Biopsy billing markups: Justifiable or abusive?

Doctors who take specimens from patients and send samples out for analysis may inflate biopsy fees by up to 400 percent, according to the Saint Louis Post-Dispatch.

While doctors may pay a lab $40 to process and diagnose a biopsy, for example, they may bill patients or payers up to four times the lab rate for the test using anatomic pathology codes (usually 88305), The Pathology Blawg reported. This practice has lined referring physicians' pockets while contributing to what's been called the "Walmartization" of lab chains.

Some physicians--including dermatologists, gynecologists, gastroenterologists and family medicine specialists--rely on lab service markups to compensate for Medicare payment cuts, The Post-Dispatch reported. Doctors say biopsy markups are fair considering the expense of negotiating with outside labs and the costs of sampling, boxing, storing, sending, receiving and billing for tests.

But Medicare, Medicaid and six states prohibit biopsy markups. And the American Medical Association discourages the practice, saying in its code of ethics that "a physician should not charge for a markup, commission or profit on the services rendered by others," the article noted.

Missouri pathologists claim markups gouge patients and payers, inflate healthcare costs and encourage overutilization. And since pathology charges rise with the number of specimens submitted, doctors who mark up and bill for pathology services have a financial incentive to send more specimens, The Blawg noted.

Doctors are billing anatomic pathology codes in opposition to the AMA's views on their use. Anatomic pathology codes are "intended to be reported by the person who is responsible for the examination of the tissue(s) that were submitted for individual examination and pathologic diagnosis," according to Tracy Gordy, M.D., prior chair of the AMA's Current Procedural Terminology editorial panel, The Blawg noted. "It is not appropriate for the treating physician to report CPT codes 88302-88309 as part of an office or other outpatient visit, hospital inpatient services or consultation."

For more:
- read the St. Louis Post-Dispatch article
- here's The Pathology Blawg post

 

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