Clinical Pathology Professional Component Billing

The performance of professional component of clinical pathology services by pathologists involves the use of medical judgment and constitutes the practice of medicine. Although professional component clinical laboratory services are not the same type of face-to-face patient services that many other physicians provide, these are actual medical services, which only pathologists are educated, trained and qualified to per-form.

Federal and state certification standards, including, without limitation, the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), the Joint Commission on the Accreditation of Healthcare Organizations (“JCAHO”), and the College of American Pathologists (“CAP”), require that hospital laboratories contract with pathologists to provide professional component services.

The Medicare program provides for reimbursement for professional component of clinical pathology services to Medicare beneficiaries through Medicare Part A DRG payments to hospitals, rather than through Medicare Part B payments directly to the pathologists.

Remuneration between a hospital and pathologists may implicate the Medicare and Medicaid anti-kickback law, particularly if the pathologists are required to pay direct or indirect remuneration to the hospital as a condition of providing services to the hospital’s inpatients and outpatients.

Reimbursement by private payors and patients for the hospital’s technical component services generally does not cover the professional medical services of pathologists with respect to the tests.

Billing private payors and patients for professional component of clinical pathology services is clearly recognized as being professionally and ethically appropriate.

The legality of billing non-government payors and patients for professional component services for “private” patients is well established.

Billing for the professional component of clinical pathology services for “private” patients is consistent with the policy of the Medicare program with respect to reimbursement for professional component services provided to Medicare beneficiaries. Congress has authorized reimbursement for professional component services to Medicare beneficiaries.

On July 12, 2002, the Fifth District Court of Appeals of the State of Florida (the “Appeals Court”) announced its decision in Central States, Southeast & Southwest, etc. vs. Florida Society of Pathologists, etc., et al.

It is important to note that the Appeals Court’s decision in Central States is only binding in the Fifth District of Florida, and only with respect to the specific circumstances involved in the case.

The Appeals Court in Central States was concerned that the admission materials provided to the patients upon admission to the hospital did not specifically explain the nature of the pathologists’ professional component of clinical pathology services, or the fact that the patients would receive a bill for these services.