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Clinical Diagnostic Laboratory Billing for COVID-19 Testing

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We continue to monitor CMS updates for coding and billing information that will assist our client laboratories and other hospital laboratories to stay abreast of COVID-19 coding and billing during this public health emergency (PHE). CMS continues to expand billing and clarification for COVID-19 testing for clinical diagnostic laboratories.

Most recently CMS posted new specimen collection codes for clinical diagnostic laboratories. To identify and reimburse specimen collection for COVID-19 testing, CMS established two Level II HCPCS codes, effective with line item date of service on or after March 1, 2020:

  • G2023 – Specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), any specimen source
  • G2024 – Specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), from an individual in a skilled nursing facility or by a laboratory on behalf of a home health agency, any specimen source

While CMS has not yet published guidance for units reporting, the hospital will generally report one (1) unit for the specimen collection. The CDC recommended collection methods are via nasopharyngeal (NP) (preferred method), oropharyngeal (OP), nasal mid-turbinate (NMT) or anterior nares so if two methods are ordered by the physician and used to obtain specimens, then it would be appropriate to report one unit for each method. CDC does not recommend induction of sputum. CDC does state when clinically indicated (e.g., a patient who is receiving invasive mechanical ventilation) an appropriate specimen via lower respiratory tract aspirate or bronchoalveolar lavage may be performed and tested as lower respiratory tract specimen. Under these methods, specimen collection is inclusive of these procedures and would not be separately reported.

Hospital laboratory and the chargemaster staff will need to quickly collaborate on getting these codes set up in the hospital LIS and in the chargemaster. At this time, CMS has not yet posted any expected payment for COVID-19 testing specimen collection. There is also no precedence for payment for these methods of collection. Currently, CMS pays $17 (estimated national average) under the MPFS (Medicare Physician Fee Schedule) for CPT code 89220 (sputum collection specimen). Hospitals will want to ensure the price set for COVID-19 specimen collection is reasonable and rational.

CMS MLN Connects Special Edition, Tuesday, March 31, 2020, https://www.cms.gov/files/document/mln-connects-special-edition-3-31-2020.pdf

Panacea previously posted information for the new COVID-19 testing codes and we have expanded our guidance to clarify when to use the AMA CPT code 87635 created March 13, 2020 and the CMS HCPCS codes created U0001 and U0002 created February 4, 2020.

For most hospital laboratories codes U0002 and 87635 will likely be used taking into consideration the method for the COVID-19 testing. When the CDC test kit is used, code U0001 will be billed. Hospitals will need to consider the following to ensure the most applicable code is reported to Medicare and commercial payers:

  • COVID-19 detection by DNA or RNA utilizing amplified probe technique will be reported using code 87635 to Medicare and commercial payers. Per AMA coding instruction, if physician orders both nasopharyngeal swab and oropharyngeal swab and both specimens are tested then it is appropriate to report code 87635 x1 unit and 87635-59 x1 unit.
  • COVID-19 detection (non-CDC) by method other than amplified probe technique will be reported using code U0002 for Medicare; however, commercial insurance may not be accepting this code for adjudication. There is currently no CPT code that represents this test so payers may allow code 87999 or indicate to use 87635 since it will alert the payer the testing was specific for COVID-19. Hospitals will need to follow commercial insurers billing requirements.
  • COVID-19 detection using a new market testing method/kit, CMS instructs laboratories that code U0002 is still applicable for use until additional information for coding is warranted. Hospitals will need to follow commercial insurers billing requirements.
  • COVID-19 detection using the CDC test kit will be reported using U0001 for Medicare; however, commercial insurance may not be accepting this code for adjudication. Per the CDC, this code may only be reported by hospital laboratories who use Applied Biosystems 7500 Fast DX Real-time PCR Instrument with SDS 1.4 software. These laboratories will need to follow commercial insurers billing requirements.

Note: Panacea is aware there are manufacturers (Abbott, Cepheid) who have developed rapid testing (may also be referred to as point of care testing) methods for COVID-19 that have been approved by U.S. Food & Drug Administration (FDA) under the Emergency Use Authorization (EAU). At the time of this post, CMS nor AMA have published new codes for these tests. Hospitals following the guidance in the COVID-19 FAQs for diagnostic testing will want to reference question #7 for billing new tests. Likely for these rapid test methods laboratories will use code U0002 when the testing method is not specific to code 87635.

CMS COVID-10 FAQS https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf

AMA Public Health News https://www.ama-assn.org/delivering-care/public-health/new-cpt-code-covid-19-testing-what-you-should-know

AMA CPT Assistant Special Edition https://www.ama-assn.org/system/files/2020-03/cpt-assistant-guide-coronavirus.pdf

CMS Develops Additional Code for Coronavirus Lab Tests https://www.cms.gov/newsroom/press-releases/cms-develops-additional-code-coronavirus-lab-tests