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California Society of Pathologists
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Sacramento, CA 95814 
Tel : 916-446-6001
Fax :  916-444-7462

Final Fix on Medicare Palmetto Denials on IHC/Flow Cytometry Claims
We previously outlined our dialogue with Palmetto representatives to address problems with pathology payments. The two major areas dealt with IHC/ Flow Cytometry and LCD L282264 on genetic testing. The issues and changes are:
(1) Immunohistochemistry and Flow Cytometry (LCD - L28260) Pathology groups have been getting denials for payment on both of these procedures based upon lack of ICD-9 justification. This LCD policy when implemented by NHIC did not use the ICD-9 justifications as edits correctly recognizing that the CPT codes listed in the LCD, for example 88342 (IHC) are broadly used to evaluate non-neoplastic conditions such as infectious disease processes and the impracticality of developing and maintaining an all inclusive list of ICD-9 codes. It appears that Palmetto has been using this policy with the ICD-9 edit even though the previous LCD was limited to neoplastic conditions and did not use the ICD-9 edits. As a result these claims are being denied even when the claim does not exceed the numerical limit of 10 or 20 respectively and has been occurring since Sept. 2nd transition. We recommended that the ICD-9 edits be removed and that denials be reprocessed without the need to re-submit those claims.
Final Action - The ICD-9 edits on those codes have been removed retroactive to 9/2/08.. This means that only the numerical limit of 10 and 20 respectively for IHC and Flow Cytometry will apply. If you exceed those limits you would need to submit justification and that information would be evaluated to determine if payment is appropriate. Palmetto indicates that they will re-process the previously denied claims. That effort can take time due to the volume of claims and other claim types that are auto re-processed. Pathology groups should expect payments in 30 to 60 days. You have the option of resubmitting the claim.
(2) LCD L28264 on genetic testing - There was no prior policy with NHIC and apparently this LCD was used in Hawaii by Noridian and implemented as part of the J1 conversion without California CAC review. We agree that these tests should not be reimbursed as a screening test. This policy appears to have been established limited to defining specific clinical indications and criteria for only two types of cancers; Hereditary Breast/Ovarian cancer (BRCA1 & BRCA2 tests) and for Hereditary Colorectal Cancer and Polyposis Syndromes (Mismatched gene repair gene tests). 
The LCD references generic laboratory molecular testing CPT procedure codes (83890 through 83912) used to bill for many different molecular PCR assays which include for example rapid diagnosis of infectious diseases, hypercoagulable states, neuromuscular and metabolic disorders that can be further defined with use of genetic testing modifiers (in appendix section of CPT book). For example the modifier for BRCA1 is -0A, -0B and for mismatched repair genes is -0J, -0K, -0L. 
The LCD was set up for coverage of only two common entities with listing of ICD-9's that support medical necessity of only those two and does not define in the LCD genetic testing modifiers.  As you would expect from the limited ICD-9 listing, claims for testing for all other medically necessary PCR testing is being inappropriately denied as failing the ICD-9 edit. The LCD is being misapplied to most molecular testing and, limitations apply.  
Final Action - We have been informed that this LCD policy will be retired as of February 5, 2009.