CurrentBlue Cross Blue Shield - Rhode IslandPolicy N/A

Hospital Laboratory Pass-Through Billing

Defines BCBSRI's prohibition on hospital pass-through billing for laboratory services and the conditions under which hospitals may bill for outpatient laboratory services; applies to hospitals billing Blue Cross & Blue Shield of Rhode Island.

Policy Summary

PayerBlue Cross Blue Shield - Rhode Island

PolicyHospital Laboratory Pass-Through Billing

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateJan 2, 2020

Next Review DateN/A

Key ActionHospitals must disclose and obtain BCBSRI approval for any management agreement that coordinates, manages, or performs laboratory work before billing for those services.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

0medical criteria applicable

Not applicableprior authorization

Deniedpass-through claims

Registered patientbilling requirement

Dec 2019provider update

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Coverage Criteria

Pass-through billing coverage rules

BCBSRI coverage stance and billing rules for hospital laboratory services and pass-through billing.

BCBSRI prohibits hospital pass-through billing; claims determined to be pass-through billing will be denied as provider liability and not reimbursed by BCBSRI.

To submit a claim to BCBSRI for outpatient laboratory services, the Member must be a registered hospital patient (including hospital outreach/draw sites), and the hospital must retain all medical and administrative records for that encounter; the hospital must be able to attest to medical necessity and maintain the physician/order documentation and other records.

When hospital may bill

Hospital may bill when the patient is present at the hospital or a hospital outreach/draw site and the laboratory services are performed using laboratory equipment located on and owned and/or maintained by the hospital on its campus.
Hospital may bill when the hospital performs the vast majority of the ordered testing on the specimen but lacks the equipment and/or expertise for specialized testing that is processed by a reference lab (e.g., genetic testing).

Hospitals are strictly prohibited from billing for routine testing that is actually performed by another hospital, physician or laboratory; when another laboratory performs the vast majority or entirety of testing, that performing laboratory must bill BCBSRI directly using a CMS 1500 unless BCBSRI approves otherwise.

Hospitals may not receive and refer out laboratory services to any non-participating provider without a written exception agreed to by BCBSRI permitting the hospital to bill for such services.

Benefits may vary by group/contract; refer to the appropriate Benefit Booklet, Evidence of Coverage or Subscriber Agreement for applicable laboratory benefits/coverage.

Coding / Claim Form Requirements

Claim form requirementmixed

CMS 1500

Claim form required for laboratories performing the testing/processing when hospital refers out.

Provider Actions and Billing Responsibilities

Documentation Required

Documentation required to bill

Hospitals must retain complete medical and administrative records for any outpatient laboratory services billed to BCBSRI. Medical records must include, at minimum, the physician or practitioner order and all documentation necessary to substantiate the services provided. The hospital must be able to attest to the medical necessity of the testing and/or treatment. Outpatient laboratory services billed to BCBSRI are required to be performed using laboratory equipment located in and owned and/or maintained by the hospital on its campus, unless an approved exception applies.

Member must be a registered patient of the hospital (including hospital outreach or hospital-owned draw sites) for the laboratory service
Hospitals must retain medical and administrative records for the encounter/service
Records must include the ordering practitioner’s order and documentation to substantiate services
Hospital must be able to attest to medical necessity
Testing billed must be performed using hospital-located, hospital-owned/maintained equipment unless approved otherwise

Definitions

Pass-through billing — definition

DefinitionPass-through billing occurs when a hospital laboratory sends a portion or an entire specimen/sample to another hospital, physician and/or independent laboratory (a reference lab) and that reference lab performs all or a portion of the initial testing ordered.

BCBSRI policy stanceBCBSRI does not permit hospital pass-through billing; claims determined to be pass-through billing will be denied as provider liability and are not reimbursable by BCBSRI.

Related guidanceBCBSRI follows applicable Medicare guidelines related to pass-through and/or client billing in addition to this policy.

Action when uncertainHospitals with questions about applicability should contact their Provider Relations Representative to provide details so BCBSRI can determine adherence to this policy.

Reference lab — definition

Definition

Billing Rule

Billing responsibility when reference lab performs testing

When the performing laboratory (reference or off-site lab) conducts the vast majority or entirety of the testing/processing for a specimen, BCBSRI requires that the laboratory performing the testing bill BCBSRI directly using a CMS-1500 claim form unless BCBSRI has approved an exception in writing. Hospitals may bill for lab services processed by a reference lab only when the hospital performs the vast majority of the ordered testing on the specimen but lacks equipment/expertise for specialized testing (e.g., genetic testing). Hospitals are strictly prohibited from receiving specimens from community providers, independent laboratories, another hospital or their own facility and referring out the vast majority or all testing to another laboratory and then billing BCBSRI for those services. Billing pass-through arrangements are not permitted and such claims will be denied as a provider liability and are not reimbursable by BCBSRI.

Performing laboratory must bill BCBSRI directly when it performs the vast majority or all testing (CMS-1500) unless BCBSRI approval is obtained
Hospital may bill when it performs the vast majority of ordered testing and only sends specialized testing to a reference lab (e.g., genetic testing)
Hospitals may not receive and then refer out specimens for the vast majority or entirety of testing and bill BCBSRI
Pass-through billing to BCBSRI or a member by the hospital is prohibited and will be denied