Reactions To FL Court’s Ruling On Clin Path Fees

Court says clinical path professional billing requires an advance disclosure to patient

CEO SUMMARY: Reimbursement for clinical pathology professional services is under attack in a variety of ways throughout the United States. Recently a Florida Court of Appeal added a new court ruling to the growing body of legal decisions on this topic. Careful study of the ruling shows that the court affirmed the role of the clinical pathologist, but wanted patients to understand this role before testing is performed and a bill is generated.

How DOES the July 12 ruling by Florida’s Fifth District Court of Appeal impact long-standing procedures used by pathologists seeking reimbursement for clinical pathology professional services?

“Pathologists should be alert to the potential consequences of this litigation,” stated Richard S. Cooper, a partner with McDonald, Hopkins, Burke & Haber of Cleveland, Ohio. “First, the ruling is a state court decision. Second, it may yet be appealed to that state’s Supreme Court. Third, the ruling itself is a validation that pathologists in Florida who already have appropriate language included in the admissions package are probably legally well- positioned.”

This case is known as Central States, Southeast & Southwest, etc. vs. Florida Society of Pathologists, etc., et al. Pathologists had gone to court and won an injunction in 2001 banning Central States, a health insurer, from advising patients that bills they receive from pathologists for clinical pathology professional services are “fraudulent” and should not be paid. Central States appealed, resulting in the Fifth Appeal Court’s ruling on July 12 that delivered a mixed result to the pathology profession. (See TDR, August 5, 2002.)

Positive Aspect Of Ruling

“The Appeal Court decision has a positive aspect for pathologists,” observed Cooper. “The court did not say that clinical pathology services were fraudulent or fictitious as argued by Central States. Rather, the court chose to focus on the contractual relationship that exists between patients and pathologists.

“In simplest terms, the Appeal Court decided that, if not notified in advance of these fees, the patient was not under an obligation to pay them,” explained Cooper. “The Appeal Court studied the admission form presented to patients when they are admitted to the hospital and observed that ‘we (the Appeal Court) see nothing in these forms that obliges a patient to pay a pathologist or anesthesiologist in the absence of a professional relationship with the pathologist or anesthesiologist.’ The Appeal Court ruling seems to concentrate on whether or not the patient had prior notice of clinical pathology professional component charges.

“I must emphasize that this ruling is not binding in other jurisdictions,” added Cooper. “As well, there are federal court decisions which affirm the right of pathologists to bill for clinical pathology professional component services. It is important to view this Florida case in the context of other legal decisions.

Legal Standing To Bill

“Having said that, we’ve recommended that our clients check the language used in admissions and outpatient registration documents of their hospitals,” Cooper stated. “We consider this a reminder and an opportunity for pathologists to strengthen their legal standing with respect to professional component billing.

“If modifications or supplements to these materials would better address the concerns raised by this recent court ruling, pathologists should initiate discussions with their hospital administrators,” he continued.

Registration Materials

“These materials should clearly explain that the patient may receive
bills for the professional component of clinical pathology services and the patient is financially responsible for those services,” stated Cooper. “Pathologists might want to include these materials, with a signature line for patient acknowledgement, in the forms used for hospital admission and outpatient registration.

“By doing this, pathologists establish a written contract with patients in advance of services. It meets the concerns expressed in the Florida Court of Appeal ruling,” declared Cooper.

“I’d also suggest that pathologists, while undertaking to review the documentation in their hospital’s admission and outpatient registration documents, consider adding language to their hospital contracts that obligates the hospitals to include this type of form in the hospital’s admissions packages,” added Cooper.

Sample Language To Use To Establish Relationship

AT A MINIMUM, Attorney Richard S. Cooper of McDonald, Hopkins, Burke and Haber recommends that pathologists include language of this type in hospital admission and outpatient registration forms:

“While you are in the hospital, you may receive anatomic or clinical laboratory tests directly performed by a pathologist. You may also receive clinical laboratory tests that will be performed under the supervision and direction of the pathologist, but are not personally performed by the pathologist. Although a pathologist may not perform these tests or personally review their results, the pathologist is responsible for the supervision and direction of the laboratory to insure that the performance of these laboratory tests and the results are appropriate. You may receive the a bill for these different types of pathologist services. By signing this form, you agree to pay the pathologist’s charges for these services if your health plan does not cover all of the pathologist’s charges.”

No Widespread Changes

Within Florida, the ruling has caught the attention of the pathology profession, but seems to have stimulated few changes in billing practices. “In the eight weeks since this ruling was issued, not much has changed,” noted Linda Liston, Director, Managed Care Services for Per-Se Technologies Inc., a healthcare services company that provides outsourced business management services to clinical speicalties across the country, including pathology groups in Florida.

“Among our pathology clients, it’s remained business as usual,” she explained. “Pathologists in Florida are studying this decision, but we’ve seen no rush to make substantial changes yet. That’s probably because there are still legal options that may yet change the final outcome of this litigation between Central States and the pathology community.”

Liston also noted that Per-Se’s role in sending bills involves the
downstream part of the process. “For pathology groups in Florida, this court ruling focuses on the up-front steps before testing is done and a bill is generated. Since it is complex and time-consuming for hospitals to revise documents and implement new ones for the registration and admission process, I think most of our pathology clients in Florida are in a state of ‘watchful waiting.’ They want to see what the next step in the court process will be. At Per-Se, once a final decision is reached in this case, we will recommend an appropriate course of action for our clients.”

Useful Insight

THE DARK REPORT observes that the Florida Appeal Court decision provides a useful insight for pathology groups seeking to improve their legal claim to billing for clinical pathology professional services, regardless of where the practice is located within the United States.

Pathologists can strengthen their legal position in regard to professional component billing by insuring that documents presented to patients at admission or outpatient registration include the type of language recommended earlier in this intelligence briefing. As Cooper noted, the only aspect of clinical pathology professional component the Florida Appeal Court could attack was whether or not the patient had a “contractual relationship” with a pathologist that he/she would never meet prior to performance of the lab tests.

By notifying the patient in advance, whether by using ABN-type of
form in an outreach setting or having the right language included in hospital admissions or outpatient registration forms, pathologists are documenting their “contractual relationship” with the patient and strengthening their legal claim to be paid for clinical pathology professional services.

Sound Business Practice

From this perspective, the Florida Court ruling is simply emphasizing
what was already recognized to be a sound business practice by some of the more savvy pathology groups within the United States. Over the years these groups have already incorporated similar language in documentation presented to patients before specimens are collected and lab tests are performed.

The next chapter in the litigation between Central States and Florida
pathologists may involve a state Supreme Court review. That is one reason why pathology groups in Florida are in a mode of “watchful waiting.”

However, it is important to view the efforts of Central States to cease payment for clinical pathology professional services as part of a larger battle. Across the United States, ever-growing numbers of payers and hospitals are willing to challenge the right of pathologists to be paid for these services. That is the more ominous trend. This Florida case is but one small battle in the ongoing defense of the pathologists’ rightful claim to reimbursement for valuable services rendered.


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