Pass-Through Billing Generally Not Permitted

Pass-through billing occurs when an ordering physician requests a service and bills insurance for it but does not perform the service, nor do those under the physician’s direct employ. Insurance companies generally forbid this practice.

Say, for example, you draw blood and send the specimen for testing to an outside lab that sends you the results. The lab bills you for its work, then you bill the patient’s insurance plan for that expense, or you bill the patient separately for the lab expense, in addition to filing a claim with the patient’s insurance plan for the other components of your service. That is pass-through billing. The lab, not the physician, should bill the payer for its work.

Here are policies from some of Texas’ top payers.

From Aetna OfficeLink Updates:

Effective Sept. 1, 2017, we’ll deny pass-through billing for most lab charges from a facility or a nonfacility provider. The provider that performs the test must bill for these services. We will pay for pass-through billing during an inpatient hospital admission. We will also pay facilities for pass-through billing for members receiving outpatient services at the facility and for specimen collection that occurs at the facility on the same day as other service

From BCBSTX’s Blue Review 

Blue Cross and Blue Shield of Texas (BCBSTX) does not permit pass-through billing. …The performing physician … should bill for these services unless otherwise approved by BCBSTX. BCBSTX does not consider the following scenarios to be pass-through billing: 

  • The service of the performing physician … is performed at the place of service of the ordering provider and is billed by the ordering physician or professional provider.
  • The service is provided by an employee of a physician … (physician assistant, surgical assistant, advanced nurse practitioner, clinical nurse specialist, certified nurse midwife or registered first assistant who is under the direct supervision of the ordering physician or professional provider) and the service is billed by the ordering physician or professional provider. 

Further, BCBSTX’s Blue Review, says the supervising physicians should use the correct modifiers when billing for services rendered by these midlevel practitioners: 

  • AS modifier for PAs, APNs, or certified registered nurse first assistants (CRNFAs) when they are acting as an assistant during surgery. 
  • SA modifier for PAs, APNs or CRNFAs for nonsurgical services.  

From Cigna’s secure provider website:

Laboratory test procedures must be performed in a laboratory by you or your staff. You will only be reimbursed for covered services that you are certified to perform through the Clinical Laboratory Improvement Amendments (CLIA). All tests for laboratory procedures that you are not certified to perform through CLIA must be referred to a participating laboratory provider. 

Please note that pass-through billing is not permitted for tests that are not performed by you. These tests may not be billed to Cigna or any Cigna affiliate, payer affiliate, payer, or participant.

From Humana’s provider manual:

Humana prohibits pass-through billing. … Provider agrees that services related to pass-through billing will not be eligible for reimbursement from Humana and Provider shall not bill, charge, seek payment or have any recourse against Humana or Members for any amounts related to the provision of pass-through billing.

From UnitedHealthcare’s 2017 administrative guide:

If you are a healthcare care provider, you must only bill for services that you or your staff perform. Pass-through billing is not permitted and may not be billed to our members. For laboratory services, you will only be reimbursed for the services you are certified to perform through [CLIA]. You must not bill our members for any laboratory services for which you lack the applicable CLIA certification. 

Have a coding or billing question? Email your question to TMA’s reimbursement specialists at paymentadvocacy[at]texmed[dot]org, or call (800) 880-7955.

Updated May 23, 2017 

TMA Practice E-Tips main page


Last Updated On

April 19, 2018

Originally Published On

February 07, 2017