PROGRAM MEMORANDUM
INTERMEDIARIES/CARRIERS
Department of Health and Human Services
Health Care Financing Administration
Transmittal No. AB-98-33 Date JULY 1998
CHANGE REQUEST #526
SUBJECT: Medicare Travel Allowance Fees for Collection of Specimens
This memorandum is to clarify payment of travel allowances, either on a per mileage basis (P9603) or on a flat rate basis (P9604).
Medicare, under Part B, covers a specimen collection fee and travel allowance for a laboratory technician to draw a specimen from either a nursing home patient or homebound patient under §1833(h)(3) of the Act and payment is made based on the clinical laboratory fee schedule.
CURRENT POLICY
Travel Allowance - The travel codes allow for payment either on a per mileage basis (P9603) or on a flat rate per trip basis (P9604). Payment of the travel allowance is made only if a specimen collection fee is also payable. The travel allowance is intended to cover the estimated travel costs of collecting a specimen including the laboratory technician’s salary and travel expenses. Contractor discretion allows the contractor to choose either a mileage basis or a flat rate, and how to set each type of allowance. Because of audit evidence that some laboratories abused the per mileage fee basis by claiming travel mileage in excess of the minimum distance necessary for a laboratory technician to travel for specimen collection, many contractors established local policy to pay based on a flat rate basis only.
Under either method, when one trip is made for multiple specimen collections (e.g., at a nursing home), the travel payment component is prorated based on the number of specimens collected on that trip, for both Medicare and non-Medicare patients, either at the time the claim is submitted by the laboratory or when the flat rate is set by the contractor.
NEW POLICY
o Per Mile Travel Allowance (P9603) - There is a minimum of 75 cents a mile. The per mile travel allowance is to be used in situations where the average trip to patients’ homes is longer than 20 miles round trip, and is to be pro-rated in situations where specimens are drawn or picked up from non-Medicare patients in the same trip.
The per mile allowance was computed using the Federal mileage rate of 31 cents a mile plus an additional 44 cents a mile to cover the technician’s time and travel costs. Contractors have the option of establishing a higher per mile rate in excess of the minimum of 75 cents a mile if local conditions warrant it. The minimum mileage rate will be reviewed and updated in conjunction with
the clinical lab fee schedule as needed. At no time will the laboratory be allowed to bill for more miles than are reasonable or for miles not actually traveled by the laboratory technician.
HCFA-Pub. 60AB
2
Example 1: A laboratory technician travels 60 miles round trip from a lab in a city to a remote rural location, and back to the lab to draw a single Medicare patient’s blood. The total reimbursement would be $45.00 (60 miles x .75 cents a mile), plus the specimen collection fee of $3.00.
Example 2: A laboratory technician travels 40 miles from the lab to a Medicare patient’s home to draw blood, then travels an additional 10 miles to a non-Medicare patient’s home and then travels 30 miles to return to the lab. The total miles traveled would be 80 miles. The claim submitted would be for one half of the miles traveled or $30.00 (40 x .75), plus the specimen collection fee of $3.00.
o Flat Rate (P9604) - There is a minimum of $7.50 one way. The flat rate travel allowance is to be used in areas where average trips are less than 20 miles round trip. The flat rate travel fee is to be pro-rated for more than one blood drawn at the same address, and for stops at the homes of Medicare and non-Medicare patients. The pro-ration is done by the laboratory when the claim is submitted based on the number of patients seen on that trip. The specimen collection fee will be paid for each patient encounter.
This rate was based on an assumption that a trip is an average of 15 minutes and up to 10 miles one way. It uses the Federal mileage rate of 31 cents a mile and a laboratory technician’s time of $17.66 an hour, including overhead. Contractors have the option of establishing a flat rate in excess of the minimum of $7.50, if local conditions warrant it. The minimum national flat rate will be reviewed and updated in conjunction with the clinical laboratory fee schedule, as necessitated by adjustments in the Federal travel allowance and salaries.
Example 3: A laboratory technician travels from the laboratory to a single Medicare patient’s home and returns to the laboratory without making any other stops. The flat rate would be calculated as follows: 2 x $7.50 for a total trip reimbursement of $15.00, plus the $3.00 specimen collection fee.
Example 4: A laboratory technician travels from the laboratory to the homes of five patients to draw blood, four of the patients are Medicare patients and one is not. An additional flat rate would be charged to cover the 5 stops and the return trip to the lab (6 x $7.50 =$45.00). Each of the claims submitted would be for $9.00 ($45.00 /5 = $9.00). Since one of the patients is non-Medicare, four claims would be submitted for $9.00 each, plus the $3.00 specimen collection fee.
Example 5: A laboratory technician travels from a laboratory to a nursing home and draws blood from 5 patients and returns to the laboratory. Four of the patients are on Medicare and one is not. The $7.50 flat rate is multiplied by two to cover the return trip to the laboratory (2 x $7.50 = $15.00) and then divided by five (1/5 of $15.00 = $3.00). Since one of the patients is non-Medicare, four claims would be submitted for $3.00 each, plus the $3.00 specimen collection fee.
Put this new information in your next scheduled provider bulletin release.
These instructions should be implemented in your current operating budget.
This Program Memorandum may be discarded after July 1, 1999.
Effective for claims received on or after October 1, 1998, for services rendered on or after January 1, 1998.
Do not reopen claims that have already been adjudicated.
For additional information, contact Cassandra Black at (410) 786-4545.
Last Updated 6/18/98