Laboratory vs Physician Fee Schedule
A new CPT Code has recently been issued for the TearLab osmolarity test used for the diagnosis and management of dry eye disease: “83861 Microfluidic analysis utilizing an integrated collection and analysis device, tear osmolarity”, and will be effective January 1, 2011.
This is an “80000” series code, meaning it is part of the Pathology and Laboratory section of the CPT Code book. As such, this code will be listed under the Clinical Laboratory Fee Schedule by the Centers for Medicare and Medicaid Services (CMS) and private third party payers. Unlike procedures and services within the Physician Fee Schedule, most laboratories perform tests and apply for reimbursement without direct access to the patient.
Because of this, patient co-insurance and deductibles do not apply to services paid under the Clinical Laboratory Fee Schedule so payment to providers are 100% reimbursed with no out-of-pocket cost to the patient – including tests performed at the doctors office or clinic.
For those interested, more information on Medicare reimbursement for laboratory tests can be found in the CMS Manual 100-04, Chapter 16, §30.2 at https://www.cms.gov/Manuals/IOM/itemdetail.asp?itemID=CMS018912.
Testing Two Eyes
We know that dry eye disease is bilateral, but asymmetric. Thus it is necessary to test both eyes and use the higher test, regardless of which eye, for the clinical assessment at the time of testing. The new code recognizes the clinical necessity of testing both eyes, and the CPT descriptor for this code instructs that it should be submitted twice for payment when testing both eyes -“For microfluidic tear osmolarity of both eyes, report 83861 twice”. Unlike many codes in the Physician Fee Schedule, the Laboratory Fee Schedule does not discriminate when testing both eyes if it is clinical necessary, and will pay 100% of the allowable reimbursement for both tests. When testing both the left and right eyes from the same patient always use the “-59” modifier for the second eye tested to indicate that it is a “Separate and Distinct Procedural Service”.
For more information on coding please visit the TearLab website at http://www.tearlab.com/products/doctors/reim/reim-us.htm
How Much Does It Pay
Reimbursement by CMS has been set at $24.01 per eye, effective January 1, 2011. So a bi-lateral exam will pay $48.02 by Medicare, and again with no patient co-insurance or deductible.
Each year, the laboratory fee schedule in total is updated for inflation based on the percentage change in the Consumer Price Index. Once published, changes to individual codes can only occur through Congressional legislation or literally by an “act of Congress”. Thus, although the Laboratory Fee Schedule as a whole may undergo an adjustment annually, these changes are relatively small and any individual test is insulated from major fluctuations or reductions.
For an overview on CMS laboratory fee schedule payment policies visit the CMS website at http://www.cms.gov/ClinicalLabFeeSched/01_overview.asp.
An Institute of Medicine (IOM) report (http://www.nap.edu/catalog/9997.html) indicates that most health plans use Medicare fees in developing their own laboratory fee structure and the reimbursement amounts are dependent on the type of plan:
- Private payer indemnity plan fees are on average 31 percent higher than Medicare fees.
- Private payer Preferred Provider Organizations (PPO) fees are on average 8 percent higher than Medicare fees.
- Private Health Maintenance Organization (HMO) fees are on average 2 percent lower than Medicare fees.
- Medicaid HMO fees are on average 12 percent lower than Medicare fees.
Payment by CMS and most payers is the lesser of either (a) the amount billed, (b) the local fee for a geographic area or (c) a national limit. It is important for the provider to set fees for this test that reflect their operating expenses, clinical experience and payer mix.
Laboratory Regulations and CLIA
As you can see there are many advantages to reimbursement under the laboratory fee schedule. However, under the Clinical Laboratory Improvement Amendments (CLIA), federal regulations require that all facilities, even doctors offices, that perform laboratory tests be certified as a laboratory.
CLIA regulates laboratories based on the level of complexity of the tests they perform, designated by the FDA as Highly Complex, Moderate Complex, or Waiver. Currently the TearLab is categorized as a Moderate Complex test, but FDA is reviewing a submission to reclassify this test to the CLIA Waiver category. Once TearLab receives CLIA Waiver status, all doctors’ offices must apply for a CLIA Waiver certificate to qualify for reimbursement. This is a very simple application that all offices should obtain as soon as possible. Most doctors’ offices can meet CLIA Waiver requirements just by following manufacturers instructions. (your State may have additional requirements and you should check with your State CLIA office for local regulations that may apply).
For more information on how to obtain a CLIA certificate please visit the TearLab website at http://www.tearlab.com/products/doctors/reg/clia.htm.
Conclusion
As most of you know, third party reimbursement can be a challenge fraught with complications. However, in the case of TearLab we are fortunate to have a clear path to fair and equitable compensation for a diagnostic test that can prove invaluable to you and your patients.
Having access to an accurate, sensitive and specific test for dry eye disease provides the eye care practitioner with a valuable tool for disease management; an objective and quantitative assessment to diagnose and monitor therapeutic efficacy that has not been available in the past. Once TearLab is categorized to CLIA Waiver status, this in-office laboratory test can become the cornerstone of a “dry eye practice” allowing efficient and effective disease management, driving billable testing and office visits to assess therapeutic efficacy of the selected treatment plan.
TearLab has drafted a Dry Eye Workflow that can be adopted by the average practitioner, and an economic model that demonstrates the financial opportunity for your practice. For or more information go to http://www.tearlab.com/products/doctors/practice.htm.
