Pathology/Lab Coding Alert

Only an act of Congress can save the day.

You might be experiencing little change in Medicare pay this January, thanks to a stipulation in the Protecting Access to Medicare Act of 2014 (PAMA) that halts sustainable growth rate (SGR) cuts until April 1, 2015.

But the ticking SGR time bomb, along with aggregate RVU changes that bode well or ill for service providers depending on their specialty, could mean that your lab or pathology practice’s financial outlook is not that stable after all.

Read on to see what Medicare pay changes you might expect this year — now and possibly later, too.

Conversion Factor Holds Steady — For Now

Although PAMA promised a flat conversion factor (CF) through March 31, the Physician Fee Schedule (PFS) final rule actually defines a small decrease from the 2014 CF of 35.8228 to 35.7547 for the period of Jan. 1 through March 31, 2015.

Bad news: If Congress does not act before April 1, 2015 to address the SGR formula or institute another temporary “patch,” the CF for Medicare payments will fall by 21.2 percent to 28.2239.

If Congressional tradition holds, that drastic cut will not occur, says Michael A. Granovsky, MD, FACEP, CPC, President of Logixhealth, a national coding and billing company based in Bedford, MA.

“We won’t know until we get closer to April, but it’s likely that Congress could just enact another patch at that time,” predicts Karen Ferguson, senior director of public policy for the American Medical Group Association (AMGA).

Possibility: The final rule gives some hope that a permanent SGR fix may be possible, because for five consecutive years, actual expenditures have been below budgeted allowed expenditures, which would lower the cost of a true SGR fix. That savings may make a permanent fix, rather than a patch, more acceptable to Congress, says Granovsky.

Outlook Varies for Labs, Pathologists

Each year, CMS publishes an estimate of the expected change in payments by specialty, based on the work, practice expense (PE), and malpractice (MP) RVU changes in the PFS. For 2015, the estimate is that pathologists will experience a -1 percent work RVU change, but a +1 percent PE RVU change, for a net zero change.

Independent labs, on the other hand, can expect a 1 percent decrease in overall Medicare payments in 2015, even if the CF holds steady throughout the year.