Medicare Compliance & Reimbursement

Unless CMS makes changes in the final rule, this is what you can expect.

The Medicare Physician Fee Schedule (PFS) proposed rule doesn't look promising for clinical labs and pathologists. Unless Congress averts the sustainable growth rate (SGR) update for 2013 and the Centers for Medicare & Medicaid Services change their proposed fee schedule, you will probably see your share of the pie shrinking.

Pathologists Lose to Primary Care Physicians

To offset a pay increase to some physicians under the primary care initiative, CMS proposes to decrease pay for all non-primary care physicians, including pathologists. Expect a 1 percent reduction for pathology, according to CMS.

Here's why: CMS is proposing a 7 percent pay increase for family practitioners, and between 3 and 5 percent increases for other primary-care practitioners. "Helping primary care doctors will help improve patient care and lower health care costs long term," said CMS Acting Administrator, Marilyn B. Tavenner in a statement about the proposed PFS.

Don't forget that you're already facing a 1 percent reduction for pathology in 2013 as the final year of the four-year practice-expense (PE) transition. That totals two percent down for pathology.

That's not all: As it has every year since CY 2002, CMS projects a significant reduction in PFS payment rates under the SGR methodology. For CY 2013, CMS projects a reduction of 27 percent. Congress has acted to avert the cuts every year since 2003, however. That means the waiting begins now to see if the 27 percent reduction materializes.

Expect Lab Cuts Too

Labs can anticipate a 4.95 percent payment cut in 2013 for tests paid on the clinical laboratory fee schedule (CLFS), based on current law. Look at the following adjustments to see how it adds up:

• 2 percent cut passed by Congress to help pay for 2012 PFS fix
• 2 percent reduction in lab fee schedule payments over 10 years as part of the 2011 deficit reduction deal
• Net 0.95 percent cut based on the health care reform law fee schedule update formula that includes a 1.75 percent cut each year from 2011 through 2015 and a positive consumer price index adjustment (1.7 percent) minus a productivity adjustment (currently 0.9 percent).