Two Medicare Administrative Contractors (MACs), Palmetto and WPS, have finalized their proposed Local Coverage Determinations (LCD) regarding medical necessity guidelines for special stains and IHC stains. These LCDs, L36805 and L35922, will become effective July 14, 2024. There were significant concerns raised by the pathology and laboratory community regarding the language of the proposed LCDs. The final LCDs, while not ideal, incorporate multiple comments from the pathology and laboratory community and are less restrictive than the proposed LCDs.
For any pathology or laboratory providers in jurisdictions covered by Palmetto (Alabama, Georgia, North Carolina, South Carolina, Tennessee, Virginia and West Virginia) or WPS (Indiana, Iowa, Kansas, Michigan, Missouri and Nebraska), it will be important to review these LCDs carefully to ensure that the ordering of the stains and the documentation of the medical necessity for the stains complies with the LCDs in connection with pathology services for Medicare and Medicare Advantage patients. This does not mean, however, that the guidance in these two LCDs is limited only to Medicare and Medicare Advantage service within the Palmetto and WPS jurisdictions. As many readers are aware, other MACs often adopt the guidelines established by Palmetto, so it would not be unexpected to see new LCDs in the future from other MACs that are identical or similar to Palmetto's L35922. In addition, private payers increasingly look to restrictive LCDs in making their own coverage and medical necessity determinations, and providers may benefit from incorporating these guidelines into their pathology services for all patients, not just Medicare and Medicare Advantage patients.
Both the Palmetto and WPS LCDs state that Medicare will only cover special stains and IHC stains ordered by pathologists when all of the following conditions are met:
- The stains are medically necessary so that a complete and accurate diagnosis can be reported to the treating physician;
- results of the stains are communicated to and are used by the treating physician in the treatment of the patient; and
- the pathologist documents in the pathology report why the additional stains were performed.
The LCDs state that reflex templates or pre‑orders for special stains and/or IHC stains prior to the review of the routine H&E stain by the pathologist are not reasonable and necessary, with limited exceptions: "A pathologist must first review the H&E stain prior to ordering special stains. .... [E]xceptions do exist and are recognized standards of care in the practice of pathology. These exceptions include, but are not limited to, renal, liver and neuromuscular biopsies, and for the suspicion of an infectious disease, particularly in an immune‑compromised patient. In certain clearly defined circumstances, it may be reasonable to perform some IHC on sentinel lymph nodes when the frozen section show they are free of tumor."
The Palmetto and WPS LCDs explain that the medical necessity for the special stains or IHC stains, and the results of the stains, must be documented in the report. The LCDs specifically explain that a statement alone in the report to the effect of "IHC confirms the diagnosis" will not be covered as reasonable and necessary.
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