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Medical Coding Concepts For Laboratory

There are several complexities and challenges in laboratory CPT codes and pathology CPT codes that are primarily reported to evaluate specimens obtained from patients (body fluids, cytological specimens, or tissue specimens obtained by invasive/surgical procedures) in order to help physicians make insightful clinical decisions.

The information obtained by lab tests is combined with the history and examination findings, and other data, which helps physicians to analyze the information background upon which medical decision-making is established.

Several lab tests are commonly called “blood tests”, however, labs collect specimens from different bodily fluids. There are different medical codes to specify the lab tests performed on different body tissues and fluids.

Therefore, lab coding specialists should understand the intricacies of lab and pathology ICD-10, CPT, and HCPCS codes rolled out for particular lab procedures.

In this article, you’ll learn about the latest medical coding guidelines and updated medical codes. If you want to get such updates regularly in your feedbox then stay tuned with CureCloudMD to get insights into innovative healthcare IT and revenue cycle management solutions for all specialties across the medical field.

Here are the updated medical codes for laboratories that became effective as of 2023.

CPT Coding Guidelines for Laboratories

The new guidelines for CPT® 2023 features new codes, 93 revised codes, and 75 deleted codes. Also, there are new guidelines introduced for the application of updated CPT lab medical billing codes for every procedure except anesthesia. The most significant changes are to the evaluation and management (E/M), percutaneous pulmonary artery revascularization, hernia repairs, lab and pathology, and COVID-19 vaccination codes.

Also, there are 2 new appendices for artificial intelligence (AI) taxonomy (Appendix S) and synchronous real-time interactive audio-only telemedicine services (Appendix T).

Here are the major highlights to changes by section, all of which became effective as of 1 Jan 2023.

Here are the major highlights to changes by section, all of which became effective as of 1 Jan 2023.

CPT Codes

Current Procedural Terminology (CPT®) codes provide a uniform nomenclature for translating medical procedures and diagnostic services into standard & billable medical codes.

Medical CPT codes are essential to streamline reporting and ensure accuracy and efficiency of the lab billing procedure. Also, applying accurate CPT coding practices smooths out your administration operations such as claims processing and developing guides.

Why CPT Codes Are Used For Lab Tests?

Laboratory CPT codes and pathology CPT codes are used to represent the lab tests and diagnostic procedures used to evaluate the specimens collected from the patient by invasive/ surgical techniques to provide information to the healthcare for the treatment of that patient.

As mentioned earlier, information obtained from lab tests is critical to decision-making in healthcare facilities like clinics, hospitals, and other medical organizations. However, labs only get 30% of the revenue as compared to the finances of healthcare facilities.

If medical labs apply incorrect CPT codes then it can lead to claim denials/ rejections causing a reduction in reimbursements and inefficiency in revenue growth. Therefore, in order to prevent payment denial issues healthcare labs should apply accurate and latest medical codes.

Common CPT Codes for Pathology Services

Here are the most common CPT codes used for laboratory billing services in 2024;

88300 to 88332: CPT codes for dermatologists

This CPT code range is used to describe pathology services. However, there are some specific billing rules that are particularly designated to dermatologists for pathology.

  • No Billing For Pathology Services:
  • When a dermatologist sends a tissue specimen to an outside reference lab who is responsible to perform technical and professional services (referred to as the global service) and they send bills to the insurance company directly (without referring to any third-party) then there is no “pass-through” billing (which means that the dermatology practice has bought these services from the pathology lab at a discounted price).

    Simply put, the dermatology practice has marked up the cost of the service, and then passed the increased charges on to the patient or insurance company through direct billing on the behalf of their practice.

  • Pass-Through Billing:
  • Another way a dermatology practice can charge for pathology lab tests is through Pass-through billing. In this case, the dermatologist earns money by buying the technical component, or both.

    The practice marks up the cost of the purchased service and passes the excessive charges on to the patient’s insurance company by billing the pathology service(s) directly to the payer.

    Some insurance companies are now establishing new policies that don’t allow healthcare providers to pass through their bills.

