Effective Date: December 8, 2008

Implementation Date: December 8, 2008

Medicare carrier jurisdictional rules for purchased diagnostic tests/interpretations were changed in April 2005 to allow suppliers to bill their local carriers for diagnostic test/interpretation services (and receive the correct payment amount) regardless of the location where the services were performed. In addition, because all purchased diagnostic services are paid under the Medicare physician fee schedule (MPFS), the diagnostic services are subject to the same payment rules as all other services paid under the MPFS, as well as to the jurisdictional rules for that fee schedule.

Only laboratories, physicians, and independent diagnostic testing facilities (IDTF) may bill for purchased tests and interpretations.

A claim development issue sometimes arises when there is no indication whether the service was purchased, and the Centers for Medicare & Medicaid Services (CMS) has found that claims have been returned as unprocessable needlessly due to the fact that the biller did not indicate whether the technical component (TC) of a diagnostic service had been purchased. CMS has also found over time that if there was no indication in Block 20 on the claim Form CMS-1500, or line level PS1 segment on the electronic claim, it was likely that the service had not been purchased. Therefore, CMS is issuing change request (CR) 6122 to decrease the volume of claims returned to physicians and suppliers.

Here is the link to the MLN Matters article MM6122 .