Referring and reference laboratories

Section 1833(h)(5)(A) of the Act provides that a referring laboratory may bill for clinical laboratory diagnostic tests on the clinical laboratory fee schedule for Medicare beneficiaries performed by a reference laboratory only if the referring laboratory meets certain conditions.

This article outlines key definitions, billing responsibilities, and claim submission requirements for referred laboratory services, including proper use of Modifier 90 and distinctions between paper and electronic claims. By clarifying these processes, laboratories can ensure correct reporting, avoid duplicate billing, and maintain adherence to regulatory guidelines.

Definitions

Referring Laboratory: A laboratory that receives a specimen and sends it to another laboratory for testing.

Reference Laboratory: A laboratory that receives a specimen from another laboratory and performs one or more tests on that specimen.

A laboratory may act as both a referring and reference laboratory depending on the situation.

Billing responsibility

For any referred laboratory service:

• Only one laboratory may bill
• If the reference laboratory bills, the referring laboratory may not bill
• If the referring laboratory bills, it is responsible for ensuring the reference laboratory does not bill for the same service
• For Medicare Part B, referral laboratory claims are only permitted when billed by independent clinical laboratories (specialty code 69).

A referring laboratory may bill for clinical laboratory tests on the Clinical Laboratory Fee Schedule performed by a reference laboratory only if the referring laboratory meets one of the following conditions: 

• Is located in, or is part of, a rural hospital.
• Is wholly owned by the entity performing such test (one laboratory wholly owns the other laboratory, or both laboratories are wholly owned by a single entity). 
• The laboratory does not refer more than 30% of the clinical laboratory tests for which it receives requests for testing during the year (not counting referrals made under the wholly owned condition described above).

A referring laboratory must attest to which option applies at enrollment using the Clinical Lab Questionnaire Form.

Identification of referred testing

When the referring laboratory bills for a test performed by a reference laboratory, the service is identified using a Modifier 90 – Reference (Outside) Laboratory

• This modifier indicates that:
  • The test was performed by a different laboratory
  • The billing entity is acting as the referring laboratory

Claim submission requirements for referred laboratory services

Paper claims 

An independent clinical laboratory that submits claims in paper format may not combine non-referred (i.e., self-performed) and referred services on the same CMS 1500 claim form. 
If a referring lab bills for both non-referred and referred tests, two separate claims must be submitted:

• One claim for non-referred tests
• The other for referred tests

A paper claim that contains both non-referred and referred tests will be returned as unprocessable.

Required fields:

• Item 33: Billing provider name, address, and phone number (referring laboratory) 
  • Item 33a: NPI of the billing (referring) laboratory 
• Item 32: Name and address of the performing (reference) laboratory 
  • Item 32a: NPI of the performing (reference) laboratory 
• Item 23: CLIA number of the performing (reference) laboratory (required for CLIA-covered services) 
  •  Item 20: Mark "Yes" when services are performed by an outside laboratory 

Electronic claims

Electronic claims (837P) differ from paper claims (CMS 1500) in that they allow separate reporting of billing and performing laboratory information within defined loops and segments (e.g., 2010AA, 2310C, and 2400), whereas paper claims rely on fixed fields (Items 23, 32, and 33) that combine or limit how this information is reported.

Required fields:

•  Loop 2010AA: Billing provider name and address (referring laboratory) 
  • Loop 2010AA NM109: NPI of the billing (referring) laboratory 
• Loop 2310C: Performing (reference) laboratory name and address 
  • Loop 2310C NM109: NPI of the performing (reference) laboratory 
• Loop 2400 REF (F4): CLIA number of the performing (reference) laboratory (required for CLIA-covered services) 
• Loop 2300 REF (X4): May be used to report the billing laboratory CLIA number when required by the payer or claim scenario

For additional information refer to the Resources Section.