Z-Code transitions have become a requirement as of July 1st, 2018, but far too many labs are still behind on implementing them into their revenue cycle management (RCM) practices.

Molecular Diagnostics (MolDX) is experiencing a much brighter year than 2017, but Z-Codes have come around to impede your revenue collection.

Apache Health wants to provide some know-how to incorporate into your billing cycle to get claims out the door the right way and on the first try.

The Background on Z-Codes

Palmetto beat out Cahaba for MAC jurisdiction JJ this Summer, and for those who fall into that geographic location, much is changing on your billing front.

As of July 1st, 2018, any claim received with a service date on or after Feb. 28th will require a Z-code on the claim line if the service is covered under molecular diagnostics testing.

Any claim without it should be hit with denial and provide a kink in your revenue flow.

To mitigate this, MolDx labs need to start using Z-codes on everything necessary, but how do you put them incorrectly?

Implementing Z-Codes

The first step, let’s establish everyone affected by this change. Jurisdiction JJ lab providers Palmetto GBA, Noridian, WPS, and CGS, require Z-Code relationships on claim line items.

If you deal with these groups, you’ll need to implement changes.

Second step, the easiest way to apply Z-codes is to use them from Dex Diagnostics and have a code association by CPT code and the panel.

This way, your basis for each claim entry is covered. Simply put, Dex will assign a Z-Code approved for association with applicable panels and CPT codes.

If you need assistance with the Z-Code application, Apache can provide a referral for any client in need.

In the third step, once Dex Exchange approves the panel and assigns Z-Codes to your requests, it’s transferred to the MolDx team within Palmetto to support the code association.

Upon approval, the Z-Codes approved, and their respective associations will be sent to the client.

The final step, wait about 10 days before submitting the Z-Code claims to ensure the system is updated on Palmetto’s side for your claims.

Other Factors

Reference Labs

For lab providers that use reference labs for MolDX samples, the reference lab will need to apply for the Z-Codes, not yours.

The reference labs have to reach out to Dex or the referral source provided. The lab providers will then use the Z-codes approved for the reference lab outlined above.

Claims Submissions

Upon receiving the Z-code to be used with panels and CPTs, each claim must have separate line items with the applicable CPT and corresponding Z-codes in the SV101-7 loop element.

Denial Reasons

If you have denials coming back, it’s most likely due to these three reasons:

1. You aren’t applying Z-Codes to needed CPT/panel tests on your claims.

2. Palmetto hasn’t approved the Z-Codes you’ve received for payment.

3. The Palmetto has approved but hasn’t updated the authorization to pay within their system.

Palmetto Recoupments

In an admission by Palmetto on July 11th, they’re going back to all claims before June 30th and denying for Z-Code relationship.

All MolDX claims from July 1st to July 11th are subject to reprocessing and recoupments based on viability and use of Z-Codes.

 To Summarize

Don’t freak out when you see an increase in denials and recoupments.

You’ve just got to adapt to the newest change on the MolDX forefront and implement Z-Codes, and you’ll see a resurgence in properly processed claims.

Please verify that you’ve gone through the appropriate steps to ensure your Z-Codes are confirmed, approved, and processed to implement them into your practices.

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