Pathology/Lab Coding Alert

Keep focus on ICD-10, too.

You’ve waited with bated breath for the last time to see if your Medicare pay would suddenly crash and burn with the Sustainable Growth Rate (SGR) formula.

After 17 Congressional payment “patches” since 2002 to halt the payment nosedive (such as the 21 percent cut slated for April 1), Congress finally acted to eliminate SGR in favor of a different way to calculate Medicare pay.

“No more will we be kicking the can down the road with another temporary ‘fix’ to the SGR rate,” said U.S. Senator Ben Cardin (D-Md.), a member of the Senate Finance Subcommittee on Health Care, in a statement.

Read on to see how the law, known as the Medicare Access and CHIP Reauthorization Act (MACRA), will impact your pay in the near- and long-term.

Expect Pay Initial Pay Boost, New Model

For now, you’ll receive Medicare payment at the same rate you’ve been getting since Jan. 1. But come July 1, you can expect to see the first of several 0.5 percent increases.

MACRA gives 0.5 percent annual boosts to Medicare pay for five years through 2019, after which practitioners would get bonuses based on quality of care rather than the number of procedures they administer.

Here’s how it works: The bill calls for consolidating three current incentive programs — PQRS, EHR meaningful use, and the value-based modifier program — into a new Merit-Based Incentive Payment System (MIPS). The new MIPS will encourage other payment models such as accountable care organizations (ACOs), to incentivize quality medical care.

“Starting in 2026, we would see two conversion factors, one that applies to providers that participate in advanced payment models such as an ACO, with a 0.75 percent annual update. A second conversion factor with a 0.25 percent yearly increase would apply to providers who do not participate in advance payment models,” explains Michael A Granovsky MD, FACEP, CPC, President of LogixHealth, a national coding and billing company.

“Passage of this historic legislation finally brings an end to an era of uncertainty for Medicare beneficiaries and their physicians — facilitating the implementation of innovative care models that will improve care quality and lower costs,” said James L. Madara, MD, AMA Executive Vice President and CEO, in a statement.

Prepare for Other Changes

Unlike last year’s SGR legislation, Congress did not add a delay to ICD-10 implementation. Last year’s postponement was the third delay in six years, and industry experts were concerned that Congress would delay the code set again this year.

Be ready: There is no further ICD-10 delay stipulations in the legislation this year, which means your lab needs to be ready for the Oct. 1 implementation deadline.

MACRA contains other provisions that could impact your lab, such as the following:

• Means testing: MACRA’s cost is about $200 billion over the next decade, and the law allows Medicare to pass some of that cost on to higher-earning beneficiaries in the form of increased Part B and Part D premiums.

• GPCI extension: This provision extends until Jan. 1, 2018, the existing 1.0 floor on the geographic practice cost index (GPCI) work component of physician fees in areas where labor cost is lower than the national average.

• CHIP extension: The Children’s Health insurance program (CHIP) covers more than 8 million children and pregnant women in families that earn income above Medicaid eligibility levels. While the CHIP program is authorized through 2019, no new funding is available after fiscal year 2015. This provision preserves and extends CHIP, funding the program through fiscal year 2017.