Chapter 35 : Charges and Fees for Laboratory Services

Abstract:

This chapter talks about the payment for laboratory services based on four key concepts: (i) know your real test costs, (ii) set charges and accept fee schedules that guarantee a reasonable profit margin, (iii) set charges to be market competitive and provide services that are better than those of the competitors, and (iv) avoid any appearance of kickbacks. The chapter explains the relationship between charges and fee schedules and a reasonable profit margin and describes the uses for profits and how they relate to generating returns on investments. It discusses appropriate ways to avoid the appearance of “kickbacks” and how this relates to compliance. The responsibility for cost analysis of individual laboratory procedures rests primarily with the laboratorian. Counter to attempts to develop rational charges based on real costs and net income is the concept of payor-established fee schedules. Fee schedules are generally loosely based on charges; but charges may vary considerably by payor. Local fees are set at 60% of prevailing charges. Capitated contracts for laboratory services are somewhat uncommon in outpatient arenas, but they may play a major role in provision of laboratory services in extremely cost-constrained markets.