How to Ensure Proper Documentation for Billing Laboratory Services

An old adage states that “if it isn’t documented, it didn’t happen.” Medical laboratory professionals live by this concept. But what do lab professionals need to do to ensure sufficient documentation for billing clinical laboratory and pathology services?

The Centers for Medicare & Medicaid Services’ (CMS’s) Comprehensive Error Rate Testing (CERT) program indicates that most improper laboratory payments identified during audits “are due to insufficient documentation,” meaning that “something is missing” from the patient’s medical record. Documentation must support the intent to order a service.¹ Examples of such required documentation include signed progress notes, a signed office visit note, or a signed physician order. Documentation must also support the medical necessity of ordered services.

A December 2020 Medicare Learning Network (MLN) article offers the following guidance for documentation requirements:¹

• The physician treating the patient must order all diagnostic laboratory tests for a “specific medical problem” and must note in the patient’s record how the findings were used to select a diagnosis and treatment plan. The physician must use these diagnostic test results to manage the patient’s condition and “may provide a consultation.”
• Tests that aren’t ordered by the treating physician aren’t viewed as “reasonable and necessary.”
• The physician should clearly indicate all tests to be performed when completing progress notes. Instructions such as “run labs” or “check blood” by themselves don’t support intent to order or identify the specific tests ordered.

In addition, providers need to have certain documents on hand if medical review contractors request them. Such documentation includes information in a patient’s medical record that supports medical necessity for ordering lab and other services “per Medicare regulations and applicable Local Coverage Determinations (LCDs).” According to the MLN article, such information includes lab results, physician order or intent to order, progress notes or office notes, and an attestation or signature log for illegible signatures.

Laboratory Results

Lab reports should also be filed in the patient record. It is a great habit when the treating physician circles any abnormal results as it helps prioritize and address any abnormal results in the diagnosis and treatment plan.

In general, laboratory reports should include:

• The lab’s name, address, and contact information, including phone/fax numbers
• Patient name, identification number, and demographic information
• Name of physician or practitioner ordering the test
• Date and time of specimen collection, date and time of receipt, and type of specimen
• Date and time of report
• Tests or procedures performed
• Results and comparison to normal values
• Reason for an unsatisfactory specimen, if applicable
• Interpretation of results, if appropriate

Requisition

The Office of Inspector General (OIG) of the Department of Health and Human Services Compliance Guidelines for Clinical Laboratories indicate in their model compliance plan that labs should standardize their noncustomized test offerings and “use common, uniform requisition forms” that highlight doctor choice and encourage physicians to order only medically necessary tests for each patient.^2,3

Per the compliance plan, all requisition formats must include a printed statement declaring the purpose of ordering Medicare-reimbursed tests as exclusively diagnostic: Diagnostic codes for each of these tests must be also mentioned. DV & Associates, Inc. recommends placing the statement near the top of the form or in the test selection area. Our other recommendations include:

• The Balanced Budget Act of 1996 indicates that physicians should provide diagnostic information with orders at the time of rendering an order. An ICD-10 code is preferred but a narrative with diagnostic information will suffice. Converting a narrative to a code for reporting purposes can cause compliance issues; accuracy is required.
• The form needs to offer enough space to include multiple ICD codes.
• A few laboratories are still including space for an ABN (Advance Beneficiary Notice), but this approach is an unacceptable substitution for the ABN process.
• Some requisitions that we have reviewed included preprinted ICD-10 codes that would allow coverage. As explained in a previous G2 Intelligence article, it’s recommended that labs eliminate ICD codes from requisitions as doctors/providers may unknowingly select a coverage-incurring code that may or may not apply to the patient’s condition.⁴

Physicians are required to order chemistry tests individually, unless under special circumstances listed in the OIG guidelines. These include tests that are part of a series or “clinically relevant test grouping”—including organ or disease profiles or panels—defined by Current Procedural Terminology. Tests that are part of a custom profile ordered by a doctor are another exception:³

• It is appropriate to define the components of panels. Transparency is expected and providers must be able to select only the components that are medically necessary; including checkboxes in the requisition form is one way to ensure this. A requisition should allow “conscious ordering.”²
• If space is insufficient to allow a listing of panel components, the back of a paper requisition may be used

Electronic ordering carries the same requirements as paper requisitions. The Negotiated Rulemaking segment of the Health Insurance Portability and Accountability Act (HIPAA) may add further tips, such as utilizing a minimum of a 10-point font. DV & Associates offers these additional tips:

• In the billing information section, add checkboxes to identify if the services are inpatient, hospital non-patient, or hospital outpatient orders. This may alert a laboratory when testing should be billed to the ordering facility versus insurance.
• Eliminate any reference to standing orders on requisitions. There should be a separate form for this type of order if necessary. Read this G2 Intelligence article to learn more about the use of standing orders.⁵
• Do not place procedural codes on requisitions. If/when the coding is erroneous or changes, a paper requisition could be misleading and reprinting it could add to costs. Procedural codes are more appropriate to include in a services list on a website with a disclaimer.

Medicare Signature Requirements

If a laboratory receives orders for diagnostic services for Medicare patients, the laboratory must also maintain documentation of such orders (including standing orders and protocols), or the intent to order and medical necessity of the services in the patient’s medical record. This information must be submitted upon request for a Medicare claim review. While a signature isn’t required on the physician order, the physician must clearly document in the medical record their intent to have a test performed.

The MLN article further advises that:¹

• “Unsigned physician orders or unsigned requisitions alone don’t support physician intent to order.
• Physicians should sign all orders for diagnostic services to avoid potential denials.
• If the signature is missing on a progress note, which supports intent, the ordering physician must complete an attestation statement and submit it with the response. For an example of a signature attestation statement, visit the CERT Provider website.⁶
• If the signature is illegible, an attestation statement or signature log is acceptable.
• Attestation statements are unacceptable for unsigned physician orders or requisitions.”

There are many documentation requirements related to additional laboratory functions, however, the above tips and guidelines should address immediate concerns regarding the laboratory ordering process. As the MLN article highlights, cooperation between labs and ordering and referring providers is also important to avoid claim denials and billing and coding errors.

References:

1. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/ProviderComplianceLabServices-Fact-Sheet-ICN909221.pdf
2. https://oig.hhs.gov/documents/compliance-guidance/806/cpglab.pdf
3. https://oig.hhs.gov/documents/compliance-guidance/965/cpcl.html
4. https://www.g2intelligence.com/six-lab-sales-and-marketing-compliance-problem-areas-and-how-to-address-them/
5. https://www.g2intelligence.com/how-labs-can-avoid-problems-when-it-comes-to-standing-orders/
6. https://c3hub.certrc.cms.gov/

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Diana W. Voorhees, MA, MLS(ASCP)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.