I totally get you - didn't make sense to me when my boss brought it up. But I did find this article, if you don't mind and have the time - page two, first paragraph states "These physician services may be billed by the pathologist to the patient (or the patient's insurer)
or to the hospital as the pathologist and hospital may agree. Medicare rules require pathologists to seek payment from the hospital for the professional component of clinical pathology services to Medicare patients because the hospital's Medicare payment rate includes payment for these physician services. Pathologists and hospitals often negotiate a different billing arrangement for the pathologist's professional services for non-Medicare patients. The pathologist may bill a professional component for clinical laboratory services to the patient, and the hospital may bill the technical component." And to answer your question - yes, it would be both lab and path. Thank you again for your help!
OK, yes, I'm familiar with what's being discussed in this article. This is kind of a complex and sticky area and I believe there is ongoing litigation over this issue. I'll do my best to try to summarize my understanding of this.
What they're talking about here is the professional work involved in the management and supervision of
clinical laboratory tests. So this is about ordinary lab tests, not the professional component of the interpretation and report on pathology specimens. Many, if not most, of these tests are automated and don't require physician involvement on a test-by-test basis, but physician supervision and quality control is required to run the lab overall. So as I understand it, some physicians/pathologists whose work is to oversee a clinical lab argue that they should be able to bill payers and be reimbursed for a professional component of each of these clinical tests to compensate them for their participation in the final product that's being delivered. That's the argument of this policy paper you've linked, which is just that - it's a paper advocating a particular position. It should NOT be taken as guidance on how to code or bill. I have heard that the courts have sided with the physicians in some states, so payers that operate fully insured plans in those states
might be required to reimburse a professional component of clinical lab services. Medicare, being a federal plan, would not be subject to those state-specific rulings.
Of course, Medicare does not assign a professional component to any of these codes, so the payment to any facility for that lab test is a global fee which - theoretically at least - should compensate the facility or lab not just for the test, but also for any overhead costs that the lab or hospital would have incurred for that test, which should include the cost of paying a physician to be on staff to supervise the lab. That's the billing arrangement between the pathologist and hospital that they mention here.
Pathology codes that have an assigned professional component are billed as any other (e.g. radiology, cardiology) service that includes a PC - with a modifier 26 on a professional claim.
Clinical laboratory services, though, will not normally be paid with a 26 modifier, because there is no work RVU or assigned value for the professional work in these codes. That's why they're saying that the labs will need to either bill the PC to the hospital directly if the patient has Medicare or bill the PC with the 26 modifier if the patient has a commercial payer - of course that's assuming that the commercial payer in fact would reimburse that, which I think in many cases and many states they would not. I think that most payers follow Medicare in that they do not recognize a professional component of a clinical lab service, and if the laboratory is contracted with that payer, they will not be able to bill or be paid for one.
So like I said, this is confusing and I may not have the full or up-to-date story on this (it's been at least five years since I've looked at this issue) but hopefully this makes some sense and helps.