Under the microscope: Billing tips for in-house dermatopathology services

December 1, 2008

We recently hired a dermatopathologist to join our group. There are six dermatologists in our practice, and the dermatopathologist will be reading the slides for all the specimens generated from our group.

Key Points

We will not be making the slides in our office; rather, we will be purchasing those from an outside lab. The lab will make the slides and bill us directly. Our dermatopathologist will read the slides, and we will bill for the services from our office.

I have four questions:

2. If we can't bill globally, how do we bill, and how much will we be paid?

3. What is the date used on the claim for the pathology? Is it the date read or the date the specimen was obtained?

4. Are there any Stark concerns with this new provider joining our group? We are especially concerned about the self-referral rules.

A First, congratulations in finding a dermatopathologist for your practice. They are a rare find these days. You have many questions and many are not easy to answer, as there are so many factors involved. I will try to be as specific as I can.

1. How do you bill globally for your service when the slide prep (e.g., technical component) is purchased?

You have to look at this from two different perspectives. First, let's see what Medicare allows you to do in this case.

Years ago, Medicare implemented the purchased-service regulation, which allows practices to purchase the technical component (i.e., the slide prep). However, you are prohibited from marking up the charge for the slide.

In other words, you must bill Medicare exactly the amount you are paying the outside laboratory and not one penny more. Therefore, if you purchase the slide for $6.50, then you can only bill Medicare $6.50 and not one cent more than that, even though Medicare allows up $66.65 for the technical component.

Because you are purchasing the technical component, you cannot bill globally. You must bill the technical component on one claim form and the professional component (e.g., the reading of the slide) on another.

Why do you need two forms?

The reason is that you must fill out the form differently for each component.

For the technical component:

A. Enter the name and NPI of the referring/ordering provider in blocks 17 and 17B of the CMS-1500 form.

B. In block 20 of the claim form, fill in "YES," and indicate how much you pay for the slide (the purchased price without any markups).

C. In block 23, include the CLIA number of the lab where the slide was purchased (not the CLIA number of your practice).

D. In block 24J, enter the NPI of the physician who performed the procedure (e.g., biopsy, excision, shave removal, etc.) for which the slide(s) was made.

E. In block 32, include the name and address of the lab where the slide was purchased and the lab's NPI number.

F. In block 24G, put the total number of slides you are billing for (in units). Be sure to multiply your individual charge times the number of slides billed in block 24F. Do not bill multiple slides on different lines. Bill one line with the total number of units.

For the professional component:

A. Enter the name and NPI of the referring/ordering provider in blocks 17 and 17B of the CMS-1500 form.