    For example, Medicare doesn’t allow pass-through billing for any healthcare lab or medical facility at all.

    Here are the most common CPT codes for some dermatopathology procedures;

  1. 88304: Level III
  2. Introduced by the American Medical Association, this CPT code is used under the range of surgical pathology procedures.

    This medical codes is used to describe surgical pathology, gross and microscopic examination for the pathology tests in the following procedures;

    • Abcess
    • Anus, Tag
    • Pilonidal Cyst
    • Bartholin’s Gland/Cyst
    • Cartilage
    • Shavings
    • Conjuctiva-biopsy/Pterygium
    • Pilonidal Cyst, Sinus
    • Skin, Cyst/Tag/Debridement
    • Soft Tissue, Debridement
    • Soft Tissue, Lipoma
    • Vein, Varicosity
  3. 88305: Level IV
  4. This medical code is used to describe level IV surgical, pathology, gross and microscopic examination. When a lab technician or pathologists examines multiple, separate tissue samples on the same date of service.

    • Surgical pathology, gross and microscopic examination include;
    • Lip, Biopsy/Wedge Resection.
    • Skin, other than Cyst/Tag/Debridement,
    • Soft tissue
    • Other than Tummour/Mass/Lipoma/Debridement
    • Tongue Biopsy.

    The Modifier Technical Component (TC):

    This modifier refers to the technical component of the pathology procedures that are involved in the preparation of the slide. Usually, lab technicians perform these pathology procedures.

  5. 88304 Level III:
  6. It is used to describe level III pathology services like hematoma, anus, and abscess in the medical records.

  7. 88305:
  8. This modifier is used for level IV of pathology or any microscopic examination. For example, skin, lips, tongue, etc.

Newly Added CPT Codes 2023

Following are the newly added CPT codes became effective as of January 2023

Medical codes Procedure
81170, 81162, 81218, 81219, 81272, 81273, 81276, 81311, 81314 Genome, gene-specific, and molecular pathology procedures.
81280, 81282 Analyses of long QT syndrome gene
81412, 81432, 81433, 81434, 81437, 81438, 81442 Different Molecular Multianalyte Assays and procedures for genomic sequencing
80081 Obstetric panel examination, including testing for HIV
81228, 81229, 81405, 81406 Analyses of Cytogenomic microarray
81490, 81493, 81525, 81528, 81535, +81536, 81538, 81540, 81545, 81595, 0009M, 0010M MAAAs that have Multianalyte Assays

Revised CPT Codes

Following CPT codes are revised for the lab procedures;

Medical codes Procedure
81435, 81436, 81445, 81450, 81455: Different Molecular Multianalyte Assays and Procedures for Genomic Sequencing
87301, 87305, 87320, 87324, 87327, 87328, 87329, 87332, 87335, 87336, 87337, 87338, 87339, 87340, 87341, 87350, 87380, 87385, 87389, 87390, 87391, 87400, 87420, 87425, 87427, 87430, 87449, 87450, 87451, 87502, +87503 Microbiology
88346 Surgical Pathology
81210, 81275, 81355, 81401, 81402, 81403, 81404, 81405, 81406 Molecular Pathology
82542, 83789 Chemistry
88346 Surgical Pathology
86708, 86709 Immunology

The laboratory medical coding specialist should apply accurate medical codes and modifiers at the highest level of specificity of the lab procedure. There are atleast 9 different modifiers that must be considered during the preparation of medical codes.

General CPT Changes

As discussed earlier, it is critical to include modifiers along with CPT codes to fully describe a medical procedure. It will help lab billing specialists to represent any necessary specific entails of the lab test which will help healthcare labs to get paid for their services the right way. Also, medical billers should mention appropriate quantities in the days/ units fields to clearly describe when the lab services are delivered to the patient.

There are also “Documentation” modifiers that are billed in the first modifier field.

Modifier "-91" indicates repeat clinical diagnostic laboratory test.

Modifier "-LR" indicates round trip travel.

