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My grandmother suffers recurring UTIs (hospitalized in Dec for 6 days, Jan for 9 days and admitted to hospital yet again just yesterday! She rarely shows any symptoms (no burning or difficulty urinating, etc.) and behavioral changes are often our first clue that she has an infection. We keep a close watch on her urine and drop it off at her doctor's office every 10-14 days to be checked just to be safe.

My mom dropped off a specimen on 1/6/14 to be sent to the lab. Late that same evening, she became very confused and started hallucinating (classic UTI behavior for her) so we took her to the E/R and she was admitted. Because she was admitted the hospital (and they performed various tests including urine in the E/R), Medicare is denying the claim from the lab for the specimen taken to the doctor's office that morning.

It's a little frustrating, but I actually understand their denial of the claim. The lab is billing $228 for the testing, which is what they've billed several times in the past few months for the test, but Medicare's approved amount is $49.04 and that is what they usually pay. My plan is to call to the billing department at the lab/hospital and tell them I'll be happy to pay the Medicare contract rate since that's what they would have been paid if the claim had been approved. I refuse to pay $228, but anything up to $60 seems fair.

Is this a reasonable offer to make?

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Ah, ok! That's a relief. It's so important to have POA.

I would just go with your original plan and call the billing department. They'll probably be able to tell you exactly what's going to be required and why.
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StandingAlone- I am my grandmother's primary caregiver, have Financial and Medical POA and I handle all of her finances. I would be paying this bill on her behalf using her money.
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I wouldn't pay a dime of it. You're not responsible for your grandmother's medical bills. Or are the funds coming out of your grandmother's pocket? Does one of you have POA?
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