Why has CMS proposed deleting modifier L1?
In 2014, CMS created modifier L1 (separately reportable laboratory test) to allow for separate payment when the lab tests were the only services on the claim or were unrelated to the other services on the claim, meaning that a different physician ordered it for a different diagnosis than the other services on the claim.
Numerous hospitals reported to CMS that the “unrelated” exception is not useful to them because they cannot determine when a lab test has been ordered by a different physician and for a different diagnosis than the other services reported on the same claim. CMS says it agrees with this opinion, and also for other reasons provided in the proposed 2017 outpatient prospective payment system rule, proposes to discontinue modifier L1. Any and all lab tests will be packaged if they appear on a claim with other hospital outpatient services.