By Margaret Stafford
THE ASSOCIATED PRESS
Sunday, May. 04 2008
KANSAS CITY — A bill before the Missouri House would prohibit doctors from
marking up the cost of certain anatomical laboratory work — such as skin
biopsies and Pap tests — that are performed by outside laboratories.
The bill, which has been approved by the Senate and is awaiting floor debate in
the House, would prohibit what's known as "pass-through" billing.
That's when a doctor sends a patient's test sample to an outside laboratory for
analysis. The lab charges the doctor a discounted price for the work, but the
doctor bills the patient's insurance or the patient a higher amount.
The extra amount is profit for the doctor, and most patients don't even know
what has happened.
"It seems to me that we should protect the patient from being charged (by a
doctor) for a service that someone else is doing," said Rep. Kevin Wilson,
R-Neosho, who is sponsoring the bill.
Opponents argue that the bill gets the state involved in pricing decisions that
should be left to private practice physicians and could hurt services for some
patients, particularly the uninsured.
The bill would require doctors or laboratories that actually perform the
anatomical services to directly bill insured patients.
Doctors who send the tests to labs could bill uninsured patients for the
services but could not increase the charges. The doctors would have to tell the
uninsured patients who performed the pathology services and the cost.
Nineteen states have passed bills that either require direct billing or
prohibit markup of pathological services. Medicare and Medicaid already have
prohibited doctors from marking up the cost of the anatomical laboratory work
they don't perform.
And the American Medical Association's code of ethics says no physician should
be paid for a service that he or she does not perform, or charge a markup on
services performed by others.
The law would reduce the potential for abuse even as doctors are ordering more
tests than ever for their patients, said Dr. Joseph Lombardo, a pathologist who
is medical director of hospital laboratories in the St. Charles area.
Lombardo said tests for skin cancer and prostate cancer, as well as procedures
such as colonoscopies, had grown dramatically in the past 10 years.
"The general population has never been, on such a broad scale, subjected to so
much testing and put at so much risk for markup charges," Lombardo said.
He cited a 1993 study by the Center for Health Policy Studies that found two
states that didn't have direct billing laws had 9.6 percent higher costs per
test and ordered 28.3 percent more tests than two states that did.
"Patients waiting on biopsy results and wanting to know if they have cancer
should not be exploited by markups," he said. "They need to know the lab doing
the work wasn't chosen for cost rather than quality."
But Dr. Arthur Freeland, a family practice doctor in Kirksville, said the bill
was a solution looking for a problem, at least in Missouri. Freeland is a vice
president of the Missouri Academy of Family Physicians, which testified against
the bill in the Senate.
Freeland said before the session that pathologists could not provide the
academy with any specific examples of unethical markups by Missouri doctors.
"It was sort of, 'This is probably happening in (Los Angeles) or somewhere,'"
he said. "It was that kind of response: 'It must be happening somewhere.'"
Missouri private practice doctors and their patients, particularly those in
small towns, would be hurt by the bill because it removes physicians'
discretion on pricing, he said. Most of Freeland's anatomical lab work is Pap
smears, and he currently negotiates a volume discount for the anatomical
services from a lab about 100 miles from Kirksville.
That arrangement reassures the lab that it will get paid, while assuring
patients that they are getting a good price, he said. Freeland said he had
often reduced the price for some cash-paying patients who needed the tests but
were concerned about costs.
"The lab has no appreciation for who has insurance or who is paying cash, but
patients know I've represented them to get the best price," he said.
Freeland said the markups on his tests were not for profit but to cover his
risk that a patient might not pay a bill.
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