New Payment Rules for Lab Specimen Collection & Travel Allowances

The Centers for Medicare & Medicaid Services (CMS) published the final rule implementing the 2023 Medicare Physician Fee Schedule on Nov. 18. For many labs, the provisions that will have the most direct and immediate impact are the new regulations on payment for specimen collection fees and travel allowances. Here’s a look at what labs need to know about the new rules that take effect on January 1, 2023.¹

The New Laboratory Specimen Collection Fee Regulation

Previously, CMS requirements for billing and payment of specimen collection fees and travel allowances were contained not in the regulations, but the Medicare Claims Processing Manual Pub. 100-04, chapter 16 §§ 60.1-.2. CMS has also issued Medicare transmittals explaining the rules. However, there’s been some inconsistency between the manual and the transmittal guidance. The travel allowance rules were also confusing and out of touch with actual healthcare practices. To address these issues, the final rule includes a new regulation, 42 C.F.R. § 414.523, aka, “Payment for laboratory specimen collection fee and travel allowance.”

The New Specimen Collection Fee Rules

Eligibility: The new regulation doesn’t change the eligibility criteria governing which specimens for clinical lab testing are billable. As before, labs may only bill Medicare for lab test specimens that are:

• Used to perform a Medicare-covered lab test that’s paid under the Part B Clinical Laboratory Fee Schedule (CLFS);
• Collected by a trained technician from a Medicare beneficiary who’s either: i.) homebound; or ii.) a non-hospital inpatient at a facility where no qualified personnel is available to collect the specimen; and
• A blood specimen collected via venipuncture or a urine sample collected by catheterization.

Billing Restrictions: Making clear what was previously only implied, the final rule specifically states that the above are the only circumstances in which Medicare will pay a specimen collection fee. Clearing up confusion caused by inconsistency between Medicare requirements and U.S. Bureau of Labor Statistics definitions, the final rule also explains that “trained technician” for purposes of the second criterion means “staff providing specimen collection services,” including phlebotomists. CMS also says it will stick to its previous policy of paying only one specimen fee per single patient encounter, even if different types or multiple specimens are drawn from the patient.

Rates: CMS initially proposed to keep specimen collection fees at the current rates of $3 per patient or $5 per patient in a skilled nursing facility (SNF) or being serviced by a home health agency (HHA). However, in response to public comments, the agency agreed to revise the rates for inflation. The new rates:

• $8.57 for all specimens collected in a single qualifying patient encounter; and
• $10.57 per beneficiary in an SNF or being serviced by an HHA.

More good news: Starting January 1, 2024, CMS will update the specimen collection fee rate every calendar year by the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the 12 months ending June 30 for the preceding year.

The New Travel Allowance Rules

Eligibility: Under the final rule, Medicare will only pay a travel allowance if the lab technician collects a specimen that qualifies for payment of a specimen collection fee. In other words, the specimen collection must:

• Require a trained technician;
• Be for a Medicare beneficiary who is either homebound or an inpatient at a facility other than a hospital; and
• Be for a lab test that’s covered by Medicare.

Billing Restrictions: Restating previous CMS policy, the final rule bans submitting claims for a travel allowance where the technician acts merely as a messenger to pick up the specimen. In addition, the allowance applies only to “eligible miles” traveled. To calculate “eligible miles,” you begin at the lab or starting point of the technician’s travel for qualifying specimen collection and end at the lab or ending point of the technician’s travel. You may not count miles traveled for any purposes that are not related to qualifying specimen collection, e.g., personal errands or collections from patients who aren’t Medicare beneficiaries.

Rates: The payable travel allowance amount will vary depending on distance traveled and numbers of locations:

Flat Rate: Medicare will pay a flat rate travel rate allowance if the trained technician travels 20 eligible miles or less to and from one location to collect specimens from one or more Medicare beneficiaries. 2023 Flat Rate: $10.40 divided by the number of Medicare beneficiaries who received a qualifying specimen collection.

Per-Mile Rate: Medicare will pay a per-mile travel allowance when a trained technician travels either: (i) more than 20 eligible miles to and from one location for specimen collection from one or more Medicare beneficiaries; or (ii) to more than one location for specimen collection from more than one Medicare beneficiary. 2023 Per Mile Rate: $1.04 per mile multiplied by eligible miles traveled divided by the number of Medicare beneficiaries who received a qualifying specimen collection.

References:

1. https://www.federalregister.gov/documents/2022/11/18/2022-23873/medicare-and-medicaid-programs-cy-2023-payment-policies-under-the-physician-fee-schedule-and-other