[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR405.515]

[Page 127-128]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 405_FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED--Table of 
Contents
 
          Subpart E_Criteria for Determining Reasonable Charges
 
Sec.  405.515  Reimbursement for clinical laboratory services billed by 
physicians.

    This section implements section 1842(h) of the Social Security Act, 
which places a limitation on reimbursement for markups on clinical 
laboratory services billed by physicians. If a physician's bill, or a 
request for payment for a physician's services, includes a charge for a 
laboratory test for which payment may be made under this part, the 
amount payable with respect to the test shall be determined as follows 
(subject to the coinsurance and deductible provisions at Sec.  Sec.  
410.152 and 410.160 of this chapter):
    (a) If the bill or request for payment indicates that the test was 
personally performed or supervised either by the physician who submitted 
the bill (or for whose services the request for payment was made), or by 
another physician with whom that physician shares

[[Page 128]]

his or her practice, the payment will be based on the physician's 
reasonable charge for the test (as determined in accordance with Sec.  
405.502).
    (b) If the bill or request for payment indicates that the test was 
performed by an outside laboratory, and identifies both the laboratory 
and the amount the laboratory charged, payment for the test will be 
based on the lower of--
    (1) The laboratory's reasonable charge for the service (as 
determined in accordance with Sec.  405.502), or
    (2) The amount that the laboratory charged the physician for the 
service.
    (c) If the bill or request for payment does not indicate that the 
conditions specified in paragraph (a) of this section were met, and does 
not identify both the laboratory and the amount the laboratory charged, 
payment will be based on the lowest charge at which the carrier 
estimates the test could have been secured from a laboratory serving the 
physician's locality. The carrier will estimate this lowest amount twice 
a year by (i) obtaining lists of charges laboratories make to physicians 
from as many commercial laboratories serving the carrier's area as 
possible (including laboratories in other States from which tests may be 
obtained by physicians in the carrier's service area) and (ii) 
establishing a schedule of lowest prices based on this information. The 
carrier will take into consideration specific circumstances, such as a 
need for emergency services that may be costlier than routine services, 
in making the estimate in a particular case. However, in no case may 
this estimate be higher than the lowest customary charge for commercial 
laboratories, or when applicable to the laboratory service, the lowest 
charge level determined in accordance with Sec.  405.511, in the 
carrier's service area.
    (d) When a physician bills, in accordance with paragraph (b) or (c) 
of this section, for a laboratory test and indicates that it was 
performed by an independent laboratory, a nominal payment will also be 
made to the physician for collecting, handling, and shipping the 
specimen to the laboratory, if the physician bills for such a service.

[46 FR 42672, Aug. 24, 1981, as amended at 51 FR 41351, Nov. 14, 1986]