By Karie Rego

A new Medicare program laboratory demonstration project starts July 1, 2011 and provides some additional revenue for hospital or independent labs.

Any lab can participate and there is no application. Under the demonstration project, labs can bill for complex tests provided within 14 days of hospital discharge that otherwise would be included in the inpatient DRG. The tests are for analysis of gene protein expression, topographic genotyping or cancer chemotherapy sensitivity assays. The demonstration project will last for 2 years or until $100,000,000 is exhausted. We caution clients who do participate in the demonstration project to be extra careful with medical necessity documentation as CMS said they may ask for data or conduct on-site surveys.

For more information, please contact Karie Rego at krego@sheppardmullin.com or (415) 774-3187.