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New pathology billing law creates confusion
e-Reports, July 11, 2011
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The ISMA is working to obtain clarification for you Untitled document

Physicians have been contacting the ISMA about a new law effective July 1 that restricts how pathology services can be billed in Indiana. The ISMA staff is continuing its efforts to obtain clarification; keep reading e-Reports, ISMA Reports and postings on the ISMA website for updates.

The new law
According to the law created by House Bill 1071, a “provider” (defined as a health care provider or clinical laboratory) may present a bill, claim or other demand for payment for an “anatomic pathology service” (defined below) under two circumstances:

  1. If the anatomic pathology service was performed:
    • Within the “provider’s” office
    • By a physician (including a physician group practice) or under the direct supervision of a physician (including a physician group practice)
      AND
    • In accordance with federal laboratory certification laws
  2. If a sample taken from a human body was sent by a “provider” that performed an “anatomic pathology service” to a second “provider” for a “second opinion,” the initial “provider” may bill for the “second opinion.”

Except in the case of a “second opinion,” the bill may be presented to only:

  1. The patient
  2. The patient’s insurer or other third-party payer
  3. A government agency, or other agency or organization, that serves as a payment source on behalf of the patient OR
  4. The hospital, health clinic, public health clinic or rural health clinic

In the case of a second opinion, the “provider” giving the second opinion may bill the requesting provider for that second opinion.

The definition of “anatomic pathology service” includes histopathology, surgical pathology, cytopathology, hematology, subcellular and molecular pathology, and some blood banking services performed by a physician or under the supervision of a physician. The law further defines all of those terms.

“Second opinion” is defined as “consultation, histologic processing, or additional testing performed on a sample by a second provider after an anatomic pathology service is performed on the sample by a first provider.”

Find the full text of the law at in.gov.

Efforts to clarify the law
The Indiana Association of Pathologists (IAP) strongly advocated for this legislation over the past three years. The IAP stated the purpose of the law, like in 17 other states, is to protect patients and third-party payers from bills for anatomic pathology services that have been marked-up for profit by physicians who order – but do not perform or supervise – these services.

However, the law does not mention or define mark-ups or global billing, and it permits providers to bill for “second opinions.”

Therefore, the IAP asked the Medical Licensing Board of Indiana (MLB) to clarify IAP’s belief that “physician providers, including dermatologists or pathologists, who perform the professional component of anatomic pathology (diagnostic) may bill patients or payers for histologic processing or second opinion consultations performed by another physician or laboratory.”

The Indiana Academy of Dermatology has delineated several scenarios believed to be permissible under the law and also submitted them to the MLB for clarification.

The current situation
At the ISMA’s urging, the MLB discussed the law at its June 23 monthly meeting but declined to opine on hypothetical scenarios, issue guidance or promulgate clarifying rules. According to the MLB, its role is to decide cases before it, based on actual facts available.

Practices needing compliance assistance should obtain advice from their private health care attorneys.

Although the ISMA does not have policy on this issue and remained neutral on House Bill 1071 during the legislative session, the ISMA leadership understands your need for clarity. We will continue to seek that clarity for you, in collaboration with the dermatology and pathology associations.

If you’d prefer the ISMA take a formal position on these issues or this law, you can submit a resolution for consideration by the ISMA House of Delegates in September. The deadline to submit resolutions is July 18.

If you have further questions, contact the ISMA Government Relations or Legal departments at (317) 261-2060 or (800) 257-4762.

Copyright: Information written and displayed on www.ismanet.org is the property of ISMA and may not be reproduced without expressed written permission of the Indiana State Medical Association.

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