CPT Codes and Reimbursement

By Alice S. Weissfeld, PhD, (D)ABMM, Microbiology Specialists Incorporated, Houston, Texas

It is no longer enough to be a clinical virologist. In today’s economic times, a virologist must also be a
businessperson. This involves not only knowing how a test is performed, but how it should be
charged. Phrases like “billing to maximize reimbursement” make government and third-party payers
think fraud. Rather, one must concentrate on billing for the actual work performed under direct orders
from a physician.

Laboratory billing in hospitals is divided up by in-patient versus out-patient testing. In-patient testing is
covered under the DRG (Diagnosis Related Groupings) system. Under DRGs, hospitals are given a
flat amount of money for the most common medical conditions. Each lab test, all medications,
disposable supplies, etc. are charged against the DRG amount. If the patient is discharged prior to
using all the DRG monies, the hospital makes money. If the patient expenses exceed the DRG
amount, the hospital loses money. Each senior citizen upon reaching age 65 qualifies for Medicare
Part A (in-patient hospital services). However, individuals must elect to have Medicare Part B
services which cover out-patient services. Medicare B participants pay a yearly deductible and
monthly charges which are deducted from their Social Security checks. Medicaid carriers and
private third party payers follow the Medicare system although individual payments may be higher or
lower.

Lab tests are billed using a series of five digit codes called CPT (Common Procedural Terminology)
codes. CPT codes are copyrighted by the AMA (American Medical Association) and updates are
published annually at the end of each calendar year. The new year’s codes go into effect April 1st of
each year, so that laboratories have an opportunity to make any necessary changes to their billing
systems. For billing purposes, specific CPT codes are coupled with ICD-9-CM codes. The ICD-9-CM
codes represent the reason that the physician ordered the test; this in turn, establishes medical
necessity. For example, a viral culture (CPT# 87252) might be performed if an individual presents to
the emergency room with meningeal signs and a spinal tap is performed (ICD-9-CM #036.0).

Clinical lab fee schedules are published each year by the Medicare and Medicaid contractors (also
known as carriers). Pricing differs from state to state, so it is important to monitor your Medicare Part
B Newsletter. Again, private third-party payers and Medicaid may reimburse a higher or lower
amount than Medicare, so it is important to know who your contractors are. A critical point is that no
client may receive pricing more favorable than that afforded to Medicare or Medicaid patients. It is
considered fraudulent to overcharge the government and contractors monitor for signs of dishonest
billing practices. The contractors for Medicare and Medicaid are subcontracted to CMS (the Centers
for Medicare and Medicaid Services), formerly HCFA (the Health Care Financing Administration).

The Professional Affairs Committee (PAC) of the Public and Scientific Affairs Board of the American
Society for Microbiology and the CAP Microbiology Resources Committee work closely to ensure that
CPT codes accurately reflect current lab testing techniques. Specific codes are suggested each year
for emerging technologies, including tests such as HCV quantitation by either bDNA or PCR. In
addition, PAC offers a two-day workshop every year at the ASM General Meeting on the ABCs of
Reimbursement, Coding and Compliance and a sunrise breakfast session at the same meeting to
answer public questions in these areas. In addition, PAC members are preparing an ASM Cumitech
on Reimbursement and CPT Coding. The Cumitech will address coding questions regarding
traditional and molecular virology; look for it by fall 2002.