CurrentMolina HealthcarePolicy N/A

Packaging of Laboratory Services (OPPS/Q4)

Defines Molina Healthcare's reimbursement stance on when outpatient laboratory tests are packaged with primary procedures under OPPS and when they are separately payable; applies to providers submitting claims to Molina (Medicare outpatient hospital context referenced).

Policy Summary

PayerMolina Healthcare

PolicyPackaging of Laboratory Services (OPPS/Q4)

Policy CodePolicy N/A

Change TypeNo material clinical or coverage changes (template/links updates)

Effective Date11/20/2020

Next Review DateN/A

Key ActionSubmit lab-only services on appropriate bill types (0140-014Z, 0120-012Z or CLFS for 0130-013Z) to ensure separate payment and avoid denials.

SourceLink

POLICY UPDATE CHANGES

New Policy established with effective date 11/20/2020.

Links updated and definitions table added on 10/19/2022.

Verified links and updated template on 08/16/2023.

Q4Status indicator

2014CMS lab packaging year

2016Q4 implemented

2020Molina policy effective

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When Laboratory Services Are Packaged vs Separately Payable

Lab packaging and separate payment criteria

Covered when the following conditions distinguish packaged versus separately payable outpatient laboratory services under Molina's interpretation of OPPS/CMS rules:

ALL of the following

Lab is packaged when provided on the same date of service as the primary service AND ordered by the same practitioner who ordered the primary service.
Not packaged (separately payable) when ANY of the following apply:
- The laboratory test is the only service provided to the Medicare beneficiary on the date of service (lab-only).
- The laboratory test is performed on the same date as the primary service but is ordered for a different purpose than the primary service AND is ordered by a different practitioner than the practitioner who ordered the primary service (clinically unrelated).
Conditionally packaged (status indicator Q4) laboratory codes will be paid separately when submitted as lab-only claims per CLFS or appropriate bill types; otherwise they will be packaged and denied if billed with non-lab services or if separate-payable criteria are not met.
When reporting separately payable lab-only services, use Bill Type 0140-014Z (Outpatient hospital-other) or 0120-012Z (Hospital Inpatient Part B). Bill Type 0130-013Z may be processed under CLFS for lab-only services as identified by Q4.

OPPS Status Indicators and Billing Types

OPPS status indicatorsmixed

Q4	Status indicator for conditionally packaged laboratory services

Bill types for separate payment

Bill types for separately payable packaged servicesBill Type 0140-014Z (Outpatient hospital - other) or Bill Type 0120-012Z (Hospital Inpatient Part B) must be used when laboratory services meet separately payable criteria.

Bill type for CLFS when lab-only in outpatient hospitalBill Type 0130-013Z may be used for lab-only outpatient hospital claims so conditionally packaged Q4 codes can be paid under the Clinical Laboratory Fee Schedule (CLFS).

Packaging remains when duplicate original bill presentPackaged or conditionally packaged lab services reported with Bill Type 0120-012Z that also have Condition Code W2 (Duplicate of original bill) present will remain packaged and will be denied.

Claims Submission and Denial Risk

Billing Rule

Submit lab-only claims on appropriate bill types; avoid bundling

Submit lab-only services on bill types that allow separate payment (e.g., Bill Type 0140-014Z or 0120-012Z) when the laboratory test is the only service on the date of service or otherwise meets separately payable criteria; do not bundle lab-only services with a primary service when the lab was ordered by a different practitioner or for a different purpose.

Use Bill Type 0140-014Z (Outpatient hospital-other) or 0120-012Z (Hospital Inpatient Part B) for separately payable lab services.
When lab-only claims appear on outpatient hospital Bill Type 0130-013Z, conditional packaging rules (Q4) may allow payment under the CLFS.
Do not bundle when the lab is the only service on the date of service or when ordered by a different practitioner for a different purpose.

Denial Risk

Denial risk if separately payable criteria or bill type are not met

Packaged or conditionally packaged laboratory services that do not meet the separately payable criteria (lab-only, clinically unrelated, or proper bill type) will be denied.

Conditionally packaged (Q4) lab codes billed with any non-lab services will be denied.
Packaged/conditional lab services reported on Bill Type 0120-012Z with Condition Code W2 (duplicate) remain packaged and will be denied.
Ensure separately payable criteria are met and correct bill type used to avoid denial.

Key Terms

Unconditionally packaged services

DefinitionUnconditionally packaged services are services for which separate payment is never made because payment for the service is always packaged into the payment for other services (identified in OPPS Addendum B with status indicator 'N').

Payment treatmentThese services are always included in the payment for an associated primary service and never paid separately.

Source identificationUnconditionally packaged services are identified by status indicator N in OPPS Addendum B.

Conditional Packaging

DefinitionConditional Packaging indicates an item or service is not separately paid when it is integral, supportive, dependent, or adjunctive to an associated primary service; it is separately payable when provided as a primary service.

Q4 status indicatorCMS implemented status indicator Q4 (conditionally packaged laboratory services) to identify lab codes that are subject to conditional packaging and may be paid separately when they are the only service rendered or are clinically unrelated.

When separate payment may be allowedSeparate payment may be allowed when the lab is the only service performed on the date of service (lab-only), or when reported with clinically unrelated services or when appropriately billed on CLFS bill types (e.g., 0130-013Z) as described by CMS.

Denial riskPackaged or conditionally packaged laboratory services that do not meet separately payable criteria will be denied.

Policy Changes and Verification

2023-08-16revisedLatest

Verified links and updated template (documentation history shows 'Verified Links- TP' and 'Updated Template').

2022-10-19revised

Links updated and definitions table added.

2020-11-20added

Policy established (New Policy effective date).