The alphabet soup of laboratory compliance

This post was written by Amy Stiles, lab specialist, Compliance, Parkview Health.

Every fall, Medicare beneficiaries can review their healthcare coverage and choose to enroll in or switch between Original (Traditional) Medicare and Medicare Advantage plans for the upcoming year. However, many people may not realize that the type of plan they choose can affect how certain laboratory tests are processed and billed.

In this post, we aim to unscramble the letters and bring clarity to common Medicare terminology, helping you better understand what your plan offers and how to maximize the value of your benefits.

Plan type refresher

Before we dive into the ins and outs of compliance in laboratory services, let's take a look at the most common types of Medicare plans.

Original Medicare consists of parts A and B:

• Medicare Part A is known as hospital insurance. This plan includes coverage for inpatient hospital care, hospice and skilled nursing facilities.

• Medicare Part B is a medical insurance plan that primarily covers medical and outpatient care, as well as some hospital diagnostic and non-diagnostic (therapeutic) services, like preventive lab tests.

Medicare Part C is an alternative to Original Medicare Part A and Part B. These are called Medicare Advantage plans and are offered by private insurance companies. Medicare Advantage plans must offer the basic benefits of all services that Original Medicare covers, except for hospice care. Hospice remains under Original Medicare for patients with Medicare Advantage plans. This means when a patient enrolls in hospice, their coverage switches to Original Medicare for that service only. Medicare Advantage recipients may continue to use their coverage for other services not related to hospice.

Additionally, Medicare Advantage plans often provide coverage for services not usually covered by Original Medicare, such as vision, hearing and dental.

Medicare Part D covers prescription drugs obtained from a retail pharmacy.
 

Reviewing your coverage

This year, Medicare open enrollment takes place from October 15 through December 7, 2025. Any elections or changes made during this period will take place effective January 1, 2026. Here's what you can do:

• Change coverage types. Switch from Original Medicare to a Medicare Advantage plan. Or vice versa. But you cannot be enrolled in both plans simultaneously.

• Change Medicare Advantage plans. If you currently have a Medicare Advantage plan, you can choose a different plan or insurance carrier that may offer various benefits, costs and coverage.

• Change drug coverage. You can also make changes to your Medicare Part D prescription drug coverage at this time.

• Do nothing. If you don't wish to make any changes, your current coverage will remain in effect.

Those enrolled in a Medicare Advantage plan have another opportunity to review their coverage and make sure their plan meets their healthcare needs. This takes place from January 1, 2026, through March 31, 2026. During this period, Medicare Advantage recipients may:

• Change Medicare Advantage plans from one to another.

• Return to Original Medicare with the option to join a standalone Part D prescription drug plan.

Important: This enrollment opportunity is only for people already enrolled in a Medicare Advantage plan as of January 1.

That said, before the end of the enrollment period, it is essential to be aware of any changes to your current plan that will take effect automatically in the new year. Traditional Medicare recipients can confirm updates to premiums, deductibles, and covered services in the annual Medicare and You handbook, online or by calling 1-800-MEDICARE.  

For those who are enrolled in a Medicare Advantage or Medicare Prescription Drug Plan (Part D), you will receive an Annual Notice of Change (ANOC). This document is issued by the plan administrator no later than September 30 each year and explains any changes to the currently elected plan for the upcoming year.

You can find additional information online at Medicare.gov, where you can compare the different plans to help identify the coverage that best meets your medication and disease management needs.

What this means for lab and compliance

Medicare has strict compliance requirements for both healthcare providers and beneficiaries. In this context, compliance refers to ensuring that services and billing adhere to those regulations. For patients, this helps prevent denied claims, unexpected costs, and unnecessary delays in care.

Eligibility for preventive and screening services can vary based on the patient's coverage and is specific to the insurance policy. Examples of laboratory services that may be considered preventive include:

• Cardiovascular screening (cholesterol and lipids)

• Colorectal cancer screening (fecal blood)

• Diabetes screening (Hemoglobin A1c)

• Prostate cancer screening (PSA)

Keep in mind that some diagnostic lab services are not always fully covered by insurance, even when ordered and performed during your routine or annual wellness visit.

Some plans also impose coverage limitations on the frequency of screenings. If the screening service has not been provided within the established timeframe, the claim will likely be processed and paid without any responsibility to the patient. Additional screenings for hepatitis, HIV, HPV and Pap tests may be covered as preventive lab services for high-risk individuals.

Other times a service may require additional justification. Medical necessity is a term used to indicate that a specific clinical reason (diagnosis, sign or symptom) must be provided to support the service ordered by a provider. In the case of laboratory services, many insurance companies have policies that only cover specific lab tests if the diagnosis indicated by the ordering provider is directly related to the patient's illness, injury, condition or symptoms. If a diagnosis code is too broad or unspecified, the claim may be denied due to a lack of medical necessity. Although those diagnosis codes are valid, they can be determined as non-covered.

If your care team suspects this might occur, they will issue an Advance Beneficiary Notice of Non-Coverage (ABN). This document is presented to the patient before they receive services. The ABN informs you that the specific service listed in the notice may not be covered and gives you the opportunity to decline the service if desired. If you agree to receive services, you may be responsible for the cost if the claim is denied.

Receiving an ABN does not guarantee that your Medicare insurance will reject the expense. Before deciding, discuss with your provider the reason for ordering the test and review your plan details. You can also speak with your plan administrator to understand your coverage.

In other situations, your provider may need to check with your insurance company in advance to confirm coverage. Prior authorization is a written request from a provider to an insurance company, seeking pre-approval for a requested service. The provider will be required to demonstrate medical necessity and provide any additional supporting documentation requested by the insurance. Some advanced and molecular laboratory testing may require prior authorization.
 

Final thoughts

Although this review was brief, the information provided can serve as a secure foundation to build on as you navigate the ever-changing world of healthcare insurance and the rapidly growing field of laboratory science. New advances are made each year in disease detection and management, with the laboratory often at the center of personalized treatment plans.

To learn more about Parkview's laboratory services, visit us here. You can also find additional Annual Enrollment Period resources here.