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May 29, 2015   



Bill on HIV Screening in Hospitals


AB 521 (Nazarian) would require that all patients in a hospital ER be asked to consent to HIV screening and have the results provided before they leave the facility. The CSP was joined by the hospital association and others in opposing this expensive, impractical, and difficult to implement new requirement. Though a laudable goal to screen more patients for HIV it is not common practice and would be particularly burdensome in the ER environment. Amendments included following the USPSTF recommendations on testing and would exempt anyone under the age of 12 or an individual who has offered and declined the test within the prior 12 months. It also allowed the facility to contact the patient via telephone on a negative result after they have left the hospital and consistent with state law if the test is positive.


AB 521 passed the Assembly Health Committee but was placed on the suspense file in the Assembly Appropriations Committee several weeks ago due to the increased state costs via the Medi-Cal program for the HIV testing reimbursement. Yesterday the bill passed out of the Appropriations Committee but only after a significant amendment was made. The need to ask for consent to the test now only applies to a patient that is admitted to the hospital and not in the ER. 



Bill on Out of Network Billing in Hospitals and Freestanding Clinical Labs


There have been multiple legislative proposals to attempt to deal with patients in health plans who obtain services from a hospital contracted with the plan but may have hospital based physicians such as pathologists, radiologists, ER, and anesthesiology, who are not contracted, out of network, and bill the patient for services. Current law provides that such a patient can't be balance billed for any emergency services needed to stabilize the patient prior to admission.


AB 533 (Bonta), Chair of the Assembly Health Committee, would attempt to address the issue by limiting the patient's charges or cost sharing in such situations. It would require that the patient pay the non-participating provider at the same cost sharing basis as if the physician were in network, i.e. the same deductible or coinsurance as under their plan. AB 533 would also allow a plan enrollee to voluntarily consent to the use of a non-participating provider if they are notified 24 hours in advance, provided a cost estimate, and consent in writing. The out of network physician in either the hospital or freestanding clinical lab would be prohibited from balance billing the patient.


Pathology joins other HBPs and the CMA in opposing the bill since it would effectively allow health plans to set the reimbursement rates for non-contracted physicians and groups. Assemblyman Bonta understands the need for balance on this issue and after the bill passed the Assembly Health Committee he continued to work with all stakeholders in trying to determine an equitable solution.


The bill was amended recently to include an Independent Dispute Resolution Process (IDRP) where physicians could have a binding process with the plan over appropriate payment for out of network reimbursement. There is a similar mechanism within the Department of Managed Health Care over fee disputes but it is voluntary not mandatory and has not been used. Though an IDRP could be helpful and the bill does allow a provider to aggregate claims under one appeal it would be an expensive and time consuming process for physician groups. The bill would also need provisions requiring plans to provide an interim payment to the physician.


AB 533 was also amended to include language attempting to establish a requirement that plans pay an "appropriate" amount to non-contracting out of network providers. It suggests the Medicare rate plus an additional percentage above that, but has no specific percentage. If this were the ultimate approach it is also clear that the Medicare plus X percent would not be the same for all hospital based specialties. The physician community has argued for a payment based upon charge data, but the author and consumer/ patient advocacy groups sponsoring the bill have argued against charge based solution. Obviously the plans have also argued against that benchmark.


The CSP continues internal discussion and with the stakeholders on the provisions of AB 533. The bill will likely move to the Senate next week and the discussions will continue prior to hearings in the Senate.



Medi-Cal Change in Use of Billing Modifiers
Effective 8/1/15


Last year we alerted you to a possible change by Medi-Cal to do away with the ZS modifier on radiology claims to indicate a global charge. Though eliminating the unique ZS modifier was a great idea DHCS also would have required that that global charges then be broken into two claim lines, PC and TC. The CSP submitted numerous comments in opposition to the two line process. DHCS recently published the final policy with an effective date of August 1, 2015. It eliminates the ZS modifier and a global charge would contain no modifier. Here is a copy of the notice;


Upcoming Changes: HIPAA Code Conversion for Local Modifier ZS


An article that published in the April 2015 Medi-Cal Update announced that the effective date for the discontinuation of local modifier ZS would be July 1, 2015. Local modifier ZS designates both the professional (26) and technical (TC) components of a split-billable procedure on a claim or Treatment Authorization Request (TAR). However, in order to allow sufficient time for providers to make the necessary changes, the effective date for this policy is now August 1, 2015.


