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Illinois Legislature Passes Anti-Markup Law Applicable to Pathology Services

Yesterday both chambers of the Illinois legislature voted to override the Governor’s amendatory veto and passed Public Act 098-1127, which prohibits a physician from charging a markup on anatomic pathology services if the physician orders but does not supervise or perform the service. The law does, however, permit the physician to add on a “specimen acquisition or processing charge” if it is limited to actual costs incurred for collection and transportation and separately coded as a service distinct from the performance of the anatomic pathology service. If the physician decides to bill for the service despite the inability to charge a price that is higher than what the performing laboratory was paid, disclosure requirements apply. Although the law does not specify an effective date, it will take effect on January 1, 2015, according to a representative from the legislative information office.

Illinois joins a number of other states that already have enacted a markup prohibition.  Virginia, for example, passed similar legislation earlier this year.  Other states have chosen to limit a physician’s ability to profit from laboratory services that he or she orders by requiring direct billing or disclosure when submitting claims.  Before entering into arrangements involving purchased anatomic pathology or other laboratory services, physicians and laboratories should be aware that applicable state laws can vary widely and should be analyzed carefully to ensure compliance. The College of American Pathologists’ website provides additional information regarding the state laws that apply to anatomic pathology billing as well as the the history of the Illinois legislation.

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About this Author

Karen Lovitch Mintz DC Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Medicare, Medicaid & Commercial Coverage & Reimbursement Health Care Transactions Health Care Transactional Due Diligence Health Care Enforcement & Investigations

Karen focuses her practice on representing health care companies in regulatory, transactional, and operational matters. She has a substantial health care regulatory background and advises clients on matters pertaining to the federal anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, the Clinical Laboratory Improvement Amendments of 1988, and the federal Physician Payments Sunshine Act. Karen often applies her strategic insight on these matters to counsel companies on regulatory issues arising in connection with mergers and acquisitions and other...