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Healthcare Alert: Technical component grandfather provision

The grandfather provision for technical component of anatomic pathology services provided to Medicare inpatients and outpatients of “covered” hospitals is scheduled to sunset on December 31, 2011.  This grandfather provision permits an independent laboratory to bill the Medicare Part B carrier for technical component of anatomic pathology services provided to Medicare inpatients and outpatients of a hospital that outsourced its technical component of anatomic pathology services as of July 22, 1999 to an independent laboratory under an arrangement pursuant to which the independent laboratory billed the Medicare Part B carrier directly for such outsourced services.
Without Congressional intervention, this grandfather provision will end at the end of this year, and independent laboratories will no longer be able to bill their Medicare Part B carriers for the technical component of anatomic pathology services provided to the Medicare inpatients and outpatients of these covered hospitals.  Rather, the laboratories will be required to bill the hospitals.  The hospitals will not receive any additional payments for such services for Medicare inpatients, although the hospitals will be able to bill for the outpatient technical component services under the Medicare outpatient prospective payment system.
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