Guidelines For Ordering Laboratory Tests
Medical Necessity
Limited Coverage Tests
Advance Beneficiary Notice
Standing Order Policy
Compliance Limited Coverage Tests

Medicare has designated many commonly ordered tests (e.g. cholesterol, glucose, Prothrombin Time) as Limited Coverage Tests. The Centers for Medicare & Medicaid Services (CMS) have developed National Coverage Determinations (NCD) that govern which diagnoses are considered "reasonable and necessary". Local Medicare contractors have developed additional policies that govern which diagnoses are considered "reasonable and necessary" for their area. These policies are referred to as Limited Coverage Determinations (LCD). NCDs and LCDs have been developed based on review of pertinent medical literature, practice guidelines, peer review organizations' review criteria, outside consultants, medical practitioners and data on provider utilization.

When an NCD or LCD exist for a laboratory test, Medicare contractors will only reimburse facilities where their criteria for test performance is met (appropriate diagnostic information {in the form of an ICD-9 code} is provided).

If the diagnostic is criteria not met but the test is still desired, an Advance Beneficiary Notice (ABN) must be completed and signed by the patient. An ABN notifies the patient that s/he is responsible for payment of the ordered service. At the time of presentation of the ABN the patient has to ask the ordering physician the value of the test so s/he can decide if the test should be performed and s/he will pay for it.

Medicare does not cover all services. Screening laboratory tests in the absence of signs, symptoms or established diagnosis are typically not covered. When these tests are ordered the medical facility will not be reimbursed for the service and will bill the patient for the service. In this instance an ABN is not necessary. However, notifying the patient that s/he will be billed for the service is recommended.

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