College of American Pathologists
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cap today



October 2006

bullet Billing for outside consult services

The response to a CPT coding question in the July 2006 issue was in part wrong. The questioner asks if it’s appropriate to bill patients for expert or second opinion consultations by outside pathologists. The response says it’s okay to hold the patient or insurer liable for the consultant’s fee, provided the "second look" wasn’t ordered mainly for "internal quality assurance/quality control reasons." Although the Q&A admittedly doesn’t focus on the "who may bill for an outside consult" angle, it nonetheless touches on that important question, and in so doing, it implies that the referring pathologist or the hospital at which he or she practices may pass along the consultant’s charge to the patient or insurer without restriction.

A number of states such as Iowa, Montana, Louisiana, New Jersey, and South Carolina have direct-bill laws that may require outside consultants to bill their own services, or that at least prohibit a referring pathologist or hospital from billing a consultant’s charge. The restriction applies to all patients and insurers in these states, not just Medicare and Medicaid. Check with legal counsel to determine if your practice is affected by a state direct-bill law in these regards.

Notwithstanding state law, under ordinary circumstances, neither the referring pathologist nor his or her hospital may bill Medicare for a medical service of an outside physician, such as a pathology consultant providing an expert or second opinion. In general, Medicare law and policy permit payment only to the physician who performs a service. [See, for example, chapter 1, section 30.2 of the Medicare Claims Processing Manual (CMS IOM Pub. 100-4).] There are limited exceptions to this rule: employers of physicians, and persons/entities that retain physicians as independent contractors, for example. But for one of these exceptions to apply, the outside consultant must have given you or your hospital a written assignment of his or her right to collect directly from Medicare, and you or your hospital must have filed form CMS-855R to include that physician under your or the hospital’s provider number; that’s the only way you or your hospital can legally bill Medicare for an outside physician’s service. Because the exception criteria almost never are met for outside pathology consultants, neither the referring pathologist nor his or her hospital can pass along their charges for Medicare patients, and attaching "reference (outside) laboratory" modifier 90 to the CPT code doesn’t change this prohibition. In short, if you don’t use outside consultants who agree to bill Medicare, count on "eating" all second/expert opinion fees for Medicare beneficiaries, even when the College’s sage advice on patient/insurer-chargeable services applies.

What about Medicaid beneficiaries and private insured patients? Unfortunately, there’s no universal answer available here as there is with Medicare. Some Medicaid agencies pay out-of-state pathology consultants, but others unconditionally refuse. Out-of-network clauses may well limit the ability of outside consultants to collect, if you don’t take this eventuality into account when negotiating contracts with managed care companies. But in general, you should only use outside consultants who agree to bill their services directly to patients and insurers, except in situations when state law or insurance company contract terms direct otherwise.

I hope this helps clarify the "who may bill" rules associated with outside pathology consult services.

Dennis L. Padget, MBA, CPA, FHFMA

DLPadget Enterprises Inc.

Simpsonville, Ky.

bullet Maintenance of Certification

In the August issue Elizabeth Hammond, MD, identified and explained many of the important issues related to Maintenance of Certification in pathology in an interview with writer Mariann Stephens (page 42). The editorial (page 11) by Thomas Sodeman, MD, on the subject raised a concern, also voiced by Dr. Hammond, about potential attrition of dual AP/CP-certified pathologists through the MOC process. This concern has been the subject of past discussions by the American Board of Pathology Maintenance of Certification Committee. We would like to clarify the ABP’s present position on the subject.

The ABP will encourage all AP/CP diplomates to maintain certification in both of the primary disciplines of pathology and will make it as convenient as possible for them. The ABP’s published MOC requirements neither encourage nor even suggest that diplomates initially certified in AP/CP maintain certification in only one of these. A mechanism to change from initial AP/CP certification to MOC in only AP or CP will be available, just as initial certification may be limited to AP or CP only. This route is intended for pathologists whose entire practice is in one discipline, such as individuals in academic medicine or a subspecialty practice. Pathologists who have responsibilities in both AP and CP, even though minimal in one of the two, will be expected to maintain certification in both.

