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California Society of Pathologists
One Capitol Mall Suite 320
Sacramento, CA 95814 
Tel : 916-446-6001
Fax :  916-444-7462

Medi-Cal Announces Change to Professional Component Billing for Clinical Pathology


The Department of Health Care Services included a notice in their January Medi-Cal Provider Bulletin that states that as of 2/1/10 they will no longer reimburse any claim for most clinical lab services billed with modifiers 26, 27, or ZS. That would effectively eliminate the ability of hospital based pathologists to bill for the professional component of clinical pathology codes which is their compensation for these services for Medi-Cal patients. The Medi-Cal contracts that exist between the program and hospitals either include or exclude the professional component of anatomic pathology and clinical pathology from the hospital's per diem payment.  The PC of anatomic pathology is always excluded and in many cases so is the PC of clinical pathology, but the specific of each hospital will control what can be billed. Some pathology groups bill Medi-Cal for the PC of clinical pathology and some don't again based upon both the Medi-Cal hospital contract and their contract and compensation structure with the hospital.


The CSP has been in contact with DHCS and asked that this policy be revised or withdrawn since it will dramatically impact appropriate compensation for many hospital based pathology groups. We have not yet been able to get a detailed explanation of the reasons for the policy change but assume with the current state budget deficit it is driven by the need to save funds. We expect to have a meeting in the next few days to request that this policy be altered or delayed. We will provide further information in the next few days.

Medicare Changes to Place of Service (POS) and Date of Service (DOS) for Diagnostic Tests


CMS announced two changes to Place of Service (POS) and Date of Service (DOS) for clinical lab services. One policy has now been delayed, the other had has a delayed operative date,  but both are important developments for pathologists.


The first dealing with POS was attempting to address issues with enforcement of the self referral prohibition and services provided in the hospital setting. It states that when a diagnostic test has both a PC and a TC, and the location where it is performed is the hospital, then the POS is the hospital and the physician can only bill the PC of the test. This policy might make a lot of sense for the self referral issue but presents problems for pathology groups that have arrangements with their hospitals to process and interpret community specimens for non-hospital patients. We are aware that some groups have arrangements with their hospitals wherein they pay a technical fee or other cost to the hospital for the use of their premises and personnel to accession and prepare AP specimens that are referred from physicians. Some pathology groups have obtained a separate state lab license and CLIA certificate for an office in the hospital and it in essence becomes an independent lab while others have not gone through a separate license process.


If this POS change did take effect it was not clear whether a pathology group could continue to submit a global charge for Medicare patients. If they did license their office in the hospital it may have been permissible to list the POS as "office" and bill globally, but again it may be subject to interpretation. CMS has just announced that the POS change has been delayed until July 1, 2010. We have been in contact with the CAP to request that these questions be specifically addressed and recognized so that pathology groups may submit global charges in these situations.


The second change announced with respect to Date of Service (DOS) is to take effect on July 1, 2010 and impacts claims for the PC of certain diagnostic tests, including anatomic pathology. The policy states that the DOS for the test is the date that the physician provides the service. Formerly it was the date of accession and this change raises questions that have been posed but not answered. For example for AP gross and microscopic examination is it the date the gross exam is performed, or the microscopic, or when the report is signed. There are many other examples of which is the appropriate date to select and hopefully there will be more information forthcoming. Again this does not take effect until July 2010.