Medicaid claim submissions for reference laboratory billing

We have received questions regarding Medicaid claim submissions for reference laboratory billing specifically related to the attached Provider Notice. After consultation with Montana Medicaid and review of the relevant Montana Medicaid provider manuals and administrative rules with our legal department, it was determined that outpatient hospitals and critical access hospitals are permitted to bill for reference laboratory services. Physicians and inpatient hospitals are not permitted to bill for these services. Due to the interpretation, MTPHL will no longer be submitting Medicaid claims for outpatient hospitals and critical access hospitals. Additional information on the rule interpretations and definitions are below:

• Outpatient & Critical Access Hospitals
  • The Hospital Outpatient Services Manual and Critical Access Hospitals Manual provide in relevant part:
    • Reference Laboratory Services - Outpatient Hospital and Critical Access Hospital (CAH) Billing for Laboratory Services
      • Montana Healthcare Programs allows Outpatient Hospitals and Critical Access Hospitals (CAH) to bill for reference laboratory services. If the Outpatient Hospital or CAH refers laboratory services to any outside laboratory and outpatient hospital or CAH bills Montana Healthcare Programs for those laboratory services, the outpatient hospital or CAH must use modifier 90 to indicate reference laboratory services. It is the responsibility of the hospital or CAH to ensure the reference laboratory meets the Clinical Laboratory Improvement (CLIA) certification criteria for the type and laboratory services performed. In addition, be sure that the CLIA certificate is in effect for the date of service laboratory tests are performed. If not, Montana Health Programs is entitled to recover reimbursement made for the reference laboratory services.
    • Labs provided to members residing in a Psychiatric Residential Treatment Facility (PRTF).
      • There are instances when laboratory work related to treating the psychiatric condition is included in the bundled per diem rate for in-state PRTFs (ARM 37.87.1223(3)(d). In those instances, the laboratory services provided by the hospital is not able to be separately billed. The hospital would need to work with the PRTF and/or Children’s Mental Health Bureau.
    • State Laboratory billing
      • In order for the State Laboratory to appropriately bill Montana Healthcare Programs, providers must indicate Montana Healthcare Program eligibility and include the members ID on the MTPHL Medicaid Claim Submission Form. For questions about Medicaid claim submission requirements, please contact Michaela Olmstead @ (406)444-7400 or Michaela.Olmstead@mt.gov
• Inpatient Hospitals
  • The Hospital Inpatient Services Manual does not explicitly address billing for reference laboratory services. Research has not located any other source of authority explicitly authorizing billing by
    Inpatient Hospitals for reference laboratory services. At this time, billing by Inpatient Hospitals for these services is not permitted.
• Physicians
  • The Physician-Related Services Manual provides in relevant part:
    • Medicaid does not cover reference lab services. Providers may bill Medicaid only for those lab services they have performed themselves. Modifier 90, used to indicate reference lab services, is not covered by Medicaid.

ARM 37.86.3001, provides definitions relating to outpatient hospital services.