Time-limited certification and MOC are new processes for the ABP and the pathology community and present new challenges. Drs. Hammond and Sodeman correctly observe that MOC is a complex process that requires care and attention to the manner in which the requirements are evaluated and implemented. The ABP will continue to value and solicit consultation and input from the cooperating societies and the pathology community to craft and maintain a program that can achieve the important aims of MOC. The ABP is grateful for the efforts to date of the CAP and other cooperating societies to ensure a smooth inauguration of the MOC process.

Current information on Maintenance of Certification for pathologists can be found on the ABP Web site (

Maintenance of Certification Committee
American Board of Pathology

Robert McKenna, MD, chairman

bullet Minding the business

Your story "Minding the Business End of Pathology" (August, 2006) was an insightful synthesis of some of the underlying internal problems facing pathology practices today. Most pathologists are dedicated and hard-working professionals, but like many doctors, we have enjoyed the ability to focus on our craft and profession in an environment that has been little affected by the market forces most businesses deal with daily.

This has been true for most of health care for many years. We have operated in a bizarre environment characterized simultaneously by Soviet-style central price controls (the Medicare budget and fee schedule) and "consumer" price insensitivity (the patient "buying" the service is not the "payer," except for the uninsured, and the "purchase" is made without reference to price or quality comparison). As a consequence, and predictably, the global cost of health care to the nation is high and the quality is demonstrably variable.

Well, all of that is about to change, primarily because of the unsustainable trend in the cost of health care and its impact on federal and state budgets and on the competitiveness of American products and services when employers must incorporate the cost of health care benefits into the prices they charge. An additional factor, the status of the uninsured, besides being a national embarrassment, further contributes to the non-market based character of the health system through cost shifting and will be a major catalyst for change. To quote economist Herbert Stein: "When something cannot go on forever . . . it will stop."

What will happen? No one knows if we will end up with a nationalized government-administered health care system or some combination of market-based "reforms." However, we are already starting to see market forces enter into the system, if imperfectly. What does this mean for pathology? As noted in your excellent article, it means we can no longer just "show up" each day and do the work that comes in and expect to leave every day fat and happy. We are going to have to compete on the basis of price and quality and to configure our practices to be substantial enough as "businesses" that we can negotiate with customers and influence the economic environment in which we operate-just like successful businesses in most other industries. The problem is that this requires a major change in mindset, and that is not easy for pathologists who have done so well for so long with the "entitlement" view cited in your article. In a sense, the biggest obstacle to our future success…is our past success.

Running our practices as competent businesses does not mean giving up our values as physicians. To the contrary, by ensuring the economic viability and efficiency of those practices (whether private, academic, or in other settings), we can be sure we continue to attract the best and brightest to our specialty and that we as physicians will continue to have a major positive influence on the care of patients. I encourage CAP TODAY to continue to explore some of these issues.

Luke Perkocha, MD

American Pathology Foundation

bullet Critical values

I read the exchange of letters on critical values in the August issue (page 6), in which Stephen Sarewitz, MD, says: "Whether a particular laboratory result indicates an imminently life-threatening condition depends, under certain limited circumstances, on the clinical situation."

Why would the laboratory jeopardize the well-being of the population it serves by having different critical values for different clinical situations? I agree with Robert Footlik and his colleagues that all critical values must be called, regardless of the clinical situation. As stated in CLIA ’88, "an imminently life-threatening condition, or panic or alert values" must be brought to the attention of the individual or entity ordering the test. Otherwise, the collaborative efforts of the care-giving members (laboratory and medical personnel) could fail. Patients are better served by having the laboratory personnel "alert" those using the test results with critical values than they are having some critical values not called because the patients are in a dialysis unit or dependent on some other clinical situation in "certain limited circumstances."

If you have a policy, you must follow it.

It is always better to err on the side of safety. In this case, that would be to call all critical values.

Jorge Mestayer
Point-of-Care Testing Coordinator

Seton Medical Center

Daly City, Calif.