Bill would prohibit doctors from marking up some lab tests
To Lincoln Sen. Tony Fulton, an ongoing dispute between two medical specialties has a simple solution.
Dermatologists should not be allowed to mark up the cost of a lab test performed by pathologists.
It might be good for business, but it’s not good for medicine, he said.
And, it’s unethical, according to the American Medical Association’s Code of Ethics.
Fulton has waded into the issue again this session, after a stalled attempt last year to end the mark-up practice of some doctors, especially dermatologists.
His bill (LB1104) would prohibit marking up a charge for anatomic lab tests, such as biopsies or pap smears, when the doctor did not directly supervise or perform the lab service.
Fulton calls the mark-up an additional arbitrary and unnecessary cost for services rendered by someone other than the doctor who ordered the test.
Fulton’s bill also would require the doctor ordering the lab work to disclose in the patient’s bill the name of the pathologist or lab that performed the test and the actual amount to be paid for the service.
Last session, Fulton had proposed that pathologists bill patients directly. That bill (LB513) was held in the Health and Human Services Committee so doctors could solve the dispute on their own.
That didn’t happen, Fulton said, so he came back with another attempt to end the mark-up practice.
The way it works now, according to Dr. Gene Herbek, an Omaha pathologist who testified at the Feb. 22 hearing on the bill, is that a laboratory might charge a doctor $30 for a test such as a skin biopsy, Pap test or other tissue biopsy. The doctor who ordered the test can then bill the patient or an insurer an additional $30 or $60 more.
“Marking up bills is contrary to the best interests of both the patient and the practitioner,” he said.
Herbek said no patient who is awaiting a biopsy result and possible cancer diagnosis should be “exploited” by a mark-up charge.
Dr. David Watts, who testified on behalf of the Nebraska Dermatology Association, said the issue is not one of ethics but of competition. AMA ethics guidelines say free market competition is good for patients, he said.
Large national pathology labs specializing in skin are able to compete effectively with local pathologists because they are efficient, provide good service and charge substantially lower rates than local pathologists, he said.
The College of American Pathologists would like to restrict the lower cost laboratories to protect local pathologists, Watts said.
“It’s simply business,” he said. “But the strategy seems to be to publicly vilify the physicians who use these laboratories, alleging unethical business practices.”
Watts said the AMA ethically allows the recovery of administrative costs and services for the tests. That includes processing and packaging tissue specimens, obtaining and maintaining patient demographic information, shipping and handling specimens, billing and collecting from insurance carriers, reviewing microscope slides and reports for accuracy, checking recordkeeping, and communicating the results to patients.
Also, he said, the doctor assumes the risks for nonpayment.
Fulton said doctors can charge for administrative costs, but should do it as separate charges, not lump it in with lab charges.
If mark-up is to be prohibited, Watts said, it should be prohibited across all medical specialties, rather than just anatomic pathology.
Watts said the AMA’s thinking on the ethical issue continues to evolve. Georgia doctors have a resolution before the AMA to oppose any state or federal legislation that dictates how a doctor bills for medical services.
The Nebraska Medical Association has opposed the bill, but has worked with both sides of the issue on a compromise to try to settle the dispute, said Dale Mahlman, executive vice president.
The medical association’s concern, he said, is how the bill would affect all doctors and specialties.
“We want to do something, but we want to do the right thing,” he said.
If the bill is good for one specialty, why not for all, he asked.
Other doctors, including family practitioners, obstetricians/gynecologists and gastroenterologists, have been interested in the issue, Mahlman said. But dermatologists have been the most directly affected.
Eighteen states have passed direct billing or anti-mark-up disclosure laws, Fulton said.
“I think it’s a bad deal to have the price of medical care escalating at the rate it is, partly because of mark-up,” Fulton said.
Sen. Joel Johnson of Kearney, chairman of the Health and Human Services Committee, said people on both sides of the issue feel strongly about it.
“It’s very difficult to get them to come to an agreement,” he said. “But we’re still hopeful that they can.”
