CEO SUMMARY: It’s not just the Medicare program that wants to eat away at the reimbursement for laboratory tests. Private payers continue to seek ways to cut back reimbursement to laboratory providers. The latest attack is on two surgical pathology codes—88300 and 88302. In at least three states, Humana Healthcare Corporation has denied claims submitted by pathologists for these procedures.
HERE’S FIRST NEWS OF ANOTHER attempt by a major health insurer to arbitrarily reverse payment for accepted clinical practices that are integral to the relationship between pathologist, referring surgeon, and patient.
Humana Health Plans, headquartered in Louisville, Kentucky, has begun to deny claims for CPT codes 88300 and 88302 in at least three states, Michigan, Wisconsin, and South Carolina.
Pathology Service Associates, LLC(PSA), the national organization of state pathology networks, reports that PSA member pathology practices in these states were denied claims submitted to Humana for these CPT codes.
Dennis Padget, President of Padget Associates in Simpsonville, Kentucky, saw the same activity as early as January in the Northeast and New England. “Humana’s denials cropped up in a number of states in this region,” he noted. “The Massachusetts Pathology Society is taking an active interest in resolving this, but I think it will require action at the national level.”
“The two CPT codes in question basically cover the pathologist’s examination of tissues involved in minor surgeries,” stated Louis D. Wright, Jr., M.D., Chairman of PSA. “This is accepted clinical practice. These examinations verify, for both the surgeon and the patient, that surgeons removed the correct tissues. The pathologist also makes a determination as to whether the tissues did or did not contain disease. Moreover, clinical requirements compel surgeons to refer these tissues to pathologists, and compel pathologists to examine them.”
In a letter to a PSA pathologist dated March 29, 2000, The Humana plan in South Carolina denied payment for an 88302 claim. It gave as a reason “The level II gross and microscopic examination is a standard procedure that most hospitals require as a quality assurance measure. Since it is a quality assurance measure versus the treatment of an illness or injury, we have determined that the pathologist should be reimbursed by the hospital, and not the insurance company.”
Dr. Wright says that a study of PSA member practices indicates that 88300 generates between 0.01% and 1.2% of annual billings. CPT 88302 generates between 0.05% and 2.8% these procedures can generate as much as 4% of annual billed revenues for a pathology practice.
PSA notified the College of American Pathology (CAP) about this situation. CAP reports similar denials by Humana in Georgia, Wisconsin, Massachusetts, and Nevada.
Humana’s actions should raise a red flag for all lab executives and pathologists. Its attempts to deny payments for a clinical procedure which has unquestioned clinical value, and which is mandated by medical standards and requirements, demonstrates that both clinical laboratories and pathology practices should be vigilant to similar arbitrary denials of even minor CPT codes.
THE DARK REPORT is aware of anecdotal episodes of arbitrary claims denials experienced by individual labs in different parts of the country for different CPT codes. This latest episode, unearthed by Dennis Padget and PSA,
demonstrates that, like liberty, eternal vigilance is a requirement to insure full payment of legitimate claims.
Humana Begins To Deny Claims For 88300 & 88302
During the last 90 days, Humana Healthcare began denying claims for CPT codes 88300 and 88302. Humana sent the letter at left to a South Carolina pathologist in response to his claim for pathology services rendered under CPT code 88302.
Humana denies payment, explaining that it considers 88302 to be “a standard procedure that most hospitals require as a quality assurance measure. Since it is a quality assurance measure versus the treatment of an illness or injury, we have determined that the pathologist should be reimbursed by the hospital, and not the insurance company.”