In the ANSI ASC X12N 4010 Implementation Guide, the diagnosis code element is required on all claims/encounters except claims for which there are no diagnoses (e.g., taxi claims).  The American Clinical Laboratory Association (“ACLA”) believes requiring diagnosis information on health care claims creates an unreasonable burden on clinical laboratories because they cannot supply diagnosis codes on their own; rather, laboratories must obtain these codes from the patient’s physician, who often does not supply the information to the laboratory.

Clinical laboratories typically have no contact with the patient – they generally perform testing on a specimen they pick up from the physician and they report test results back to the same physician.  Moreover, clinical laboratories do not provide a diagnosis, they simply report the results of laboratory tests back to the physician for his or her review.  It is the physician – not the laboratory – who actually diagnoses the patient.  Indeed, under federal fraud and abuse laws, laboratories may be sanctioned for using diagnosis codes (ICD-9 codes) that are not supplied by the physician or his or her staff.  As a result, clinical laboratories must rely upon physicians to provide diagnosis information.  However, because of other demands on their time and the time of their staffs, physicians often object to having to list ICD-9 codes for individual tests.  Even when laboratories do request diagnosis information, physicians routinely fail to provide such information to the laboratory.  

Requiring diagnosis codes on laboratory claims places the burden of obtaining the information on the party least likely to be able to obtain it.  Physicians have little incentive to provide the laboratory with diagnosis codes because there are virtually no legal or financial consequences to the physician for transmitting incomplete information to the laboratory.  It is impossible for a laboratory to know why a physician ordered a test unless the physician provides the information.  Furthermore, the laboratory has no ability to force the physician to turn over this information if he or she fails to provide it in the form required to submit the claim or at all.  Thus, if diagnosis information is required to electronically submit a claim, laboratories will be faced with filing paper claims or will end up doing testing for free when they cannot obtain the required information from the physician. 

Furthermore, in most circumstances, diagnosis information has no bearing on the processing of the claim for payment.  For instance, in the encounter setting – where the payor agrees to pay the laboratory a bundled or capitated amount per month for the testing provided – there is no need for such information, and consequently laboratories have no system in place to capture diagnosis information for testing reimbursed in this manner.  In addition, many other third party payers do not require this information to adjudicate claims.  ACLA believes that, in order to protect the patient’s privacy and as required by the HIPAA Privacy Regulation’s “minimum necessary” standard, such information should not be provided unless necessary for adjudication of the claim. 

CMS has recognized and addressed the difficulties faced by laboratories with regard to diagnosis information.  The Medicare program does not require diagnosis codes to be submitted with claims except in limited circumstances (e.g., testing that is covered by a national coverage determination or a local medical review policy).  In fact, during the negotiated rulemaking process to determine coverage and administrative policies for clinical diagnostic laboratories, at which physicians, laboratories, and CMS were all represented, the Negotiated Rulemaking Committee specifically discussed this issue and determined that requiring diagnosis information on all claims would “present significant burdens on some physicians” and laboratories.  Similarly, HHS has recognized clinical laboratories’ unique status by allowing such entities – termed “indirect treatment providers” – to be exempted from certain obligations under the HIPAA Privacy Regulation because they do not generally have contact with the patient. 

The Implementation Guide for professional health care claims should join CMS and HHS and address the unique position of clinical laboratories and other indirect treatment providers by requiring the diagnosis code only where the provider and the payer have agreed that it is necessary for adjudication of the claim.  There is growing support for eliminating data elements that are not necessary for adjudication.  Recent letters from the Workgroup for Electronic Data Interchange (WEDI) and the state of New Jersey have recommended that the Secretary of HHS allow payers to continue to accept non-standard transactions after October 16, 2003 so long as the claims include all of the elements necessary for adjudication of the claim, as agreed upon between the payer and the provider.  ACLA urges the adoption of this position with respect to the diagnosis code element. 

The challenges faced by clinical laboratories and other indirect providers in securing all data elements required to submit a compliant standard transaction extend beyond diagnosis codes.  Thus, ACLA is also recommending changes to other data elements, based on the same reasons explained above.