Reach JoAnne Young at 473-7228 or jyoung@journalstar.com.
Dermatologists should not be allowed to mark up the cost of a lab test performed by pathologists.
It might be good for business, but it’s not good for medicine, he said.
And, it’s unethical, according to the American Medical Association’s Code of Ethics.
Fulton has waded into the issue again this session, after a stalled attempt last year to end the mark-up practice of some doctors, especially dermatologists.
His bill (LB1104) would prohibit marking up a charge for anatomic lab tests, such as biopsies or pap smears, when the doctor did not directly supervise or perform the lab service.
Fulton calls the mark-up an additional arbitrary and unnecessary cost for services rendered by someone other than the doctor who ordered the test.
Fulton’s bill also would require the doctor ordering the lab work to disclose in the patient’s bill the name of the pathologist or lab that performed the test and the actual amount to be paid for the service.
Last session, Fulton had proposed that pathologists bill patients directly. That bill (LB513) was held in the Health and Human Services Committee so doctors could solve the dispute on their own.
That didn’t happen, Fulton said, so he came back with another attempt to end the mark-up practice.
The way it works now, according to Dr. Gene Herbek, an Omaha pathologist who testified at the Feb. 22 hearing on the bill, is that a laboratory might charge a doctor $30 for a test such as a skin biopsy, Pap test or other tissue biopsy. The doctor who ordered the test can then bill the patient or an insurer an additional $30 or $60 more.
“Marking up bills is contrary to the best interests of both the patient and the practitioner,” he said.
Herbek said no patient who is awaiting a biopsy result and possible cancer diagnosis should be “exploited” by a mark-up charge.
Dr. David Watts, who testified on behalf of the Nebraska Dermatology Association, said the issue is not one of ethics but of competition. AMA ethics guidelines say free market competition is good for patients, he said.
Large national pathology labs specializing in skin are able to compete effectively with local pathologists because they are efficient, provide good service and charge substantially lower rates than local pathologists, he said.
The College of American Pathologists would like to restrict the lower cost laboratories to protect local pathologists, Watts said.
“It’s simply business,” he said. “But the strategy seems to be to publicly vilify the physicians who use these laboratories, alleging unethical business practices.”
Watts said the AMA ethically allows the recovery of administrative costs and services for the tests. That includes processing and packaging tissue specimens, obtaining and maintaining patient demographic information, shipping and handling specimens, billing and collecting from insurance carriers, reviewing microscope slides and reports for accuracy, checking recordkeeping, and communicating the results to patients.
Also, he said, the doctor assumes the risks for nonpayment.
Fulton said doctors can charge for administrative costs, but should do it as separate charges, not lump it in with lab charges.
If mark-up is to be prohibited, Watts said, it should be prohibited across all medical specialties, rather than just anatomic pathology.
Watts said the AMA’s thinking on the ethical issue continues to evolve. Georgia doctors have a resolution before the AMA to oppose any state or federal legislation that dictates how a doctor bills for medical services.
The Nebraska Medical Association has opposed the bill, but has worked with both sides of the issue on a compromise to try to settle the dispute, said Dale Mahlman, executive vice president.
The medical association’s concern, he said, is how the bill would affect all doctors and specialties.
“We want to do something, but we want to do the right thing,” he said.
If the bill is good for one specialty, why not for all, he asked.
Other doctors, including family practitioners, obstetricians/gynecologists and gastroenterologists, have been interested in the issue, Mahlman said. But dermatologists have been the most directly affected.
Eighteen states have passed direct billing or anti-mark-up disclosure laws, Fulton said.
“I think it’s a bad deal to have the price of medical care escalating at the rate it is, partly because of mark-up,” Fulton said.
Sen. Joel Johnson of Kearney, chairman of the Health and Human Services Committee, said people on both sides of the issue feel strongly about it.
“It’s very difficult to get them to come to an agreement,” he said. “But we’re still hopeful that they can.”
Reach JoAnne Young at 473-7228 or jyoung@journalstar.com.
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