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Is Transcription a Technical or Professional Component?

Is Transcription a Technical or Professional Component?

Dear John,
Q: When reporting radiology services, are transcription services considered to be included in the technical component (TC) or the professional component (PC)?
A: When defining professional and technical components for radiology services, the Centers for Medicare & Medicaid Services (CMS) stipulates:

  • The PC of a service is for physician work interpreting a diagnostic test or performing a procedure, and includes indirect practice and malpractice expenses related to that work. Modifier 26 is used with the billing code to indicate that the PC is being billed.
  • The TC is for all non-physician work, and includes administrative, personnel and capital (equipment and facility) costs, and related malpractice expenses. Modifier TC is used with the billing code to indicate that the TC is being billed.

CMS’ definition does not clarify whether transcription services constitute “indirect practice and malpractice expenses” (PC) or “administrative, personnel and capital (equipment and facility) costs” (TC). The American College of Radiology (ACR), however, explicitly says that transcription is a technical cost:
Transcription costs for radiology and radiation oncology services are reimbursed under the technical component and are never included in the professional component. The professional component for radiology services paid under the Medicare Physicians Fee Schedule (MPFS) is not intended to cover transcription costs.
In addition, transcription costs are not included in the physician work valuation process. The professional component represents the physician’s professional services associated with their interpretation (via hand written or dictation etc.) and not transcription itself. Transcribing a report or transcription from a Dictaphone is typically performed by administrative staff and not part of the physician interpretation/work.
Medicare Learning Network
ACR, Medicare Regulation FAQ-Transcription

John Verhovshek
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About Has 570 Posts

John Verhovshek, MA, CPC, is a contributing editor at AAPC. He has been covering medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University.

No Responses to “Is Transcription a Technical or Professional Component?”


    Thank you for this article, John. We are a hospital-based pathology group in a facility where they are asking us to do our own clerical work. (Physician scheduling, mail collection, typing of section-head minutes, typing of reports, etc..)
    We only bill the professional component for pathology services for hospital patients and we re-imburse the hospital for the technical component of outreach cases. Am I correct to think that the administrative duties for the pathology lab are covered under the technical component?
    Thanks again,
    Geoff Snook,CMPE
    Wesley Pathology Consultants

  2. Satish says:

    There is always this tussle about turnaround time in Radiology, and most of the Radiology services use power scribe . Who pays the cost of these services. Can a hospital force the transcription cost on to you. And what if they eliminate the transcription services all together for all physicians in hospital?