Why California medical practices cannot mark-up lab test costs

Medicare has traditionally limited the amounts payable to health care providers for diagnostic tests that they do not personally perform, or supervise. In some states like California, health care providers cannot charge patients more than they paid for Lab tests purchased from an outside supplier.  However, not all health care providers understand why California medical practices cannot mark-up lab test costs (click here).

California’s Anti-markup statute

In California, charges for clinical tests that are purchased are subject to the Anti-markup statute.  These tests are subject to Section 655.5 of the Business & Professions Code. The statute deems it unlawful for health care providers to charge for lab tests that they did not perform, or were not performed under their direct supervision.

When to charge for diagnostic tests

Patients can only be charged for a lab test if the physician advises them of the details of the laboratory that will be carrying out the test, i.e. name, address, and cost. In addition, the health care provider cannot charge the patient more than the amount he/she was charged by the lab.

Physicians must meet specific regulations, before billing Medicare for diagnostic tests that have been purchased. Health care professionals often need help interpreting these regulations, so that they fully understand their rights, and know the instances in which they are allowed to charge for lab tests. This often requires the assistance of legal counsel provided by a knowledgeable health care attorney.

If your medical practice is being investigated because of an alleged violation of the anti-markup laws, then you need experienced legal advice and representation. At Nelson Hardiman, Los Angeles we provide advice and also defend health practitioners facing charges under the anti-markup laws. Call us today at 310-203-2800, or visit http://www.nelsonhardiman.com/.

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