Initial Development of Laboratory Fee Schedules (Rev. 1, 10-01-03)

by  Jared Staheli
July 9th, 2015

Initially, each carrier established the fee schedules on a carrier-wide basis (not to exceed a statewide basis). If a carrier’s area includes more than one State, the carrier established a separate fee schedule for each State. The carrier determined the fee schedule amount based on prevailing charges for laboratory billings by physicians and independent laboratories billing the carrier. Carriers set the fees at 60 percent of prevailing charges. FIs used the same fee schedules to pay outpatient hospital laboratory services. They set the fee at 62 percent of carrier prevailing charges. Subsequently, except for sole community hospitals, which continue to be paid at the 62 percent rate, FIs changed payments to hospital laboratories to the “60 percent fee schedule.”

In 1994, CMS took over the annual update and distribution of clinical laboratory fee schedules. The CMS updates the fee schedule amounts annually to reflect changes in the Consumer Price Index (CPI) for all Urban Consumers (U.S. city average), or as otherwise specified by legislation.

Effective for hospital outpatient tests furnished by a hospital on or after April 1, 1988, to receive the 62 percent fee the hospital must be a sole community hospital. Otherwise, the fee is the “60 percent fee schedule.” If a hospital is uncertain whether it meets the qualifications of a sole community hospital it can seek assistance from the FI or the RO.

For tests to hospital nonpatients, the fee is 60 percent of the carrier prevailing charge. If a hospital laboratory acts as an independent laboratory, i.e., performs tests for persons who are nonhospital patients; or if the hospital laboratory is not a qualified hospital laboratory, the services are reimbursed using the 60 percent fee schedule or the adjusted fee schedule, as appropriate.

See §10.1 for the definition of a hospital outpatient.


Initial Development of Laboratory Fee Schedules (Rev. 1, 10-01-03). (2015, July 9). Find-A-Code Articles. Retrieved from

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