In a practice known as client billing, a treating physician realizes a profit by charging a patient a mark up on the price of the pathology service performed by an outside laboratory. Client billing gives providers an incentive to choose a laboratory based on price, rather than quality. It also creates an incentive to order more tests than necessary, as each service ordered results in an incremental increase in profit.
...California, Iowa, Louisiana, Montana, Nevada, New Jersey, New York, South Carolina and Rhode Island have enacted legislation requiring direct billing to payers for certain pathology services. Five states prohibit markups and thirteen more require physicians to disclose what they pay for tests in bills to patients and insurers. All patients deserve the same protections from excessive charges and unethical activity that direct billing affords.
