Modifier 90: Reference (Outside) Laboratory and Who May Bill

Modifier 90 looks like a housekeeping modifier: this test was run somewhere else. It is not. Appending it is the visible end of a decision that Congress made in statute and CMS implemented with an unusual number of hard edits — whether the laboratory sending you the bill was ever entitled to bill for that test at all.

Most modifiers are judged on documentation. This one is judged on eligibility, and the failure mode is distinctive: rather than denying, a defective referred-laboratory claim is returned as unprocessable, repeatedly, for reasons that are not obvious from the remittance. Understanding which structural elements the claim must carry is the whole of the practical problem.

The Decision Rule

Modifier 90 is correct when all of these hold:

1. The billing laboratory did not perform the test. The vocabulary matters and is used precisely in CMS guidance: the referring laboratory is the one that sends a specimen elsewhere; the reference laboratory is the one that receives the specimen from another laboratory and performs the test. Modifier 90 goes on the line for the test the reference laboratory performed.
2. The billing entity is an independent clinical laboratory with specialty code 69. Chapter 16 of the Medicare Claims Processing Manual (Publication 100-04), Section 40.1.1, states that claims for referred laboratory services may be made only by suppliers holding that specialty code, and that claims for referred laboratory services made by other entities will be returned as unprocessable. This is the first gate, and it excludes physician offices.
3. The referring laboratory meets one of the statutory exceptions that allow it to bill for a test it did not perform — see below.
4. Only one laboratory bills. Section 40.1 states it as a duty: only one laboratory may bill for a referred laboratory service, and it is the referring laboratory’s responsibility to ensure the reference laboratory does not bill Medicare for the referred service when the referring laboratory does or intends to. Where the reference laboratory bills or intends to, the referring laboratory may not.
5. The claim carries both CLIA numbers and the reference laboratory’s identifying details, in the right fields.

The gate most people never see: when a referring laboratory may bill at all

Section 1833(h)(5)(A) of the Social Security Act, implemented at Chapter 16 Section 40.1, provides that a referring laboratory may bill for clinical laboratory diagnostic tests performed by a reference laboratory only if one of three conditions is met:

• the referring laboratory is located in, or is part of, a rural hospital;
• the referring laboratory is wholly owned by the entity performing the test, or wholly owns it, or both are wholly owned by a third entity; or
• the referring laboratory does not refer more than 30 percent of the clinical laboratory tests for which it receives requests during the year — not counting referrals made under the wholly-owned condition above.

The manual works the arithmetic in two examples, and they are worth reading because the denominator is the part people get wrong. A laboratory receiving requests for 200 tests, performing 139 and referring 61 to a non-related laboratory has referred 30.5 percent (61/200) — over the threshold, so it may not bill for any Medicare beneficiary tests referred to non-related laboratories. A laboratory receiving 200 requests, performing 139, referring 15 to a related laboratory and 46 to a non-related one has referred 23 percent, and may bill for all tests. The denominator is requests received, not tests performed; referrals to related laboratories are excluded from the numerator.

The consequence of getting this wrong is retrospective, and the manual says so: if it is later found that a referring laboratory does not in fact meet an exception criterion, the MAC recoups payment for the referred tests improperly billed. The 30 percent test is measured across a year, so a laboratory can cross it mid-year and only discover the position afterwards. That makes it a monitoring obligation, not a one-off determination.

Two carve-outs sit alongside: where a clinical laboratory test is provided under arrangement by a hospital, critical access hospital or SNF, payment is made to the hospital or SNF; and laboratory services provided to a SNF inpatient under Part A are billed by the SNF, not the laboratory, because of SNF consolidated billing.

What the Claim Must Carry

Section 40.1.1 sets the baseline: independent laboratories shall use modifier 90 to identify all referred laboratory services, and a claim for a referred laboratory service that does not contain modifier 90 is returned as unprocessable if the claim can otherwise be identified as being for a referred service. The name, address and CLIA number of both the referring and the reference laboratory must be reported.

Paper claims (CMS-1500)

• Referred and non-referred tests may not be combined on the same paper claim. Where a laboratory bills for both, it submits two separate claims — one for non-referred, one for referred. Where services were referred to more than one laboratory, a separate claim is submitted for each. A paper claim containing both non-referred and referred tests is returned as unprocessable.
• The reference laboratory’s name, address and ZIP code in item 32, showing where the test was actually performed, with the NPI in item 32a.
• The reference laboratory’s CLIA number in item 23.
• A paper claim missing any of those is returned as unprocessable.

