Medical Board Sides with Physician over Pathology Billing Issue

The Texas Medical Board (TMB) has handed Texas physicians and Texas Medical Association some ammunition in their fight with United Healthcare and other payers over payment for the professional component of clinical pathology services.

In a case in which a Houston-area patient complained to the TMB when she was billed for professional component of clinical pathology services that her health plan refused to cover, the board found there was no breach of medical ethics and that the physician appropriately billed for his services.

Billing for pathology services has been an issue since the U.S. Centers for Medicare & Medicaid Services (CMS) decided to stop paying hospital-based pathologists separately for the professional component of those services in 1980. Instead, CMS increased its hospital payments for clinical pathology with the expectation that the hospital would reimburse the pathologist.

Following CMS' lead, United Healthcare in 2004 stopped paying for the professional component of clinical pathology services. Unlike CMS, however, United did not increase its payments to hospitals and did not require pathologists to be paid out of the hospital payments. More recently, several other health plans adopted similar policies.

Wichita Falls pathologist Susan M. Strate, MD, chair of TMA's Council on Socioeconomics, says the plans argue that Medicare does not pay for the professional services and that they simply are following Medicare protocol.

"That's not true," Dr. Strate said. "Medicare does pay for the services, but it's a pass-through to the hospital with expectation that the hospital pays the pathologist."

TMA officials have met with the Texas Department of Insurance (TDI) and United Healthcare in an attempt to resolve the issue, but TDI has not indicated whether it intends to require the health plans to pay for pathology services. Several pathology groups also have taken United to arbitration over its refusal to pay.

What has many pathologists even more frustrated is that some health plans are telling patients that a separate bill for the professional component amounts to an inappropriate attempt by the physician to double bill.

TMA also weighed in on the pathologists' side in the recent case before the TMB. In a June 6 letter to TMB Executive Director Donald W. Patrick, MD, JD, TMA argued that billing for the professional component of clinical pathology services is appropriate in situations where the services are not covered by a health plan and the beneficiary is given advance notice.

"Insurers and HMOs are continually attempting to limit the payments they make to physicians," Don R. Read, MD, chair of TMA's Patient-Physician Advocacy Committee, said in that letter. "Simply, it is in the interest of insurers to label professional component billing as an 'improper billing practice' as it reduces their costs. However, such policies are to the detriment of patient well-being as it creates an impediment to delivering care."

Sheryl Dacso, JD, DrPH, represented the pathologist in the case before the TMB and represents several pathology groups in complaints against United. She says some of the plans, including what she called some "small outlier plans," actually are advising patients to lodge complaints to the TMB and TDI if they are billed for professional component pathology services.

"We have proof from correspondence now from three different patients where the information they're putting in their letters looks very, very similar one to the other even though they are entirely independent of each other," Ms. Dacso said. "What I think is going on is a conspiracy with the plans to scare these doctors into not pursuing collection when they've decided not to pay."

Webster pathologist Marion Rundell, MD, says he has received letters from patients saying their insurance company informed them they are being double billed. In one letter, the patient said, "I was informed that the professional component included on these accounts is being improperly charged to me and I am not responsible. The company also informed me that should I continue to receive billing for these services I should report it to the Board of Insurance."

Dr. Rundell thinks the health plans' actions are illegal. "The issue of should pathologists be paid for the professional component of clinical laboratory tests is clearly yes, they should," he added.

While it is too early to say how the TMB ruling will affect the larger issue of pathology billing, Dr. Strate is encouraged that the board sided with the physician.

"I think it certainly is a positive outcome that the medical board saw correctly that this particular physician's billing was entirely appropriate and was similar to the billing practices of most other pathologists in the state. But how far reaching this outcome may be, in itself, in terms of the whole issue of professional component billing, is uncertain."