#28: Documenting the Medical Necessity of Lab Testing

January 24, 2020 Current Blog Post

Many toxicology laboratories work with addiction clinics that are cash pay and ILDP is not an exception.  Although this is a great business model, one of the issues all labs run into is billing the insurance of patients who attend cash pay clinics.  All patients being drug tested should be asked if they have any type of health insurance or if their health insurance has changed on each visit.  I realize this sounds like overkill, however as your partner in drug testing, we cannot be reimbursed for our services without the correct insurance information.  It is the practice of many clinics, and was in the clinics I previously owned, to request the insurance card from the patient on every visit to compare it to what the clinic has on file.  Often patients will obtain or change health insurance from one visit to the next.  If they present an insurance card, a copy of the front and back should be made and sent to the lab.  This will ensure the services the provider requested the lab to perform are able to be billed correctly.  In addition, many times insurances being what they are will request medical records/office notes for the particular visit the patient sample was collected. 

Here is where it gets sticky.  Medical documentation is one-way insurances love to deny claims.  Even if your clinic is a cash clinic, laboratories bill insurance, and therefore must comply with insurance requests in order to be reimbursed.  With the amount of fraud that goes on today, insurance companies want proof what they are about to pay for was done and, in their minds, was medically necessary.  Therefore beyond the lab reports, which we supply them with daily, they want to see the documentation of medical necessity for the drug test, from the provider.  According to CMS, the majority of improper payments to laboratories were due to insufficient documentation.  For example, the medical record was missing the documentation to support the intent to order a drug test.  The progress note was not signed by the provider, (they love this one) or no documentation of a signed provider order.  Also, documentation of medical necessity to test the patient was not sufficient.  “Run Labs” or “order drug tests” is not a sufficient note in their world.

All providers have been schooled as to how to document.  Insurances move the goal posts all the time so we miss the field goal long enough for them to make some more dough!!  Did I tell you I greatly dislike insurance companies?  The bottom line, as a lab we play on their field and therefore by their rules.  Anyway you are able to help us we greatly appreciate.  Please document why you are testing the patient and what you are testing for.  As simple as, “Patient is prescribed an opioid so I am ordering a drug test for opioids, illicit and additional drugs that may produce a decrease in respiration if combined with opioids, to ensure compliance and decrease the potential risk of drug interaction.”  Please, please, please get us documentation when we request and rest assured it is not coming from us!   Thank you all for trusting us and sending us your business!!

Lance C Benedict
President/CEO Industry Lab Diagnostic Partners