Travel Allowance Fee Updates for 2023

Feb 14, 2023 | Industry Insights

Make sure your billing staff or third party billing company know about specimen collection fees and travel allowances for 2023 and other policy updates and reminders.

Executive Summary

CMS issued regulations to codify and modify policies on billing Medicare for specimen collection fees and travel allowances. Per mile travel allowances are coded as (P9603) for trips longer than 20 miles, and reimbursement is $1.11 per mile. Flat rate allowances are coded as (P9604) for trips under 20 miles, and is a flat rate of $1.10 multiplied by the mileage and divided by each beneficiary charged with a speciman collection fee. In addition, appropriate place of service codes must be submitted with the HCPCS codes.

Background of Regulation 

Medicare Part B pays a specimen collection fee and travel allowance, when medically necessary, for a laboratory technician to draw a specimen from either a nursing home patient or homebound patient under Section 1833(h)(3) of the Social Security Act (the Act). CMS bases payment for these services on the clinical laboratory fee schedule (CLFS).

These regulations can affect labs involved in:

  • Mobile phlebotomy
  • Molecular testing
  • Labs serving nursing homes
  • Labs serving assisted living facilities
  • Labs offering mobile COVID testing

 On January 6, CMS published Medicare Claims Processing Transmittal 11778 regarding the 2023 Medicare travel allowance fees for specimen collection and to clarify various laboratory specimen collection fee policies.

Effective date: January 1, 2023 

Implementation date: January 23, 2023


Changes Outlined from the Final Rule

As part of the new regulation—42 C.F.R. §414.523—CMS is codifying and updating the Medicare CLFS travel allowance policies for laboratory specimen collection. The updates reiterate and clarify the parameters for calculating allowables, the patient’s coverage, and the services the technician is performing. The rule provides updates to two separate situations and associated billing codes broken into per mile travel allowance (P9603) and flat rate allowance (P9604).


Per Mile Travel Allowance (P9603)

This applies to situations where the technician travels more than 20 miles round-trip to their destination with the sole service of collecting or drawing specimens. No reimbursement is allowed if:

  • The technician arrives and no specimens are retrieved
  • The technician picks up specimens drawn by a physician or personnel

Services rendered under these parameters in the CY 2023 is $1.11 per mile. This is to be prorated in situations when there are patients that are non-Medicare in the same trip. This means that a pro-rated collection fee is collected in addition to the per mile fee only when a patient covered by Medicare and a patient not covered by Medicare are visited within a single trip. The per mile fee only applies to the patient covered.


Flat Rate Allowance (P9604)

This applies to situations where the technician travels under 20 miles round trip. Reimbursement allowed in CY 2023 is a flat rate of $1.10 multiplied by the mileage and divided by each beneficiary charged with a speciman collection fee.

This flat rate is to be prorated by the laboratory by the number of beneficiaries for whom a specimen collection fee is paid. 

This means that if a technician sees a non-Medicare patient in a trip with Medicare patients, the Medicare patients will have a claim charged individually for travel allowance and the non-Medicare patient’s specimen collection fee is not payable. The non-Medicare patient is then not included in the dividend of total beneficiaries served on the trip.


Coding Requirements Under Travel Allowance Updates

Independent laboratories must submit HCPCS code P9603 (per mile) or P9604 (flat rate) for each patient encounter for places of service:

  • 12 – home
  • 13 – assisted living facility
  • 14 – group home
  • 31 – nursing facility
  • 32 – domiciliary care
  • 33 – custodial care
  • 54 – intermediate care facility

Claims will be denied for travel allowance submitted with place of service 81 – independent lab.

In addition, laboratories should submit HCPCS modifier LR (informational purposes only) to indicate “round trip” when using HCPCs code P9604 (travel allowance, prorated trip charge).




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