QUESTION:    Can our lab bill Medicare for specimen collection fees for lab specimens collected by phlebotomists who are independent contractors rather than employees?

ANSWER:     Yes. Section 60.1 of Chapter 16 of the Medicare Claims Processing Manual states: “This fee will not be paid to anyone who has not extracted the specimen.” The Manual provision in question is silent about the employment or contractor status of the phlebotomists who work for the lab. Therefore, this provision does not prohibit the laboratory from billing the collection fee, regardless of whether the specimen is collected by employees or independent contractors, since in either case it is the lab which collects the specimens through these individuals. No other interpretation makes sense. If the Manual provision stating that the fee will not be paid to “anyone” who has not extracted the specimen was read in a way to allow only the individual who personally extracted the specimen from the patient to be paid the fee, then only individual phlebotomists – rather than labs that employ or contract with them – could receive the payment. However, this is not the case since labs do get paid when their employees extract specimens. There is no express or implied prohibition against labs using independent contractors to actually extract the specimen and be paid the fee. The statement in question was likely inserted to prohibit the collection fee to be channeled to doctors’ offices, nursing homes or other places where a lab extracted a specimen as a disguised kickback or referral fee, not to prohibit labs from independently contracting with phlebotomists.