Pathology/Lab Coding Alert

Conversion factor relief is just the beginning.

Following the outcry over impending Medicare payment cuts for 2023, the fed acted at the end of 2022 to offer healthcare providers an olive branch.

Action: On Dec. 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023 (CAA) into law, offsetting impending 2023 Medicare payment cuts.

Study the following four items included in CAA that will help your lab’s bottom line this year.

See Conversion Factor (CF) Relief

Last year, Medicare finalized cutting the 2023 CF by 4.5 percent, from $34.61 to $33.08. Instead, the CAA offers a two-pronged approach spanning two payment cycles. “The bill would offset the planned cuts by more than 2 percent, providing a 2.5 percent positive adjustment to the CF for calendar year (CY) 2023, and a 1.25 percent positive adjustment to the CF for CY 2024,” explains McDermott+Consulting, an affiliate of law firm McDermott Will & Emery, in a bill summary.

Not enough: Stakeholders weren’t impressed. “The AMA is extremely disappointed and dismayed that Congress failed to prevent Medicare cuts next year, threatening the financial viability of physician practices and endangering access to care for Medicare beneficiaries,” says Jack Resneck Jr., MD, president, American Medical Association (AMA) in a release. “This 2 percent cut following two decades of flat payment rates will have consequences on health care access for older Americans. High inflation compounds the threat to practice viability because physicians are the only Medicare providers without annual inflation-based updates,” he adds.

Expect Delay of PAYGO Cuts

The CAA offers some relief from the scheduled Pay-As- You-Go (PAYGO) Medicare sequester by preventing the cuts in 2023 and 2024.

“The Statutory PAYGO requires that automatic payment cuts of 4 percent be put into place if a statutory action is projected to create a net increase in the deficit over either five or 10 years,” according to McDermott+Consulting. In fact, “the PAYGO sequester has never actually been implemented despite being triggered on multiple occasions,” it notes.

Last December, Congress postponed PAYGO cuts for a year in its omnibus spending package. Based on CAA, that relief will now last two years.

“The CAA 2023 would ‘wipe the PAYGO scorecard clean’ for FY 2023 and FY 2024,” McDermott+Consulting states. But “Congress likely will have to contend with PAYGO obligations again in two years,” it cautions.

Look for MACRA Opportunity

Providers can opt for the higher incentive payment route under MACRA — Advanced Alternative Payment Models (APMs). One of the omnibus bill provisions extends the incentive payment boost, which was scheduled to end in 2022, for providers who choose the Advanced APM track through the 2023 performance year/2025 payment year.

Caveat: Though the extension is helpful, the legislation reduces the incentive bonus to 3.5 percent for providers who qualify for it, instead of 5 percent, which is what it was set at in previous payment years.

Get PAMA Reprieve

The CAA provides a further delay in data reporting requirements and payment reduction freeze under the Protecting Access to Medicare Act (PAMA).

Context: PAMA requires applicable laboratories to report to Medicare on a prescribed schedule, data on test usage and payment from commercial payers, which Medicare then uses to set the Clinical Laboratory Fee Schedule (CLFS) payment rates. The second reporting period was delayed due to the COVID-19 public health emergency (PHE), and Medicare expected reporting in 2023 under modified rules.