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Policy Statements

Billing for the Professional Component of Clinical Pathology

The Professional Component of Clinical Pathology accounts for the Medical Directorship and Supervision of the Clinical Laboratory, to assure for the timeliness, reliability, and usefulness of test results, among many other responsibilities, as outlined in CAP and CLIA’88 standards. As you are probably experiencing, the test menu and required knowledge in Laboratory Medicine has been rapidly expanding and growing more complex thanks to constant technological advances, especially in the areas of coagulation, immunochemistry, molecular pathology and genetics. Never before have Pathologists had a more crucial role in becoming instrumental for the proper ordering and interpretation of these tests by attending physicians.

Since 1983, Pathologists have been reimbursed for these medical services through “Part A”, a pass-down compensation by Hospitals to Pathology groups for federal program (Medicare) covered patients (note: before 1983, the reimbursement was through “Part B”).

For non-federal program (commercial carriers) covered patients, Pathologists may bill for the same services by adding modifier -26, professional component, to the CPT codes of most clinical laboratory tests (i.e. CBC, Chemistry Profiles, TSH, etc). [Please note that Professional Component of Clinical Pathology is distinct from a Clinical Pathology Consultation (80500, 80502), which requires a written report in response to a request for the consultation by an attending physician].

This practice has been in effect for many years in Texas, California, Illinois and Florida, and pathologists from other states have been rapidly adopting it. Although its validity and legality have been challenged by commercial carriers and other entities several times, it has successfully been defended by several State Pathology Societies and is fully endorsed by the College of American Pathologists and the American Pathology Foundation.

Although it is your right, is also worth noting that engaging in this practice carries significant responsibilities from the Pathologists, requiring an active involvement in the Clinical Laboratory as physicians. I would strongly recommend reading and following the “Ten Commandments of professional component billing”, by Jack Bierig, esq., listed on the CAP’s website.

Multiple steps are required before successfully implementing professional component billing. First, gathering all educational material available for your group, hospital administration, patients and commercial payors; second, doing a feasibility study and financial projection to determine if the endeavor is worth pursuing, and third, but vital, obtaining the hospital’s approval for the group to engage in it. The latter will require a significant amount of education of the Pathologist’s role in the Clinical Laboratory and the history of Professional Component of Clinical Pathology, securing a mechanism to minimize negative public relations for the hospital, and perhaps even securing the services of a law firm specializing in this matter. After those have been accomplished, then follow with amending your contract to reflect such approval, amending the patients’ registration form to create a signed written consent, contracting a capable and reputable billing company (considerable human and technological resources are required), developing a reasonable fee schedule and finally undergoing a process of gradual implementation and active monitoring.

Success will depend on your degree of involvement in the Clinical Laboratory, dedication to this process, experience and resources of your billing company and the hospital’s payor mix.

Edwin Leschhorn, M.D.


From the College of American Pathologists website (

The Ten Commandments of professional component billing, by Jack R. Bierig, esq., March 2003

Florida squeeze: Florida court ruling threatens professional component billing, by Jack R. Bierig, esq., December 2002

PC Billing Information Package, December 2007

Check, please—getting paid for your work, by Karen Titus, December 2005

Let’s learn from each other about CP pay, by Mary Kass, MD, May 2005

Information Package DGP130, Professional Component Billing

CPT Assistant, Volume 9, Issue 5, May 1999

CPT Assistant, Volume 15, Issue 8, August 2005

Other websites: AM/PerSe ppt- Colorado Springs.ppt


Liston L: Dispelling the Myths - Billing for the Professional Component of Clinical Pathology, Laboratory Medicine, February 27, 2004


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