The manual’s worked example: ABC Laboratory is approved only for haematology, so it refers a carcinoembryonic antigen test to XYZ. ABC bills the haemoglobin test on one claim reporting its own CLIA number in item 23, and bills the CEA test on a second claim reporting XYZ’s CLIA number in item 23, with XYZ’s name, address and ZIP in item 32 and NPI in 32a.

Electronic claims (ASC X12 837 professional)

The electronic rules invert the paper rule in one important respect. Section 40.1.1.2 provides that where the billing laboratory performs some testing and refers some, the claim is not split — both CLIA numbers go on the same claim, and the presence of modifier 90 at the line-item level identifies the referred tests.

• Billing laboratory’s CLIA number: loop 2300, REF02, with REF01 = X4.
• Reference laboratory’s CLIA number: loop 2400, REF02, with REF01 = F4 — at line level, on the line carrying modifier 90.
• The performing laboratory’s name and address must be present in the appropriate 837 loop.

The manual’s example: DEF Laboratory performs glucose testing and refers tissue typing to GHI. One claim, with the glucose line carrying no modifier and DEF’s CLIA in loop 2300, and the tissue-typing line carrying modifier 90 with GHI’s CLIA in loop 2400.

One further requirement applies to both formats: for claims with a receipt date on or after 1 October 2015, the billing physician or supplier must report the name, address and NPI of the performing physician or supplier on anti-markup and reference laboratory claims, even where the performing entity is enrolled in a different MAC jurisdiction.

Payment and Jurisdiction

Payment for a test performed by a reference laboratory is the lesser of the actual charge by the billing laboratory, the fee schedule amount, or the national limitation amount (Chapter 16, Section 20). Part B deductible and coinsurance do not apply to clinical laboratory fee schedule tests. Note whose charge that is: the billing laboratory’s, not the reference laboratory’s — which is why the purchase price has to be reflected accurately in the charges rather than marked up freely.

Jurisdiction has a rule that surprises people. Section 50.5.1: regardless of whether the laboratory that bills Medicare is the referring or the reference laboratory, it may bill only the MAC servicing the jurisdiction in which the billing laboratory is physically located. The location of a draw station never determines claims filing jurisdiction. Section 50.5.2 works this through with multi-site examples — a Philadelphia laboratory referring work to Millville and Boston may retain jurisdiction for the whole claim in Pennsylvania, but if the Boston or Millville laboratories bill for the services they perform, the Philadelphia laboratory is barred from billing for those services. The one-biller rule is the operative constraint, not geography.

There is also a pricing-locality mechanic worth knowing: Section 50.4 directs MACs to report new state pricing localities to the Common Working File for any reference laboratory service billed with a modifier 90, and the ordinary contractor locality where the test is not a reference laboratory service.

The Misuse That Triggers Denials and Audits

1. A physician office or non-specialty-69 entity billing referred laboratory work. Returned as unprocessable. The correct route is generally for the performing laboratory to bill, or for the anti-markup rules to apply — which are a different framework with their own limits.
2. Both laboratories billing the same test. Only one may. The manual places the duty on the referring laboratory to confirm the reference laboratory is not billing.
3. Crossing the 30 percent threshold without noticing. The exposure here is recoupment of everything improperly billed, not a single denial.
4. Omitting modifier 90 on a referred test. Returned as unprocessable where the claim can otherwise be identified as referred — and, more seriously, a claim without it asserts that the billing laboratory performed the test.
5. Missing or wrong CLIA numbers. A properly formed modifier 90 claim carries two different CLIA numbers. One CLIA number on a claim with a modifier 90 line is internally inconsistent.
6. Mixing referred and non-referred tests on a paper claim. Returned as unprocessable. On electronic claims, the opposite is required.
7. Appending modifier 90 to a specimen collection charge. Contractor guidance states directly that modifier 90 should not be appended to the drawing fee (36415) — a venepuncture cannot be referenced out to another laboratory.
8. Appending modifier 90 to anatomic pathology services. Contractor guidance names this as inappropriate use. Purchased anatomic pathology technical components run through a different mechanism: Chapter 16, Section 40.2 provides that where an independent laboratory bills the technical component of a physician pathology service purchased from a separate physician or supplier, payment is the lower of the billed charge or the Medicare Physician Fee Schedule, and the purchased-diagnostic-test provisions do not apply, so purchase service information is not entered on the claim.