Modifier "-90" Referred Laboratory Services (refer to C)

General ICD-10 Changes

However, when you’re reporting or billing the charges for diagnostic services deleivered to the patient then you must use ICD-10 codes. The ICD-10 codes should also be used to the highest level of specificity, describing the primary condition in the first position in Item 21 on Form CMS-1500 or the electronic equivalent.

If ICD-10 codes are not accurately then and not meeting the digital level completeness criteria will not get paid by the insurance company and end up getting denied as unprocessable.

It is clearly comprehensible that any diagnosis information provided to the insurance company must have medical justification for the procedure (in patient’s health record). If the diagnostic procedure is not justified medically to the insurance pauers then it will result in a retroactive denial under Section 1862(a)(1)(A).

Avoid Invalid Clinical Laboratory Improvement Act (CLIA)

CLIA numbers are essential for laboratory billing services to receive reimbursements for CLIA covered procedures. CLIA is a federal program, State Agencies (SAs) which is responsible to supervise and maintain CLIA laboratories’ certification records.

However, there are some states who also have their own laboratory laws that are exclusive from the CLIA regulations. Therefore, you should also check out the state-specific billing regulations along with the coverage plan available in your state.

The 10-digital CLIA certification number must be placed in Item 23 of the CMS-1500 form or the electronic equivalent.

In case of breaching CLIA certification, following penalties can create challenges for the healthcare labs by imposing suspension, limitation or revocation of any type of CLIA certificate.

You can read out the complete legislative limitations of the CLIA certification from the following link;

Medical Coding Guidelines For Laboratory

A healthcare lab plays a critical role in the field of medicine. However, there are different varieties in iterations, size, and nature (associated with a hospital/ independent) of the medical labs.

There are several healthcare labs operating in the USA around hospitals or other medical facilities, supporting them to ensure the well being of the patients and the community overall.

While hospital labs generate only 3% to 5% of hospital revenue, but the information they deliver makes up 70% to 8-% of patient’s electronic health record (EHR). Did you know? The CDC estimated that almost 70% of doctor’s medical decisions are critically dependent upon the findings of lab tests.

Which sheds a light on the fact that healthcare labs should also be well-equipped with sufficient resources to help medical facilties in their tasks to their fullest potential. For that purpose, healthcare labs also require a significant amount of capital investment to deliver satisfactory services to the patient.

Therefore, healthcare labs should opt for spot-on healthcare revenue cycle management (RCM) solutions to improve their finances and revenue growth.

Here are the proven guidelines for streamline laboratory billing services that’ll help you smooth out the billing procedure, minimize claim denials, and improve your finances.

5 Proven Tips For Laboratory Billing Services In 2024

  • Collect and validate complete patient’s demographic information (name, address, email, phone number, insurance ID, and employment)
  • Never miss out on the verification of patient’s coverage plan eligibility criteria and prior authorization.
  • Apply accurate CPT, ICD-10 & HCPCs codes under accurate modifiers.
  • Keep track of the deadlines of each insurance company and submit your medical claims on time.
  • Always have claim denial management solutions at your back.

The only way you can ensure the best performance of your lab healthcare revenue cycle management is to outsource laboratory billing services to a professional medical billing company.

Did you know? According to a recent survey, 70% of healthcare professionals outsource laboratory billing services to third-party medical billing companies.

A professional lab billing company can add value to your practice by providing the following solutions;

  1. You can get professional insights into the loopholes and challenges of your entire medical billing and coding procedure.
  2. Professional medical billing and coding experts will be guiding and upgrading your office staff to adopt latest medical codes and billing practices.
  3. A medical billing company provides a full-fledged team of well-trained lab medical billers and coders so you won’t have to hire and recruit more resources in your office anymore.
  4. Reduce your cost overheads and increase your savings for an added boost of business productivity.
  5. Leverage maximum availability of the laboratory billing and coding specialists to fulfill the staffing needs of your practice.

Looking for a reliable laboratory billing company to reach your revenue goals? CureCloudMD is a HIPAA-compliant medical billing company that has been helping several lab professionals with a complete range of healthcare RCM and medical billing outsourcing solutions.