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Medical-Legal Billing: How to Obtain Reimbursement for Diagnostic Tests

January 3, 2018 by Catherine Montgomery

billing for med-legal diagnostic testsThe conditions under which claims administrators must pay medical-legal doctors for diagnostic tests are specific and narrow. To ensure reimbursement, it’s important to know the rules.

Medical-legal billing has unique regulatory snags that only the intersection of medicine and law could produce. Among those complications is reimbursement for diagnostic services like x-rays and laboratory services. In some cases these diagnostics services are not reimbursable without prior authorization by the claims administrator.

Know the regulations, and use the standard language included in this blog to denial-proof your medical-legal bill.

Medical-Legal Diagnostic Test Rules

California Code of Regulations (CCR) § 9794(a)(1) states the following regarding diagnostics tests for medical-legal evaluations:

(1) X-rays, laboratory services and other diagnostic tests shall be billed and reimbursed in accordance with the official medical fee schedule adopted pursuant to Labor Code Section 5307.1. In no event shall the claims administrator be liable for the cost of any diagnostic test provided in connection with a comprehensive medical-legal evaluation report unless the subjective complaints and physical findings that warrant the necessity for the test are included in the medical-legal evaluation report. Additionally, the claims administrator shall not be liable for the cost of diagnostic tests, absent prior authorization by the claims administrator, if adequate medical information is already in the medical record provided to the physician [emphasis ours].

Prior authorization is not required and the claims administrator is liable for diagnostic reimbursements only when both of the following conditions are true:

  1. The medical documentation provided to the medical-legal doctor lacks “adequate medical information” that would otherwise make the test unnecessary, AND
  2. In order to complete the evaluation, subjective complaints and physical findings must warrant the diagnostic test(s).

In the medical-legal evaluation report, the doctor should document both conditions as true —  the lack of adequate medical information, and the relevant subjective complaints and physical findings required diagnostic testing.

We suggest using the following language in any medical-legal evaluation report for which the doctor performed diagnostic tests without prior authorization:

Per California Code of Regulations § 9794(a)(1), subjective complaints and physical findings during the evaluation warranted diagnostic testing in order to complete the evaluation. The medical records provided did not include adequate medical information.

Thus reinforced, your bill for medical-legal evaluation should produce proper reimbursement for any diagnostic tests. Absent prior authorization, remember to ensure the two conditions described here are present and documented. If the claims administrator denies payment, submit a request for second review within 90 days of receipt of the explanation of review (EOR).

For medical-legal evaluations, reimbursements for diagnostic tests are as listed in the Physician Fee Schedule.  For updates on reimbursements to this and other fee schedules, sign up for our 2018 OMFS webinar, featuring info on changes effective this year.


DaisyBill offers everything medical-legal providers need to ensure correct, timely payment from claims administrator, allowing you to navigate the complex labyrinth of medical-legal billing rules and regulations. Schedule a free demonstration of DaisyBill’s Billing Software today, and see what we can do for your practice.

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