Billing for technical charges

From:"Weems, Joyce"


My recent answer to this question from one of our reference labs.








December 20, 2002


The Centers for Medicare & Medicaid Services (CMS) issued a Program Memorandum (AB-02-177) Friday which appears to extend the BIPA-2000 Section 542 "grandfather" exception to December 31, 2003. The exception applies to anatomic pathology technical component services to hospital inpatients and outpatients by independent and other "outside" laboratories, when the referring hospital meets the Section 542 criteria.


CMS achieved the extension by using its emergency administrative authority to change the "discard date" of the original Program Memorandum (AB-01-047) to December 31, 2003. It did not, however, change the body of the original text, which refers to the "2-year period beginning on January 1, 2001," thereby rendering the extension instruction to Medicare Part B carriers somewhat ambiguous. CMS has nonetheless assured the College of American Pathologists and others that the extension of the "grandfather" exception to December 31, 2003 is "for real." You can view or download Program Memorandum AB-02-177 by visiting website


I will alert you immediately should I find out anything that suggests we cannot take CMS at its word that the "grandfather" exception has indeed been extended beyond this year-end. Otherwise, you can "breathe easy" and continue to bill Medicare Part B in 2003 for the technical component of anatomic pathology services for inpatients and outpatients of qualifying hospitals served by your laboratory.


Thank you,

Dennis L. Padget, CPA, FHFMA

Padget & Associates


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