renal disease (ESRD) beneficiaries, standing orders submitted for review were over 12 months old. Noridian states:

“When the laboratory service(s) is initially ordered, medical necessity is established; therefore, at the time of the initial order, the beneficiary's medical records must include documentation indicating the service is reasonable and necessary as well.”

Along with information justifying the initial provision of the service(s), Noridian says that there must be clinical information in the beneficiary's medical record to support that the laboratory service continues to remain reasonable and necessary. For the claim (date of service) under review, information used to justify continued medical need must be timely.

According to Noridian, timely documentation for laboratory service standing orders is a medical record in the preceding 12 months. “Providers may wish to set a reminder to renew such orders on or about 12 months from the previous order.”

In addition, Noridian clarifies that standing orders should include:

• Patient name;
• Ordering caregiver;
• Test(s) ordered;
• Interval between testing (frequency);
• ICD-10 diagnosis code(s);
• Physician phone number; and
• Fax number for providing results.

OIG Compliance Recommendations for Standing Orders Use

The U.S. Department of Health and Human Services Office of Inspector General (OIG) has also weighed in on lab reliance on standing orders in its Compliance Guidelines for Laboratories. According to the OIG, while standing orders aren’t prohibited for extended treatment, “too often in the past they have led to fraudulent and abusive practices.” The OIG says labs must be vigilant and take appropriate steps to prevent abuse. “Thus, while laboratory compliance plans can permit the use of standing orders executed in connection with an extended course of treatment, the compliance plan should require the laboratory to monitor existing standing orders to ensure their continuing validity. The OIG recommends that labs:

• Contact all nursing homes from which they’ve received such standing orders and request written confirmation of the validity of all current standing orders;
• Verify standing orders relied upon at draw stations with the physician, physician's office staff, or such other persons authorized by law to order tests who’ve provided the lab standing orders; and
• Contact ESRD facilities that have provided standing orders for their patients at least once a year to request written confirmation of the continued validity of all existing standing orders.

Labs should also adopt a compliance policy for determining which laboratory tests are eligible for standing orders and how those ordered will be tracked and monitored for compliance, the OIG advises. The policy should require that standing orders:

• Be contained in a separate requisition form that specifically relates to standing orders;
• Demonstrate a concise request for services and frequency for testing;
• Provide diagnostic information; and
• Last no longer than one year—the OIG recommends a quarterly review for continued need and accuracy.

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Diana W. Voorhees, M.A., CLS, MT, SH, CLCP, CPCO, is principal in DV & Associates, Inc., Salt Lake City, UT, which makes no representation, guarantee or warranty, expressed or implied, that the information provided is free of error, and will bear no responsibility or liability for results or consequences of its use.