Laboratory Administration & Management of Pathology Practices
Finance
Billing, coding and terminology
Author: Nat Pernick, M.D.
Last author update: 1 November 2014
Last staff update: 7 March 2024 (update in progress)
Copyright: 2014-2024, PathologyOutlines.com, Inc.
PubMed Search: Billing terminology
Table of Contents
Compliance | Current procedural terminology (CPT codes) | International classification of diseases, 9th revision, clinical modification (ICD-9) | Medicare - part A | Professional component billing | Resource based relative value scale (RBRVS) | Client billing | Marketing your pathology practiceCite this page: Pernick N. Billing, coding and terminology. PathologyOutlines.com website. https://www.pathologyoutlines.com/topic/managementlabbillingterminology.html. Accessed April 16th, 2024.
Compliance
- Ensuring that testing and billing is in accordance with applicable law
- Medicare has two compliance rules for teaching physicians: the CPT code must have a specific modifier for Medicare claims and physicians must indicate in every medical report that the teaching physician compliance rules were met
Current procedural terminology (CPT codes)
- Five digit codes and descriptive terms for medical services and procedures that physicians perform for payment CPT codes are owned by the AMA (American Medical Association: CPT® (Current Procedural Terminology) [Accessed 17 November 2017])
International classification of diseases, 9th revision, clinical modification (ICD-9)
- Based on the official version of the World Health Organization's international classification of diseases
- Required by law for Medicare and for all practical purposes by all medical insurance companies for payment of a claim
- Clinician provides a code, as does the pathologist; they may be different (example: clinician - hematuria, pathologist - urothelial carcinoma)
- See CDC: ICD-9-CM [Accessed 17 November 2017], Online ICD9 / ICD9CM Codes: Diseases and Injuries Tabular Index [Accessed 17 November 2017]
Medicare - part A
- Payments for clinical pathology services rendered by pathologists for services generally, not related to a specific patient specimen
- Includes oversight of laboratory, supervising laboratory personnel, reviewing abnormal results, discussion with clinicians
- Paid to hospitals by Medicare; hospitals are supposed to pay reasonable compensation to pathologists
- See Vachette article for details
Professional component billing
- Billing a patient for each clinical pathology test / procedure performed for that patient, regardless of whether pathologist performs or reviews the test
- Theory is that pathologist does oversight of the laboratory (see Medicare part A services above) and is entitled to bill patient for these efforts
Resource based relative value scale (RBRVS)
- Standardized physician payment schedule implemented by Medicare in 1992
- Payment for a procedure code is calculated as the relative value unit (RVU) multiplied by the conversion factor
- RVU is calculated based on physician work, physician practice expense and the professional liability cost for that procedure code and each component is adjusted by geographic practice costs
- All figures are computed by the federal government
Client billing
- Allows clinicians to charge for pathologist's services, pay pathologists a discount and keep the difference
- Appears to violate Medicare regulations and AMA policy but still is embraced by many clinicians
- Unclear if pod labs or other schemes by nonpathologist to bill for pathology services are legal
Marketing your pathology practice
- May not appear obvious for pathology practices but considered necessary by many to (Arch Pathol Lab Med 1995;119:655):
- Keep current clients from switching to other groups
- Get new clients, either for expansion or to replace clients that go out of business, get smaller or switch to other groups
