CMS to Audit Drug Screening Services for Medical Necessity
By: Justin Vaughn, M.Div, CPC, Director of Compliance

5/26/2011

As you know, you may submit code G0434 (at 1 unit only) for Medicare patients when performing an “in-house” urine drug screening service that does not involve an on-site high complexity lab.  However, even though Medicare will certainly pay you for such screenings, that does not mean you will get to retain these reimbursements.

A handful of Medicare carriers have recently published guidance stating that they will not pay for urine drug screening when it is deemed to be a routine service.  Rather, they expect there to be medical necessity attached to these tests, and have developed documentation standards that providers must meet in this regard.  For example, National Government Services (NGS), the Medicare carrier for New York, among other states, has issued a Local Coverage Determination (LCD) outlining two prerequisites for withstanding a CMS audit for drug screen services.  Your documentation must indicate one of the following two situational conditions:

• You “suspect” a drug overdose as having occurred.  In such a case, you can perform urine drug screens during “active treatment for substance abuse or dependence.” Obviously, this scenario will not apply to most patients; OR

• You “suspect” that the patient is involved in “other illicit drug use.”

The NGS LCD advises providers that if their urine drug screening does not meet either of the above conditions, they will need to obtain a signed Advance Beneficiary Notice (ABN) from the patient, advising the patient that Medicare will not pay for the drug screen, and therefore the patient will have to pay for it him/herself.  In such a situation, the provider would need to inform Medac that a signed ABN is in place so that we will know to submit G0434 with the appropriate modifier (GA), indicating the presence of a signed ABN.

While only a few carriers have published such specific guidance, it may be wise for your practice—regardless of the state—to abide by the above documentation criteria.  You do not want to find yourself years later owing Medicare money        should they ultimately determine that such tests were routine rather than necessary. 

I want to acknowledge healthcare attorney David Vaughn as a source for this article.

The information presented herein reflects general information that is current as of the date it was first published.  In light of changes that may occur in the health care regulatory and compliance environments, the author's presentation of this information might become outdated.  Please check with your individual legal and/or compliance advisor(s) prior to taking any significant actions based upon the information and advice presented.