Modifier 90; Reference (Outside) Laboratory

Policy ID: Mod 118

Section: Modifiers

Effective Date: January 01, 2027

Last Reviewed: June 10, 2026

Applies To: Migrated Commercial

This policy applies to physicians and other qualified healthcare professionals.

Definitions

Code/Term

Code Description/Term Definition

Independent Laboratory

An independent laboratory is one that is independent of an attending or consulting physician’s office and of a hospital that meets at least the requirements to qualify as an emergency hospital.

Modifier 90 – Reference (Outside) Laboratory

Modifier 90 is appended to a procedure code to identify laboratory procedures performed by a party other than the treating or reporting physician, independent laboratory or other qualified health care professional.

For example: A general practice physician submits a claim for cervical smear services performed by a reference (outside) laboratory and the physician bills:

• 88150-90 – Cytopathology, slides, cervical or vaginal; manual screening under physician supervision

Pass-through Billing

When a physician or other qualified health care professional, facility or ancillary provider bills the Health Plan for services that were performed by another entity, such as a reference laboratory.

Reference (Outside) Laboratory

A laboratory that receives a specimen from a physician, independent (referring) laboratory or other qualified health care professional who is unable to perform a specific test on the specimen. A reference laboratory is the laboratory that actually performs the test on the specimen.

Referring Laboratory

A laboratory that receives a specimen to be tested, then refers that specimen to another laboratory to perform the test.

Policy Statement

Our Health Plan does not allow pass-through billing for laboratory services. Any laboratory services billed with modifier 90, including but not limited to those from an office setting (Place of Service 11) will not be reimbursed, unless State, Federal, Centers for Medicare & Medicaid Services (CMS), contracts and/or other requirements indicate otherwise. However, independent clinical laboratories can refer laboratory services to a reference laboratory. Our Health Plan will directly reimburse the independent clinical laboratory that performs clinical diagnostic laboratory tests, when modifier 90 is billed to indicate that the service was referred to an outside laboratory, based on any applicable fee schedule or contracted/negotiated rate.

A valid Federal Clinical Laboratory Improvement Amendments (CLIA) Certificate Identification number is required for reimbursement of any clinical laboratory services.

Laboratory tests must be performed by, and billed by, a laboratory participating with our health plan. The use of non-participating laboratories may subject our members to unnecessary services not ordered by the treating or referring provider, or other unreasonable financial exposure. In such circumstances, we may hold the treating or referring provider financially liable for any services deemed to be not medically necessary or non-reimbursable, if the treating or referring provider referred the specimen or member to the non-participating laboratory.

References

American Medical Association. Appendix A: Modifiers Current Procedural Terminology (CPT^®). AMA Press
Centers for Medicare & Medicaid Services (CMS), Medicare Claims Processing Manual, Chapter 16 - Laboratory services
Noridian Medicare, Modifier 90

Cross References

Med 106 - Urine Drug Testing

Disclaimer

Your use of this Reimbursement Policy constitutes your agreement to be bound by and comply with the terms and conditions of the Reimbursement Policy Disclaimer.

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