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Add-ons, consults spared cuts in proposed fee schedule: Dip in revenue, many technical component codes in for a hit

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Kevin B. O’Reilly

August 2016—The proposed Medicare physician fee schedule for 2017 features a slight dip in overall revenue for pathology groups and independent laboratories, but payment for flow cytometry and the technical components of prostate biopsy and surgical pathology work could fall by double-digit percentages if the Centers for Medicare and Medicaid Services stands pat with its final rule later this year.

Overall, the CMS estimates zero pay impact from changes to work and malpractice relative value units for pathologists on charges of $1.1 billion or for independent labs on charges of $701 million. However, the agency predicts an overall two percent drop in practice expense RVUs for path-ologists and a five percent decline for independent labs. That follows an eight percent hike in aggregate pay in the 2016 fee schedule. (The CMS’ proposed physician fee schedule, published July 15, can be found at https://federalregister.gov/a/2016-16097.)

Yet there are signs the CAP’s efforts to communicate with the CMS directly and advocate for the value of pathologists’ work through the AMA/Specialty Society Relative Value Scale Update Committee have had an impact in reversing earlier moves to cut Medicare payment for outside microslide consultations and add-on services such as immunohistochemistry, immunofluorescence, and fluorescence in situ hybridization.

In a July 14 CAP webinar, Council on Government and Professional Affairs chair Emily Volk, MD, MBA, noted the CMS has targeted 47 percent of pathology CPT codes for re-evaluation since 2006. Despite that intense scrutiny, Medicare pay for pathology codes has increased 51 percent during that time period.

“Over the last 10 years, there has been a 51 percent increase for path-ologists, a 33 percent increase for pathologists billing with independent laboratories, and a 44 percent increase overall,” Dr. Volk said during the webinar, which is available for viewing at http://bit.ly/mpfs2017webinar (registration required). “Perhaps not all of you have felt a 51 percent increase in your take-home pay, but the physician fee schedule includes payments through CMS only and does not include the clinical laboratory fee schedule payments and does not include private payers. However, we do understand that CMS has tre­mendous influence over what private payers do. And I just want to point out the work that CAP advocacy and our advocacy staff and volunteer members are doing in the arena of payment, in protecting the value of our services.”

Dr. Volk

One area where greater cuts were averted was in pay for add-on services, which “have been a bone of contention between CAP and other pathology organizations and CMS,” said W. Stephen Black-Schaffer, MD, vice chair of the CAP’s Economic Affairs Committee.

“They [CMS] have wanted to apply a model, which may or may not work outside of pathology, to pathology services,” Dr. Black-Schaffer said. The agency wanted to pay a substantial discount for additional slides examined in immunohistochemistry, immunofluorescence, or in situ hybridization work under the assumption “that there must be a substantial efficiency in looking for the second item.”

“We have argued, and they have partially accepted at this point, that there is a de minimis increase in efficiency of looking for second and subsequent stains,” he added.

The CMS currently applies a 24 percent discount from the first slide for add-on services in these areas. The proposed discount is 20 percent for 2017. While that may not seem like much, it will add up.

Dr. Black-Schaffer

“Even this change of four percent less discounting resulted in a nearly $3 million projected payment increase to pathologists from Medicare based on the Medicare payment volume,” Dr. Black-Schaffer said. “And the valuation of these codes is often reflected by payers beyond Medicare, so we anticipate this will be a benefit to pathologists even in their non-Medicare business.”

Of the $2.93 million in added pay for pathologists nationwide, $2.75 million can be attributed to just one code, 88341, used to bill for subsequent IHC slides. The 20 percent discount for add-on services is still “overstated,” Dr. Black-Schaffer said, and he and other CAP leaders “anticipate that CMS will continue to work with us on this matter.”

The CMS also targeted pathology consultations and reports on referred slides prepared elsewhere. The agency proposed to cut the TC payment for code 88323, for example, by 19 percent and the global payment for the code by seven percent. But the payment for 88325—“consultation, comprehensive, with review of records and specimens, with report on referred material”—will rise nine percent to $189.97.

“This is the sort of thing that has been very well supported by the other members of the AMA-RUC,” Dr. Black-Schaffer tells CAP TODAY. “Many physicians raised their hands and spoke up about how absolutely necessary it was to have access to expert opinions from pathologists they knew and trusted in their particular referral centers before they took action, or didn’t take action, based on problematic diagnoses.”

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