Laboratory Question for the Week of April 2, 2018


My question relates to the Medicare 70/30 rule for referral testing. In the definitions and examples provided by the Centers for Medicare & Medicaid Services (CMS), the terms “related” and “non-related” laboratories are used. Is a joint venture partner’s laboratory a related or non-related laboratory?


Most of what we have read indicates that the CMS guidance around the 70/30 rule is open to interpretation. It suggests that the laboratory should maintain documentation of how they determine what tests are included in the total test count and the referred test count, as well as documentation of the calculation itself.

A joint venture laboratory probably would be considered a related laboratory, but you may want to seek a legal opinion. Transmittal 85 (published in 2004) includes the following statement that suggests that a laboratory with concern about the right to bill for testing should seek advice on this topic:

If it is later found that a referring laboratory does not, in fact, meet an exception criterion, the carrier should recoup payment for the referred tests improperly billed. The RO [regional office] shall take whatever action is necessary to correct the problem.

For transmittal 85, go to

This question was answered in an edition of our Laboratory Compliance Manager. For more hot topics relating to laboratory services, please view our store, or call us at 1.800.252.1578 ext. 2.

Print Friendly, PDF & Email

CPT® copyright 2022 American Medical Association (AMA). All rights reserved.

Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part of CPT, and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The AMA assumes no liability for data contained or not contained herein.

CPT is a registered trademark of the American Medical Association.