New Travel Allowance Policy for Labs

New Travel Allowance Policy for Labs

Randy Wiitala, MT(ASCP)

Billing the Medicare program for a travel allowance has been a confusing issue to laboratory directors for a long time. The Health Care Financing Administration (HCFA) recently updated its Medicare policy regarding this, and the revision provides some welcome guidance on correct billing of multiple patients. The updated policy took effect for services on or after Oct. 1, 1998.

Lab directors who send out technicians to draw blood should review their charges and create or update the facility’s policy so that it complies with Medicare’s new guidelines.

Medicare will pay for a specimen-collection fee and a travel allowance when lab staff travel to nursing home or homebound patients to collect blood. HCFA developed this allowance to pay for travel expenses and personnel salary when, and only when, a venipuncture is performed. (Use CPT code G0001 for the venipuncture.)

If laboratory personnel are sent to pick up blood that someone else has drawn, Medicare does not reimburse for a travel allowance or a venipuncture.

Use the two HCPCS level II codes below to bill Medicare for a travel allowance. Before Oct. 1, 1998, either one of these codes could be reported. Now HCFA has indicated exactly when to assign each.

P9603 Travel allowance one way in connection with medically necessary laboratory specimen collection drawn from homebound or nursing home bound patient; prorated miles actually traveled

P9604 prorated trip charge

Under the current policy, use code P9603 when the average trip is longer than 20 miles (round trip). Payment is 75 cents per mile. To come up with this per-mile rate, HCFA used the federal mileage rate, which is 31 cents per mile, plus an additional 44 cents per mile to cover personnel time.

For example, if one staff member travels 50 miles round trip to draw a blood sample from one Medicare patient, the lab’s total reimbursement would be $37.50 (50 miles x 75 cents per mile) plus $3 for the venipuncture.

For trips that are less than 20 miles round trip, use code P9604. The payment for this code is $7.50 one way. To come up with this, HCFA assumed that it would take 15 minutes to travel 10 miles. HCFA, again, used 31 cents per mile (31 cents x 10 miles = $3.10). For personnel time, an hourly rate of $17.66 was used ($17.66 4 4 [i.e., 15 minutes] = $4.42). Adding these together ($3.10 + $4.42) equals $7.52.

For example, a lab technician travels five miles each way to a patient’s home without making any other stops or pick-ups. Payment would be $15 ($7.50 x 2) plus $3 for the venipuncture.

This is where things get confusing. The above guidelines are straightforward but only if the technician draws one patient’s blood sample per trip. In reality, though, that isn’t what usually happens.

When a lab technician makes multiple stops or draws blood from multiple patients per stop, Medicare prorates the travel allowance. A specimen-collection fee is paid for each patient whose blood is drawn. The examples below may clarify this somewhat.

* Blood is drawn from two homebound patients during one round trip. Patient A is covered by Medicare and lives 25 miles from the laboratory and Patient B, a non-Medicare patient, lives five miles farther. Therefore, because the lab technician traveled a total of 60 miles (round trip), code P9603 would be billed. Although he or she collected blood from two patients, Medicare covered only one. Therefore, the lab would bill Medicare for only half of the miles traveled. This would calculate to $22.50 (75 cents x 30 miles) in addition to the $3 venipuncture.

* A technician draws the blood of five different homebound patients, four of whom are covered by Medicare and one who is not. The total round trip is less than 20 miles, so code P9604 would be billed. The flat rate of $7.50 would be charged six times (five stops and the return to the lab) to equal $45. However, each claim would be for $9 because the total of $45 must be divided among the five patients visited. Four claims would be submitted to Medicare for $9 each, plus a $3 venipuncture charge for each.

* Three Medicare patients at a nursing home that is two miles from the lab have their blood drawn. The $7.50 flat rate is multiplied by two for the round trip ($15) and then divided by three to equal $5. In this case, you would bill Medicare $5 and use code P9604 for each patient plus a $3 venipuncture charge for each. *

Randy Wiitala is a senior health care consultant at Medical Learning Inc., St. Paul, MN. His laboratory-related expertise includes CPT coding assignment, lab chargemaster and regulatory agency compliance.