Effective for dates of service on or after August 1, 2015, the Department of Health Care Services (DHCS) is discontinuing local modifier ZS. Modifier ZS designates both the professional (26) and technical (TC) components of a split-billable procedure on a claim or Treatment Authorization Request (TAR). When billing for both the professional and technical components, a modifier is neither required nor allowed. This change is to continue HIPAA compliance efforts and to align with the Centers for Medicare & Medicaid Services (CMS) guidelines.


Discontinuing local modifier ZS will affect claims and TARs for all split-billable procedures except for Magnetic Resonance Imaging (MRI), Magnetic Resonance Angiography (MRA) and Positron Emission Tomography (PET) procedures. See the relevant sections of the provider manual for details pertaining to the use of modifiers for MRI, MRA and PET procedures.



Effective for dates of service on or after August 1, 2015, providers who previously submitted claims or TARs for split-billable procedures using local modifier ZS are instructed to submit claims and TARs without a modifier.


Claim Completion

Except for MRI, MRA or PET procedures, providers will be instructed to use one of the following methods when submitting a claim for both the professional and technical components of split-billable procedures. See the relevant sections of the provider manual for details pertaining to the use of modifiers for MRI, MRA and PET procedures.


Physician Billing: The physician bills for both the professional and technical components and then reimburses the facility for the technical component, according to their mutual agreements.

The physician submits a CMS-1500 claim form with the procedure code on one claim line without a modifier in the Procedures, Services or Supplies/Modifier field (Box 24D).

Facility Billing: The facility bills for both the technical and professional components and then reimburses the physician for the professional component, according to their mutual agreements.

The facility submits a UB-04 claim form with the procedure code on one claim line without a modifier in the HCPCS/Rate/HIPPS Code field (Box 44).




Medi-Cal Lab Payment Reductions


We have previously informed you of the last minute budget reform in 2012 that called for DHCS to collect payment data from clinical labs and create a new rate methodology. It required a 10% rate reduction in 2012 while DHCS engaged stakeholders, like the CSP, on developing a data collection model that required labs to report their five largest payers payment data for some 380 procedures and the lowest payment amounts. The stakeholder discussions extended intermittently over several years and were productive in narrowing the data submission, i.e. only global payments, lab had to receive at least $100,00 per year in Medi-Cal payments etc.


There had been no response from DHCS on the status of the new rate methodology after labs submitted data in 2013 that represented payments received in 2011. In early December 2014 stakeholders were invited to attend a meeting where the new methodology was unveiled. The CSP and other members of the lab community were dismayed that DHCS announced a number of surprises. First they indicated that after they compute the weighted average of the lowest payments for each procedure they intend to reduce those payment levels by an additional 10% and make that 10% reduction retroactive to 2012. All the stakeholders had assumed that the 10% reduction implemented in 2012 would go away once the new rates were established and certainly not that an additional 10% would be taken.


We have lobbied the Legislative Budget Subcommittees and the Administration to not follow through on this 10% retroactive claw back. The issue is part of the Budget Conference Committee that will begin its work on the 2015-16 state budget and send it to the Governor by June 15th. The Administration has been unsympathetic to restoration of the 10% provider rate cut or eliminating any of the retroactive claw backs for providers. There are several of them pending in addition to the clinical labs. DHCS just posted the notice pasted below indicating their intent to begin recouping these payments. We will keep pressing the issue and inform you of further details on our success and the DHCS timetable if it moves forward.

Laboratory Services Undergo Reimbursement Reduction


In accordance with Assembly Bill 1494 (Chapter 28, Statutes 2012), the Medi-Cal reimbursement rates for clinical laboratory and laboratory services have been reduced by 10 percent effective retroactively for dates of service on or after July 1, 2012. This reduction will continue until the Centers for Medicare and Medicaid Services (CMS) approves a new rate-setting method.


All pathology codes with the exception of CPT-4 code 88720 (bilirubin, total, transcutaneous), a transcutaneous service, are subject to the AB 1494 reimbursement reduction. The AB 1494 reduction is in addition to the Assembly Bill 97 (Chapter 3, Statutes 2011) reimbursement reduction.


Services exempt from the AB 1494 reimbursement reduction are as follows:

    • Designated by aid code 8H
      • Family Planning, Access, Care and Treatment (Family PACT) Program
      • State-only family planning
    • Community outpatient hospital
    • County hospital outpatient


An Erroneous Payment Correction for dates of service on or after July 1, 2012, will be implemented.




California Society of Pathologists
One Capitol Mall Suite 800
Sacramento, CA 95814 
Tel : 916-446-6001
Fax :  916-444-7462

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