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Reminder: Improper Documentation of Laboratory Services Could Result in Denial of Payment for Services

Posted October 31, 2017

The Blue Cross and Blue Shield of Illinois (BCBSIL) Special Investigations Department (SID) would like to remind independently contracted providers that in order to assist in prompt payment of claims and to help ensure payment integrity, BCBSIL requires laboratory services to be properly documented. Incomplete or illegible medical records may result in a reduction in or no payment for services. In order for BCBSIL to process a claim and for BCBSIL benefits to be applied, there must be sufficient documentation in the provider's or hospital's records to verify the services performed were medically necessary and required the level of care billed. Request for payment for the services may be denied if there is insufficient documentation. Additionally, if there is insufficient documentation for the claims that have already been adjudicated by BCBSIL, reimbursement may be considered an overpayment and the funds may be recovered. 

Laboratory claims for BCBSIL members should be submitted through the Blue Plan where any samples were obtained, usually where the testing facility is situated. Each laboratory claim should have valid laboratory medical records documenting the services ordered and the results of the services performed. Laboratory medical records consist of a signed valid requisition and complete results of the tests performed. A valid requisition is one received from the patient’s treating physician or qualified health care provider (i.e., the provider treating the patient and who will use the test results in the management of the patient’s specific medical problem). Records should be complete, legible and include the following: 

Requisition

  • Complete patient identification
  • Complete ordering provider identification [at a minimum, full name and National Provider Identifier (NPI)]
  • Signature of ordering physician (must be legible; “Signature on File,” signature stamp or photocopies of signature are not acceptable)
  • Facility and location where sample was collected is relevant [e.g., office, home, hospital, Residential Treatment Center (RTC); also include state (such as Illinois)]
  • Type of sample (e.g., blood, serum, urine, oral swab)
  • Date and time collected
  • Date and time received in the lab
  • Identity of individual who collected sample
  • For urine testing, a temperature at time of collection may be relevant and aid in validity
  • ICD-10-CM diagnosis codes received from ordering provider (specificity required)
  • Identify specific tests ordered (avoid “Custom” panels)
  • For drug testing, a current medication list may be relevant and aid in supporting medical necessity
  • For drug testing Point of Care (POC) test results may be relevant and aid in supporting medical necessity

Providers are reminded to refer to BCBSIL’s Urine Drug Testing Policy MED207.154. In addition, it is useful to recall that Medicare will only pay for tests that are medically reasonable and necessary based on the clinical condition of each individual patient. Confirmation of drug screening is only indicated when the result of the drug screen is different than suggested by the patient’s medical history, clinical presentation, or the patient’s own statement. Medicare makes this statement to reinforce that the ordering provider is cautioned that the justification for the need for testing is required. 

Laboratory Results Documentation

  • Complete identification of performing entity (name, address, Clinical Laboratory Improvement Amendments (CLIA) number)
  • Identity of patient (full name, date of birth)
  • Identity of ordering provider (name, NPI number)
  • Identity of facility, if applicable
  • Date sample was collected
  • Date sample was received in lab
  • Date test results were reported
  • Complete test results including validity testing if performed

Although BCBSIL does not require a laboratory provider to recover and submit medical records from an ordering provider, it should be noted that it is the billing provider’s responsibility to be able to substantiate the medical necessity of the laboratory services billed. If necessary, BCBSIL will request records from an ordering provider to substantiate and provide supporting information during a laboratory claim audit/review. Insufficient or a lack of supporting information may result in denial of the laboratory claim. For more information, see the BCBSIL’s Urine Drug Testing Policy MED207.154 by visiting the Medical Policy section for the most up-to-date medical policy information.

Medicare auditors similarly require a billing provider to assume responsibility for obtaining supporting documentation as needed from a referring physician’s office. For more information, see the Medicare Program Integrity Manual  on the Centers for Medicare & Medicaid Services (CMS) website.

It is the responsibility of the ordering provider to document in a patient’s medical record the support required to determine the medical necessity for each service ordered so as to allow BCBSIL to determine if the services are eligible for coverage. The record must be specific to an individual patient and not consist of “standing,” “routine” or “orders per protocol.” Such “one size fits all” ordering will not support the necessity for testing and may result in a payment denial for the laboratory service.

Familiarity with health care plan medical policies regarding laboratory testing may help prevent unexpected claim denials. Orders alone do not ensure reimbursement. Medical policies, benefits, eligibility, and medical record documentation are the determining factors for reimbursement.

Laboratories also should be mindful of requests for testing received from inpatient and intensive outpatient behavioral health facilities as laboratory services are included in per diem rates paid to the entities and should not be “unbundled” and submitted for separate claim reimbursement. In those instances, separate reimbursement for laboratory services may be denied or disallowed as payment is included in the ordering provider’s per diem payment.

BCBSIL’s Medical Policies may be found by visiting our Medical Policy section. Medicare Local and National coverage documents may be found online by searching Medicare’s public website. Individual benefit/coverage information may be found by calling the Customer Service number on the member’s BCBSIL ID card.

For additional information related to HMO Illinois®, Blue Advantage HMOSM, Blue Precision HMOSM, BlueCare DirectSM and Blue FocusCareSM, the provider should refer to the BCBSIL HMO Provider Manual, located in our Standards and Requirements section.