Lab Test Orders and Standing Orders: What Clinical Laboratories Need to Know About Documentation Requirements
For clinical laboratories, proper documentation of lab test orders isn’t just a best practice – it is a legal and financial necessity. Whether your lab serves Medicare beneficiaries or Medicaid recipients in States like New York or New Jersey, or in the Commonwealth of Pennsylvania, it is critical to understand the differences in requirements for lab test orders and standing orders. Failure to comply with ordering requirements can result in claim denials, audits, recoupments, or allegations of improper billing.
At the federal level, Medicare requires that diagnostic lab tests be ordered by the treating physician or qualified health care provider. While a signature is not always necessary, the provider’s intent to order the test must be clearly documented in the patient’s medical record. Notably, Medicare generally does not recognize standing orders unless they are part of a medically necessary structured care protocol and meet specific conditions. This requirement can create challenges for clinical labs seeking to automate recurring tests for chronic conditions.
Medicaid programs in individual states often have additional – and sometimes stricter – rules. In New York, lab test orders must be signed or electronically authenticated by the provider and include specific patient and provider information. Standing orders are allowed only for certain chronic conditions and must be renewed every 180 days. Labs must keep these orders on file and ensure they are updated in compliance with applicable regulations.
New Jersey’s Medicaid regulations permit standing orders for up to 12 months, provided they are medically necessary and patient-specific. Orders may be issued in writing, electronically, or by phone – but a signed or authenticated version must be obtained within 30 days. Clinical laboratories must retain proof of all efforts to obtain required documentation, as outlined in the applicable regulations.
In Pennsylvania, Medicaid requires a written and signed order for each diagnostic lab test. While electronic signatures are allowed, the Commonwealth’s regulations do not clearly address standing orders, increasing the risk for any lab that relies on them. In the absence of explicit authorization, labs should assume that each test requires a new, properly documented order consistent with Pennsylvania law.
Key takeaway for clinical labs:
- Do not assume uniformity between Medicare and Medicaid, or across state lines.
- Documentation requirements for diagnostic testing orders and standing orders vary – sometimes significantly.
- Labs that process high volumes of recurring tests must take extra care to confirm that every order is valid, properly documented, and within regulatory timeframes.
Is your laboratory compliant with federal and state lab order requirements? Our health care attorneys assist clinical laboratories with developing compliant ordering protocols and responding to audits or recoupment actions. Contact Evan Sampson, Counsel within the firm’s Health Care Practice Group, at esampson@postschell.com or 856.301.2561, today to schedule a compliance review tailored to your lab’s needs.
Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.
About the Author
Evan M. Sampson is Counsel in the firm’s Health Care Practice Group, where he advises health care providers and organizations on a broad range of regulatory, transactional, and litigation matters.