Beginning around 2014, CMS bundled all laboratory tests in the hospital outpatient setting (including hospital outpatient academic clinics and hospital ER's) - unless the tests were "molecular pathology" tests. CMS did not define "molecular pathology" tests in regulation, but has very clearly applied this to mean human DNA RNA tests (and not DNA RNA microbiology tests).*
Basically, CMS assigns claims processing status indicators to all lab codes in the outpatient file known as "Appendix B."
The claims status code for human genomics, and COVID microbiology testing, is "A". This is separately payable as a line item from the lab fee schedule in the hospital outpatient and ER setting.
Otherwise, the lab test is "Q4" which means conditionally bundled. It's bundled if there's something to bundle it to, like an outpatient visit or ER visit.
The two-protein Alzheimer amyloid test 0346U is classified as "Q4" bundled. That's the signifier I would expect. But, this is a problem because CMS data shows that most spinal taps for CSF are in hospital outpatient settings. This is an LDT test from Quest, not the FDA-cleared Fujirebio test.
Several pathogen molecular tests 0351U, 52U, 53U, 54U, are all "Q4" for bundled in the hospital outpatient setting. OK, I can roll with that. They're molecular, but not human molecular.
Then there's "E1" which means CMS has deemed the lab test is "not covered by any benefit category, statutorily excluded." See a list of all status indicators here.
New Change Release Mostly Correct, Sometimes Perplexing
So on September 9, 2022, CMS released CR12885, updates for hospital outpatient policy for October 1, 2022. Table 3 (PDF page 25) lists two dozen new PLA codes. Most are easy to understand based on the above rules. For example, 0332U, which is 8 DNA markers related to cancer checkpoint therapy, is "A," a separately payable human DNA test.
But out of the two dozen new PLA codes, several perplexed me.
- 0333U is a liver test, surveillance for high risk patients for liver carcinoma, with human cfDNA plus a couple proteins also. This is "Q4" bundled.
- This surprised me because I thought, if a test includes human DNA (even with proteins added) it was "A" unbundled. I'm pretty darn sure that I had been working from prior examples of this.
- 0337U and 0338U are oncology proteomic tests, so no surprise they are "Q4" bundled.
- 0342U is a pancreatic cancer immunoassay test, which is not classified as "Q4," merely bundled, but rather with "E1" which is "not payable at all." I can't tell why.
- 0343U is prostate cancer test, of human RNAs, which should definitely be category "A" but is also categorized as "E1" which is "not payable at all." It's from MiR Scientific.
- There were 521 "A" codes (payable in APC's, most pathology codes live here).
- There were 64 B codes ("not recognized by OPPS"). These were mostly drug screening codes.
- 28 codes were E1 ("not payable by statute.")
- Here, CMS puts codes with "screening" in the name (like 0091U), but I can't understand how 0221U (CARIS big DNA RNA test) lands here, and I'm a little puzzled by 342U and 343U.
- These are the E1 codes, click to enlarge, and the summary of the code name is my own shorthand.
- One code is "M" (not payable, I believe it because it is a "report," 88291),
- 23 are "N" (not payable, mostly CPT add-on codes),
- 104 are Q1, 23 Q2, 1188 Q4 (most all clin chem & microbio is Q4, conditionally bundled if here is something to bundle them to, like a procedure or office visit).
- 1 is status S. 86927, plasma fresh frozen, which is an oddly placed code and pays via APC 5672.
*The actual rules stem from the definition of bundled hospital services in one regulation, and the complex 14 day rule in another regulation.
Pretty bizarrely, 42 CFR 419.22(l) [el] excludes clinical diagnostic laboratory tests from payment under the APC system (bundling).
Except as provided by 419.2(b)(17), which does the opposite and bundles most lab tests as packaged costs in the APC system (!!!!!). That's a cause for whiplash.
And - Further details of the bundling and unbundling occur as a result of the date of service rule aka 14 day rule. 42 CFR 414.510. For example, this sets a separate date of service for "molecular pathology" tests.