AADA addresses pathology billing issues that raise ethical, legal concerns


By Robert T. Brodell, MD

The AADA Board of Directors on March 2 voted to approve a new position statement on pathology billing. Although the Board was unanimous in its support for the position statement, this issue has elicited strong feelings among some members who may not necessarily agree with all of the points in the statement. As a member of the AADA Board of Directors and the Association’s Dermatopathology Rapid Response Committee, I want to personally assure members that the Association is seeking to protect the interest of the specialty and its members.

As cited in the position statement, the Association takes several strong stances to support dermatologists:

  • The Association supports the right to bill for one’s own work, whether it's clinical or dermatopathology.
  • The Association supports the principle of freedom of choice of dermatopathology consultants.
  • The Association supports the principle of dermatologists being well-suited to operate dermatology office labs. 

However, the AADA also is concerned about the ethical and legal propriety of several pathology billing practices associated with the purchase of some or all dermatopathology services from an outside lab. 

As the position statement reads, these practices "may endanger patient safety, undermine quality of care, raise medico-legal risks/compliance red flags, and invite ethical concerns."

We believe that dermatologists will agree that their colleagues should eschew any practice that puts them in this kind of ethical and legal jeopardy.

Many of these arrangements are technically legal, but the landscape is rapidly changing. Release of anti-markup rules by the Centers for Medicare and Medicaid Services (CMS) in 2009 added pressures that, when coupled with changing state laws and payers’ policies, argue strongly against financial incentives that can be construed as fee-splitting. These arrangements with pathology labs, across a number of specialties, have been shown to drive up utilization and costs.

As a result, CMS and private payers are taking a hard look at payment for pathology services. In addition, it is expected that Congress may consider making amendments to the Stark law that take aim at the in-office ancillary services exemption. 

The fact is, if we don’t manage our own house, someone will do it for us. And, they may do it in a draconian way that curtails our ability to choose who provides dermatopathology services for our patients. Some proposals even limit dermatologists from reading their own dermatopathology specimens.

We need to warn our members that they are treading on ground that could lead to costly fines, as well as significant legal problems.

I was in private practice for 28 years and I know the ways the fees for dermatologists have been ratcheted back. Some dermatologists have the mind-set that, “We need to do everything we can do to make money to keep the office open and stay afloat.” But these thoughts must be tempered by the ethical implications and the legal and financial risks certain billing arrangements create. In this respect, the weight on the AADA to update its position statement on this issue to protect its members could not be ignored.

We believe that dermatologists will agree that their colleagues should eschew any practice that puts them in this kind of ethical and legal jeopardy. As such, a position that is widely held to be unethical can't be defended. I believe in this, and I hope for the sake of our specialty that you do, too.

Dr. Brodell is a member of the AAD/A’s Board of Directors, the Practice Management Committee, and the Dermatopathology Rapid Response Committee. He is a dermatopathologist and chief of the division of dermatology at the University of Mississippi Medical Center.

Email the Member to Member editor at members@aad.org.

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