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(Editor's note: To submit a question for 'Dear Labby,' email us at khatt@advanceweb.com.)
Q: We struggle with the right way to bill for all the variations in CBC testing. Can you help clarify the rules in this area?
A: One of the highest volume tests - the complete blood count (CBC) -- may also be the source of most billing errors. Where does the confusion come from? Let's take a closer look.
The most common CPT codes reported in conjunction with CBC billing are as follows:
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85025 -- Blood count; complete (CBC), automated (Hgb, Hct, RBC, WBC and platelet count) and automated differential WBC count
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85027-- Blood count; complete (CBC), automated (Hgb, Hct, RBC, WBC and platelet count)
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85007 -- Blood count; blood smear, microscopic examination with manual differential WBC count
 A common source of CBC coding and billing errors actually starts with interpretation of the order itself. For example:
A laboratory receives an order for a CBC. They run a CBC with automated differential and bill CPT 85025. Will this pass the test of an audit?
The answer is no. Unless the order specifically states that a differential is requested -- CBC w/auto diff, CBC w/diff, etc. -- reporting CPT 85025 would be considered an error. The correct code to report in this scenario is CPT 85027. The frequency of improper billing resulting from the misuse of CPT 85025, as illustrated in this scenario, is estimated to be as high as 30 percent by Medicare's Comprehensive Error Rate Testing (CERT).
Confusion around differential billing extends beyond orders. It is common practice for a laboratory to perform a reflexive test from an automated differential to a manual differential when some portion of the result is abnormal. However, Correct Coding Initiative (CCI) edits prohibit billing CPTs 85025 and 85007 on the same date of service, as the automated differential and manual differential are considered duplicative. So what is the correct way to report these services? There are two options; the laboratory must decide to bill for one or the other.
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Option No. 1 -- The CBC with automated differential is reported under CPT 85025 and CMS reimburses a maximum of $10.69. In this scenario, the laboratory does not submit a bill for the manually reviewed portion of the test.
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Option No. 2 -- The laboratory reports both CPTs 85027 ($8.89) and 85007 ($4.73) to capture the CBC (w/o differential) and manual differential.
It should be noted that option No. 2 results in an additional $2.93 per test based upon the January 2013 CMS Clinical Laboratory Fee Schedule limits. However, the reflexive manual differential performed after an abnormal automated differential should be supported by a clinical algorithm, and not abused for the purposes of achieving higher reimbursement.
When you consider the volume of CBC testing performed every day, improper billing can add up to a substantial amount in a small amount of time. Taking care to link orders appropriately to the correct test is a critical step to mitigate potential compliance risk. In this case of the manual differential, it may also yield better reimbursement when the most accurate code set for the services provided can be submitted. CPT Assistant (Jan. 2004, Volume 14) has issued further guidance to support the options outlined above in the event additional documentation is needed to support your laboratory's billing model.
Melissa Scott is a senior consultant in the Reimbursement & Advisory Services Division of Altegra Health.
Editor's note: Melissa Scott offered the following response to a reader inquiry:
Following a response to my March 4, 2013 article pertaining to CBC billing, I would like to offer some clarification regarding the order and medical need of testing. Just to reiterate, an order and documented rationale for medical necessity must be present to bill for any CBC differential - manual or automated. CMS provides the definition of a valid order in Pub 100-02 Medicare Benefit Policy, Section 80.6:
An "order" is a communication from the treating physician/practitioner requesting that a diagnostic test be performed for a beneficiary. The order may conditionally request an additional diagnostic test for a particular beneficiary if the result of the initial diagnostic test ordered yields to a certain value determined by the treating physician/practitioner (e.g., if test X is negative, then perform test Y)...
The conditional request for additional testing referenced above is often referred to as "reflex" testing in a laboratory setting. The Office of Inspector General (OIG) Compliance Program Guidance for Clinical Laboratories has provided additional guidance on appropriate use of reflex testing to support compliant billing practices:
Reflex testing occurs when initial test results are positive or outside normal parameters and indicate that a second related test is medically appropriate. In order to avoid performing unnecessary reflex tests, labs may want to design their requisition form in such a way which would only allow for the reflex test when necessary. Therefore, the condition under which the reflex test will be performed should be clearly indicated on the requisition form. Laboratories may wish to adopt a similar policy for confirmation testing which may be mandatory.
When CMS and OIG guidelines for reflexive testing are followed, there is a specific order from the treating physician to support the performance and billing of the subsequent testing. Reflex testing should not be confused with additional testing performed as a component of a laboratory's internal quality measures, which is not separately billable. NCCI Policy Manual for Medicare Services (Chapter 10 - Pathology / Laboratory Services CPT Codes 80000-89999, Section F - Hematology and Coagulation) states that manual differentials performed as part of laboratory selected flagging criteria for additional verification may not be separately billed. However, it also states it is appropriate to perform and bill an automated hemogram (CPT 85027) and a manual differential (CPT 85007) when supported by a physician order - as would be justified in the case of a reflex test.
As stated in the reader's comment, NCCI guidelines prohibit billing a CBC with automated differential (CPT 85025) and manual differential (CPT 85007). This combination is considered duplicative. As such, this reaffirms that the laboratory would need to submit CPTs 85027 and 85007 in lieu of CPT 85025 if mechanisms are in place to capture the charge for manual differential billing when supported by a physician order.
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