Modifier 90 vs. Its Nearest-Confused Siblings

Modifier 90 answers who performed the test. Nothing else in the laboratory modifier set answers that question, which is why the confusions are all with modifiers answering adjacent ones.

Question	Modifier	What it asserts
Who performed the test?	90	A different, outside laboratory performed it; the billing laboratory referred the specimen
Why is the same test on the claim twice?	91	The test was legitimately repeated on the same day to obtain successive results
Which part of a service is being billed?	26 / TC	The professional interpretation, or the technical performance, of a service that has both
Is this a distinct service that an edit is blocking?	59 / X{EPSU}	Two codes represent separate and distinct services

Modifier 90 vs. modifier 91

These are orthogonal and can appear on the same claim. Modifier 91 explains a repeat of the same clinical diagnostic laboratory test on the same day, and its rules are narrow: it is not for confirmatory reruns, not for repeats caused by specimen or equipment problems, and not where a single reportable result is all that is required. Modifier 90 explains who ran the test and says nothing about how many times. A referred test repeated legitimately can carry both; neither substitutes for the other, and modifier 90 will never clear a frequency edit.

Modifier 90 vs. modifiers 26 and TC

Modifiers 26 and TC split a single service between its professional and technical halves when one entity performs each. Modifier 90 does not split anything — the whole test was performed elsewhere, and one laboratory bills for all of it. The two frameworks meet in anatomic pathology, where a technical component may be purchased from another supplier; that is a 26/TC and anti-markup question rather than a modifier 90 question, and contractor guidance keeps modifier 90 away from anatomic pathology for exactly this reason.

Modifier 90 vs. the anti-markup rules

Both concern work performed by someone other than the biller, and the manual repeatedly names them in the same breath — the item 32a reporting requirement applies to "anti-markup and reference laboratory claims." They are not the same mechanism. Modifier 90 covers referred clinical laboratory tests billed by an independent laboratory under the section 1833(h)(5)(A) exceptions. The anti-markup rules limit what a physician or supplier may charge for a diagnostic test performed by an outside entity, and route through Chapter 1 Section 30.2.9 and Chapter 13. If the biller is not a specialty-69 independent laboratory, modifier 90 is almost certainly not the right frame.

Modifier 90 vs. CLIA certification

Not a modifier comparison, but the most important adjacency. Modifier 90 exists largely because laboratories are certified for specific test complexities and specialties, and must refer what they are not certified to perform — that is exactly what the manual’s ABC/XYZ example illustrates. A laboratory’s CLIA certification determines what it may run in-house, and a referral pattern is often the visible consequence of a certification scope. Where a laboratory is running work it is not certified for, no modifier fixes the problem.

A Working Sequence

1. Confirm the billing entity is an independent clinical laboratory with specialty code 69. If not, modifier 90 is not available.
2. Confirm the referring laboratory meets one of the three statutory exceptions — rural hospital, wholly-owned relationship, or under 30 percent referred. Track the 30 percent figure across the year, not per claim.
3. Confirm the reference laboratory is not billing the same test.
4. Append modifier 90 to the referred line items only.
5. On paper, split referred and non-referred onto separate claims, one per reference laboratory. Electronically, keep them on one claim with line-level modifier 90.
6. Populate both CLIA numbers — item 23 on paper; loop 2300 REF02 (X4) for the billing laboratory and loop 2400 REF02 (F4) for the reference laboratory electronically.
7. Report the performing laboratory’s name, address and NPI, regardless of jurisdiction.
8. File with the MAC for the jurisdiction where the billing laboratory is physically located.

Where Jurisdiction Matters

The statutory exceptions, the 30 percent test, the specialty code 69 restriction, the CLIA reporting fields and the one-biller rule are national and come from the Social Security Act and the Claims Processing Manual. What varies is contractor practice around them: which claims are flagged for development, how quickly unprocessable returns are explained, and what evidence a MAC wants to see on the 30 percent calculation if it asks. Noridian, Novitas and First Coast Service Options each publish their own modifier 90 guidance and it does not read identically.

