How to Prevent Medicare from Disallowing a Diagnostic Test


Have you been prescribed a diagnostic test and found out that Medicare disallowed the test and the laboratory is holding you responsible for payment? Do you know how to prevent this from happening again?

What Medicare Pays

Part A covers the cost of inpatient laboratory services when you are admitted to the hospital and the charges become part of the hospital charge. Part A pays for most services but you are responsible for any coinsurance and deductible.

Part B pays 100 percent of the cost of Medicare-covered laboratory tests for outpatients if performed by a Medicare-certified laboratory.

Part C must pay for everything that is covered in Medicare Part A and B, but sometimes Part C providers offer enhanced benefits.

Why Medicare Disallows the Claim

Here are two major reasons why a diagnostic test might be disallowed:

  1. Wrong or no Diagnostic Code on the prescription;
  2. Test prescribed too many times.

When you receive your prescription from your doctor, ask his assistant to look over the prescription to make sure the necessary diagnostic codes are there.  This will save you a lot of aggravation and hopefully your claim will be processed without a problem.

If in doubt about the frequency of your tests, contact Medicare to find out what their policy is and find out how you can still have the test.

Are You Responsible for the Charges?

Understand that Medicare has negotiated pricing with the laboratory.  The prices are very good.  But if your doctor doesn’t have the correct codes on the prescription, Medicare will disallow the charge and you are responsible for whatever the laboratory list price is for that test.

The laboratory usually has you sign a waiver stating you take full financial responsibility should Medicare not pay the claim.

If you become responsible for the charges, be prepared for “sticker shock” as the laboratory charges you a much higher price than what they will accept from Medicare.

Fact: Medicare disallowed a diabetes A1C test because (1) the diagnostic code was missing, and (2) The frequency was more than allowed.  Medicare’s allowed charge in our area is $27.50 for this test.  Because the claim was disallowed, we received a bill from the laboratory for $111.00.

After appeal, the claim was paid.

Remember – when in doubt contact Medicare.


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