Three bills, one biopsy

A 2026 PFS-rate skin biopsy read pays $70.14 globally, one of the highest-volume codes in the practice and one of the highest-margin lines on the schedule. It is also the line where the most patient-responsibility AR ends up uncollected. The 2026 fee for CPT 88305 splits roughly evenly between the technical component and the professional read. The coding is straightforward, the posting is clean, and the collection rate on the patient share still trails everything else on the schedule.

The patient-responsibility share of provider revenue keeps growing while the willingness to pay it keeps falling. HDHP enrollment with a savings option moved from 27% of covered workers in 2024 to 33% in 2025, per the KFF Employer Health Benefits Survey. Average single-coverage deductibles hit $1,787, and the share of workers carrying a $2,000+ deductible has climbed five points in five years. A $185 path read is rounding error to a fully-met deductible. To an HDHP patient at $1 of $3,000 spent, it's the bill. (We covered the January deductible-reset dynamic earlier this year; path bills compound it because they land weeks after the visit, deeper into the deductible window.)

Industry-wide post-visit patient collection has dropped from 54.8% in 2021 to 47.6% in 2022 and 2023, per HFMA-cited data. HFMA-cited athenahealth data puts collection on physician balances above $200 at roughly 6%. Path bills land squarely in that >$200 bucket.

The path bill is structurally engineered for confusion. The biopsy procedure (a CPT 11102 or 113xx series code) posts on the date of service. The 88305 read is generated days later, depending on lab turnaround and dermatopath signing. If the practice doesn't have an in-house dermatopathologist, the outside lab bills the patient directly, often weeks after the visit, often from an entity the patient has never heard of. The patient sees one encounter and gets two or three statements over four to six weeks. The connection between "the biopsy I had at the dermatologist" and "this $340 bill from a lab I don't recognize" has been lost by the time the statement lands. (This is the same upstream dynamic behind the AR metrics that look fine until they don't: touchpoints stack, charge lag widens, and 90+ day buckets fill before anyone notices.)

Cedar's 2024 Healthcare Financial Experience Study puts the behavioral consequence in numbers: about 4 in 10 patients won't pay if they can't understand the bill, and 75% of providers need more than one statement to collect. The InstaMed 12th Annual Trends Report found 87% of consumers were surprised by a medical bill in 2021, down only four points from 91% in 2019. Surprise here doesn't mean out-of-network. Most path-bill surprises are in-network, in-pocket, and lawful.

The No Surprises Act doesn't fix this. The NSA's facility-provider protection only triggers in hospitals, ASCs, and emergency departments, and an office-based skin biopsy doesn't meet that trigger. The College of American Pathologists' 2022 letter to CMS names the structural problem: "pathologists are not the initiator of the tissue or fluids submitted for diagnosis, and will know neither what will be submitted nor what will need to be done until the pathologist has reviewed the original specimen(s)." A dermatopathologist can't quote a price before they look at the slide because they don't know whether it's an 88304, 88305, or 88307. The transparency framework that fixed anesthesia surprise bills was built for a setting derm path doesn't operate in.

In-house dermpath actually amplifies the problem unless the comms infrastructure catches up. The volume math gets quoted often: ~4,000 specimens/year is the floor for slide-prep economics, and 8,000 to 10,000 slides/year produces a roughly six-month payback on the equipment investment, per Dermatology Times. A built-out lab runs $350,000 to $550,000 in capital outlay, ~200 sq ft of dedicated space, and a histotech salary around $77,000. The math works if the volume is there. But the practice now bills the patient for both the technical and professional component, so the same patient who used to receive one outside-lab bill now receives two clearly-practice-branded bills. Without a financial-policy update and a result-delivery script to match, the second statement reads to the patient like a duplicate of the first one, and the practice fields the dispute call instead of getting paid.

The practices that have figured this out aren't waiting for a regulator to mandate it. Tareen Dermatology's financial policy tells patients upfront that "you may receive a statement for your office visit and procedure before receiving a statement that includes any related pathology service charges," that biopsy charges run "$180-$220 for each biopsy" with separate pathology charges of "$100-$600," and that an HDHP patient who has not met a deductible "should plan on owing in the neighborhood of $280-$820 per biopsy." The same disclaimer paragraph, near-verbatim, now appears on the GFE pages of Aesthetic Dermatology Associates, North Dallas Dermatology, Compassion Dermatology, Forefront, and at least four other groups. The industry has implicitly admitted in its legal language that this is the surprise patients need to be warned about by name. Most practices have not yet matched that admission with a patient-facing communication script.

The federal regulatory perimeter is also tightening. Self-pay and uninsured patients have a Good Faith Estimate right at scheduling or within three business days of request, with civil monetary penalties up to $10,000 per violation and a $400 patient-provider dispute resolution threshold. CMS has kept the co-provider GFE piece under enforcement discretion, but the convening-provider rule on your own office services is live today.

State law and OIG guidance add another layer. California's anti-markup statute prevents marking up an outside lab's charge, New York's direct-bill rule requires the lab to bill the patient directly, and Florida's patient brokering statute gives state prosecutors a separate hook into per-specimen TC arrangements. OIG Advisory Opinion 23-06, issued September 2023, named dermatology specifically when warning that fair-market-value per-specimen TC payments can still implicate the Anti-Kickback Statute. It's an advisory opinion, not statute, but it's the OIG telling derm where it's looking.

Clarity RCM manages revenue cycle for 200+ dermatology practices across 42 states. It's all we do. See how we work.