Two scope limits. Hospital laboratory billing follows different rules — hospital outpatient laboratory tests are generally packaged as ancillary services under the Outpatient Prospective Payment System, with separate clinical laboratory fee schedule payment available only in defined circumstances such as where the hospital furnished laboratory tests alone on that day. And commercial and Medicare Advantage payers set their own referred-laboratory and outside-laboratory policies, including whether they will pay a referring laboratory at all; several will not. Verify against the payer’s policy rather than assuming the Medicare structure transfers.

Frequently Asked Questions

What does modifier 90 mean?

That the laboratory test on that line was performed by an outside (reference) laboratory rather than by the billing laboratory, which referred the specimen. It identifies referred laboratory services on the claim.

Who is allowed to bill with modifier 90?

Independent clinical laboratories with specialty code 69, and only where the referring laboratory meets one of the statutory exceptions — being in or part of a rural hospital, a wholly-owned relationship with the performing entity, or referring no more than 30 percent of the tests it receives requests for during the year. Claims for referred laboratory services from other entities are returned as unprocessable.

What is the 30 percent rule?

A referring laboratory may bill for referred tests if it does not refer more than 30 percent of the clinical laboratory tests for which it receives requests during the year, excluding referrals under the wholly-owned condition. The denominator is requests received. Exceeding it means the laboratory may not bill for any Medicare beneficiary tests referred to non-related laboratories, and payment already made is recouped.

Do both laboratories’ CLIA numbers go on the claim?

Yes. The name, address and CLIA number of both the referring and the reference laboratory must be reported. On paper, the reference laboratory’s CLIA number goes in item 23 with its name, address and ZIP in item 32 and NPI in 32a. Electronically, the billing laboratory’s CLIA goes in loop 2300 REF02 with REF01 = X4 and the reference laboratory’s in loop 2400 REF02 with REF01 = F4.

Can referred and non-referred tests be on the same claim?

On a paper CMS-1500, no — they must be split, with a separate claim for each reference laboratory. On an electronic 837, yes: the claim is not split, and modifier 90 at line level identifies the referred tests.

Can modifier 90 be appended to a specimen collection fee?

No. Contractor guidance states that modifier 90 should not be appended to the drawing fee (36415), because a collection cannot be referenced out to another laboratory.

What is the difference between modifier 90 and modifier 91?

Modifier 90 identifies who performed the test — an outside laboratory. Modifier 91 explains why the same test appears more than once on the same day. They answer different questions and can appear together.

Which MAC does a referred-laboratory claim go to?

The one servicing the jurisdiction where the billing laboratory is physically located, whether that laboratory is the referring or the reference laboratory. The location of a draw station never determines jurisdiction.

Related CASRAI Resources

• Modifier 47: anesthesia by the surgeon — another modifier on Chapter 12’s no-fee-schedule-adjustment list
• Modifier 91: repeat clinical diagnostic laboratory test — the other laboratory-specific modifier, answering a different question
• Modifiers 26 and TC: splitting a diagnostic service
• CLIA certification — what determines which tests a laboratory may run in-house
• CLIA high complexity testing requirements
• CLIA quality control requirements
• Modifier 59 and the X{EPSU} subset modifiers
• Modifiers GX, GY and GZ against GA — who is liable when a laboratory claim denies
• Modifier GA: waiver of liability
• The False Claims Act in billing

Sources: CMS Medicare Claims Processing Manual, Publication 100-04, Chapter 16, Section 20 (payment for reference laboratory tests), Section 40.1 (laboratories billing for referred tests, implementing section 1833(h)(5)(A) of the Social Security Act), Sections 40.1.1, 40.1.1.1 and 40.1.1.2 (claims information, paper and electronic submission), Section 40.2 (payment limit for purchased services), Section 50.4 (pricing localities) and Sections 50.5.1–50.5.2 (jurisdiction of referral laboratory services); Noridian Healthcare Solutions modifier 90 guidance (last updated 12 May 2025). CPT is a registered trademark of the American Medical Association; modifier meanings are described here in summary and the AMA’s descriptor text is not reproduced. General reference material, not billing advice for a specific claim — verify against your own MAC’s current guidance and the payer’s policy.