Hospital Billing Under Part B (Rev. 3014, Effective: Upon Implementation of ICD-10)

by  Jared Staheli
July 9th, 2015

Hospital laboratories, billing for either outpatient or non-patient claims, bill the A/B MAC (A).

Neither deductible nor coinsurance applies to laboratory tests paid under the fee schedule.

Hospitals must follow requirements for submission of the ASC X12 837 institutional claim or the hardcopy Form CMS-1450. (See Chapter 25 for a description of the data set, and for requirements for the paper form. See the ASC X12 837 implementation guide for billing requirements for the electronic claim,).

When the hospital obtains laboratory tests for outpatients under arrangements with clinical laboratories or other hospital laboratories, only the hospital can bill for the arranged services.

As discussed in section 30.3 (“Place of Service Variation, Critical Access Hospitals”) of this chapter, when the CAH bills a 14X bill type as a non-patient laboratory specimen, it is paid on the clinical laboratory fee schedule. For CAHs, payment for clinical diagnostic laboratory tests is made at 101 percent of reasonable cost only if the beneficiary is an outpatient of the CAH (85X TOB), as defined in 42 CFR 410.2, and is physically present in the CAH at the time the specimen is collected, for dates of service prior to July 1, 2009. However, for dates of service on or after July 1, 2009, the beneficiary does not have to be physically present in the CAH at the time the specimen is collected as long as certain criteria are met, per Section 148 of the MIPPA (i.e. other outpatient services are received by the beneficiary in the CAH on the same day the specimen is collected, or the specimen is collected by an employee of the CAH or of a facility provider-based to the CAH) (see Section 30.3 above, Critical Access Hospital). Clinical diagnostic laboratory tests performed for a beneficiary who is not physically present at the CAH when the specimen is collected, by a non-CAH employee or who are not receiving other outpatient services in the CAH on the same day the specimen is collected, are paid are paid for under the clinical lab fee schedule. Similarly, for Maryland waiver hospitals, the waiver is limited to services to inpatients and registered outpatients as defined in 42 CFR 410.2. Therefore payment for non-patients (specimen only, TOB 14X) who are not registered outpatients at the time of specimen collection will be made on the clinical diagnostic laboratory fee schedule.

Section 416 of the Medicare Prescription, Drug, Improvement, and Modernization Act (MMA) of 2003 also eliminates the application of the clinical laboratory fee schedule for hospital outpatient laboratory testing by a hospital laboratory with fewer than 50 beds in a qualified rural area for cost reporting periods beginning during the 2-year period beginning on July 1, 2004. Payment for these hospital outpatient laboratory tests will be reasonable costs without coinsurance and deductibles during the applicable time period. A qualified rural area is one with a population density in the lowest quartile of all rural county populations.

The reasonable costs are determined using the ratio of costs to charges for the laboratory cost center multiplied by the PS&R’s billed charges for outpatient laboratory services for cost reporting periods beginning on or after July 1, 2004 but before July 1, 2006.

In determining whether clinical laboratory services are furnished as part of outpatient services of a hospital, the same rules that are used to determine whether clinical laboratory services are furnished as an outpatient critical access hospital service will apply.


Hospital Billing Under Part B (Rev. 3014, Effective: Upon Implementation of ICD-10). (2015, July 9). Find-A-Code Articles. Retrieved from

© InnoviHealth Systems Inc

Article Tags  (click on a tag to see related articles)

Publish this Article on your Website, Blog or Newsletter

This article is available for publishing on websites, blogs, and newsletters. The article must be published in its entirety - all links must be active. If you would like to publish this article, please contact us and let us know where you will be publishing it. The easiest way to get the text of the article is to highlight and copy. Or use your browser's "View Source" option to capture the HTML formatted code.

If you would like a specific article written on a medical coding and billing topic, please Contact Us.


innoviHealth Systems, Inc.
62 East 300 North
Spanish Fork, UT 84660
Phone: 801-770-4203 (9-5 Mountain)
free demo
request yours today
for any budget
sign IN
welcome back!

Thank you for choosing Find-A-Code, please Sign In to remove ads.