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Industry Insights

The importance of TC Modifiers in Pathology Professional Component Billing

By: Dyana Williams, RCM Client Engagement Manager

As we continue to optimize our clients’ billing practices, it is crucial to ensure they have a clear understanding of the use of the TC (Technical Component) modifier, especially in situations where a pathology group bills only the PC (professional component) and is not directly employed by the hospital.

Typically, these services are billed with the -26 modifier (PC) in alignment with industry standards, College of American Pathologists (CAP) guidelines, and CPT directions. To ensure accurate billing and reimbursement, it is crucial that the hospital bills separately for the technical component using the TC modifier. Despite a common perception that hospitals universally represent only the technical portion of a procedure, the application of the TC modifier is critical in providing a clear breakdown of services and adherence to billing regulations.


Why Use the TC Modifier?

  1. Standardization with CPT Guidelines:
    • The TC modifier aligns with the American Medical Association’s (AMA) guidelines in the Current Procedural Terminology (CPT), providing a standardized approach to distinguish between the professional and technical components of a procedure.
  2. Compliance with CMS Standards:
    • The Centers for Medicare & Medicaid Services (CMS) recognizes the importance of accurately reflecting both professional and technical components in billing. Utilizing the TC modifier ensures compliance with CMS standards, preventing potential issues related to reimbursement.

Key Considerations for Hospital Administrators

  1. Risk of Reimbursement Issues:
    • Overpayments to the facility, as determined by the payer’s globally billed services allowance rather than the limited TC amount, are likely to occur—especially with commercial health plans. This circumstance exposes the hospital to potential claw-backs and raises concerns about potential breaches of contract.
    • Health plans are actively recouping payments previously made to independent pathology groups. This occurs when they identify that the hospital claim for overlapping services was billed and compensated at the global rate. Consequently, negotiations and settlements between the hospital and the pathology group become necessary, as health plans typically do not facilitate repayment.
  2. Compliance Concerns, Especially with Medicare:
    • Non-compliance with CMS guidelines, including the absence of the TC modifier, can lead to compliance concerns. Aligning with Medicare requirements is crucial to maintaining compliance and avoiding potential penalties.
  3. Increased Administrative Healthcare Costs:
    • Hospitals are confronted with heightened administrative challenges due to the necessity of submitting corrected claims. This imposes a considerable burden on the hospital, resulting in elevated costs for the hospital, the payer, and the independent pathology group in accurately reprocessing and managing these claims.
  4. Action Steps for Hospital Administrators:
    • Review Billing Processes: Ensure that the hospital’s billing processes align with CPT guidelines, specifically regarding the use of the TC modifier.
    • Collaborate with Pathology Group: Foster open communication with independent pathology groups to understand their billing practices and ensure alignment with CMS standards.
    • Training and Education: Provide training and education for billing staff to raise awareness of the importance of the TC modifier and its impact on reimbursement.


The inclusion of the TC modifier is not only a best practice in billing but also a crucial element in maintaining compliance with industry standards and CMS guidelines. Collaboration between hospitals and pathology groups is key to ensuring accurate billing practices that benefit all stakeholders involved.

Contact us today for a free consultation to learn more about how our team can optimize your coding practices to help reduce denials and increase your overall revenue.


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