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Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Dark Daily’s List of Anatomic Pathology’s 10 Most Costly Coding Errors Costly Coding Errors

Coding Error #1: Not Insisting on Complete Requisition Forms for Pap Tests

Lab administrators and pathologists often fail to realize how frequently this error results in lost revenue to the laboratory. Incomplete information on the requisition can also impact the clinical service the laboratory provides to the referring physician. It may be timely to do audit current workflow to determine the error rate on Pap smear requisitions. If your lab team doesn’t know the precise number, it is likely to be higher than anyone imagines.

CLIA regulations clearly state that, for Pap smears, laboratories need to indicate “whether the patient had a previous abnormal report, treatment, or biopsy.” Unfortunately, Pap smears are often completed without proper information from the patient’s referring physician and without first documenting the patient’s prior Pap smear results. These costly mistakes can lead to reimbursement disputes and lack of reimbursement from Medicare.

Medicare will reimburse for 3 types of Pap tests:

1) Type 1 is a Pap test that is medically necessary for diagnosis. These tests must be based on qualifying diagnosis (LCD).

2) Type 2 is a high-risk screening Pap test. Medicare will reimburse for high-risk Pap test every year assuming definition criteria are properly met.

3) Type 3 is a low-risk screening Pap test. Medicare will reimburse for low-risk Pap tests every 2 years. If a Pap test is not reimbursable by Medicare, laboratories must have a signed ABN (Advance Beneficiary Notice) and use the proper modifier in order to bill the patient.

An anatomic pathology laboratory’s requisition form for Pap tests should be designed to capture all of the following information:

  • Patient, insurance, and testing information
  • Clinical information and patient history
  • ICD9 code or a narrative description

• Whether the pap test is for diagnostic or screening purposes
• If a screening, whether the Pap test is a high-risk or low-risk screening
• ABN (form R-131-L)

There are several effective secrets to ensure that your laboratory avoids the trap of having incomplete requisition forms for Pap smears. First, monitor requisitions on the front end, in the laboratory. Second, laboratories should keep up with code changes and continually update requisition forms. Third, referring physicians and office staff should be educated as to the importance of the requisition forms so they do their part to fill them out as completely as possible. Finally, a laboratory should never default to an ICD9 code simply because information was not provided by a referring physician. This goes along with our third point – educate the physician, your office staff, and, if necessary, the referring physician’s office staff to let all parties know that incomplete information about patients will not be tolerated!

Dark Daily’s List of Anatomic Pathology’s Most Costly Coding Errors

Coding Error #2: Not Knowing when to Separately Code for Multiple Specimens

This coding tip relates to how specimens are handled and processed in the histology laboratory. AMA procedural terminology states that 2-tissue specimens from the same patient (but separately identified, such as with endoscopic biopsies, skin lesions, etc.) are each appropriately assigned an individual code reflective of the proper level of service. This is a basic element of accurate coding. But it is easily overlooked in situations where multiple samples of the same type, but different areas, of the same patient are given the same code. In this situation, there could be some instances where the codes may be the same, but the specimens should still be kept separate.

Let us consider two cases. In one case, coding was not done properly, causing the samples to be rendered useless. In the other, coding was done properly and diagnosis was possible. In the first case, a sample from the right and left segments of a normal cross-section of a fallopian tube are delivered to the lab. The lab performs tests, inks one of the samples black, and returns them in one container with one label to the doctor who requested the lab work. There is no longer any designation as to which side of the fallopian tube from which the specimens came. Thus, the physician cannot process the lab work and make a proper diagnosis. Now, the invasive procedure and lab work have to be re-done so that the doctor can determine which segment was which and if there was a problem with one or both segments.

In the second case, the lab receives specimens of a left and right tonsil. The lab codes and designates the two samples separately (although with the same code number – 88304). The right tonsil is inked black, and both tonsils are returned to the physician who ordered the tests. A proper diagnosis can be made, no tests need be re-run, and billing the insurance company for lab work goes smoothly due to proper coding.

Perhaps the idea of mixing up specimens as was done in the first case seems unfeasible, but it only takes one coding oversight to end up with specimens mislabeled, combined, or otherwise rendered useless. That is a negative outcome that affects patient care and the pathologists’ relationship with the referring clinician, particularly if new specimens must be collected. The pathology laboratory that pays careful attention to keeping specimens separated – and codes and tests each one properly – can escape embarrassing and costly mistakes.

Anatomic Pathology’s Most Costly Errors in Coding: A Ten-Part Series

Friends and associates of DARK Daily and The Dark Report are always giving us ideas as to how to improve coding and stop costly coding errors before they start. With this accumulation of ideas at hand, DARK Daily brings you a 10-part series entitled “Anatomic Pathology’s Most Costly Coding Errors,” with each daily focusing on a different coding error. We will interrupt this series, as necessary, to bring you late-breaking and important laboratory news.

Before we begin the series, let us pause to consider why coding is so important. Proper coding is the cornerstone for submitting clean claims and getting prompt payment from insurers. Proper coding also improves communication between pathologists and their employees. It also helps strengthen the laboratory’s long term relationship with patients. Ultimately, it results in improved patient care, easier insurance company billing, and fewer lengthy disputes with insurance companies that require resolution.

Let us lead off with basic strategies to improve documentation and coding.

  • All billed services should be medically necessary and clearly documented as such
  • Avoid using confusing acronyms (ex. “TP”)
  • Assign unlisted specimens the code that most closely reflects the physician’s work
  • Be consistent within a group for coding of unlisted specimens
  • Implement an internal system to review coding
  • Conduct report audits at least once per year

We must give credit where credit is due. Our coding tips and coding errors are thanks largely in part to Chappy Manning, RN, CPC, adapted from her presentation at the 2006 Executive War College in Miami, Florida.

On a final note, if you think of coding tips as the series progresses, do not hesitate to email them to Sylvia at We have no problem with expanding the series to more than 10 tips if more useful ideas surface!

Yours Truly,

Robert & Sylvia