Citing possible Medicare abuse by hospitals and independent laboratories, HCFA is recommending that Medicare stop paying outside labs directly for consultation services on inpatient tests.
That would mean hospitals would have to pay the laboratories a share of their prospective payments for the services, reversing a longstanding Medicare payment policy.
Under the current prospective payment system, hospitals are paid for the physician review of all in-patient lab tests. That reflects the days when many hospitals had in-house labs to perform such tests.
However, current payment policy allows independent labs that contract with hospitals to bill Medicare directly for the consultations, for which hospitals are already paid.
"We have become aware that more hospitals are considering contracting their in-house technical component physician pathology services to an outside laboratory if our policy remains unchanged," HCFA said in the proposed physician fee schedule for 2000 that appeared in the July 23 Federal Register.
"We believe we are paying for the technical component (service) twice; once to the hospital through the PPS payment and again to the independent laboratory through the physician fee schedule."
The fee schedule cites unspecified "anecdotal information" that suggests hospitals are encouraging pathologists to establish laboratories near hospitals so that both the hospital and lab can bill Medicare for the tests.
A spokesman for the American Clinical Laboratory Association said the change looked "pretty narrow," but it was unclear what the impact would be.
An American Hospital Association spokeswoman said HCFA's suggested change is not something the group would be worried about. "It doesn't seem like this is a widespread practice, but we will be talking to our members about it," she said.
Independent labs would still be able to bill and receive payment from Medicare for the technical component of pathology services provided to beneficiaries who are not hospital inpatients, HCFA said.
A 60-day public comment period on the fee schedule ends Sept. 22.