Advanced Beneficiary Notice of Noncoverage (ABN)
Physicians and other individuals authorized by law to order laboratory tests have the authority to order any test(s) which they deem necessary. However, if the test(s) is not covered by Medicare, Medicaid or other federally funded programs, the laboratory may seek payment from the patient.
According to the waiver of liability section of the Medicare Claims Processing Manual, a signed ABN should be obtained from a patient prior to laboratory testing when there is reason to believe payment of the claim may be denied for any of the following reasons: screening, medical necessity (unpayable or no diagnosis provided), frequency, experimental testing, research-only testing or non-FDA approved procedures.
An explanation of the ABN and notification of potential personal financial liability must be given to the patient. The patient should have the option to refuse the services.
Non-Covered Tests
Medicare has determined that some laboratory tests are not medically necessary and, therefore, not covered by the Medicare program. Screening tests, tests that are experimental, for research use only or are non-FDA approved are considered non-covered. In each of these cases, a signed Advanced Beneficiary Notice of Noncoverage (ABN) must be obtained from the patient prior to the collection of the laboratory specimen. Patients will be held responsible for payment of these services.
Diagnosis
According to the Balanced Budge Act of 1997, ordering physicians and other persons authorized by law to order laboratory tests are required to provide the laboratory with a diagnosis for each item or service at the time the item or service is ordered.
It is unlawful for the laboratory to submit a claim to a federally funded program without an ICD-9 Diagnosis Code. The diagnosis, in the form of an ICD-9 code, must represent a diagnosis, sign or symptom to the highest level of specificity.