Pathology/Lab Coding Alert

Proposal for cap at OPPS levels tabled — for now.

Your anatomic pathology practice can expect lower payments for many services in 2014 thanks to the latest Medicare Physician Fee Schedule (MPFS).

The MPFS final rule with comment period, published in the Dec. 10, 2013 Federal Register (www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR), holds some good news and some bad news for pathologists, along with a ruinous pay cut for all physicians, unless Congress acts to avert it.

Read on to discover which changes you can expect to impact your bottom line.

Worst News Might ‘Go Away’

The 2014 MPFS final rule confirms that the conversion factor (CF) is steeply slashed by 20.1 percent to 27.2006 as of Jan. 1, 2014. That’s down from the 2013 CF of 34.0230. But it could have been worse — the proposed fee schedule had predicted a bigger cut to $26.7109.

By law, CMS must set the CF according to the sustainable growth rate (SGR) formula, which results in these large cuts each year. According to the final rule, “these reductions can only be averted by an Act of Congress.” That means that, as in prior years, your pathology practices will have to keep your collective fingers crossed that Congress votes to increase the CF so that you don’t face such severe cuts. No Congressional action was taken as of press time.

While Congress has provided temporary relief from these reductions every year since 2003, physician advocacy organizations are understandably tired of the annual waiting game to fix the CF. The American Medical Association (AMA) urged Congress to repeal the current SGR formula as soon as possible so this problem can be rectified.

Advocacy: “The AMA has heard the nation’s physicians and we’re pulling out the stops to get Congress to act and take a fiscally responsible course that will stop the annual cycle of draconian Medicare cuts and short-term patches,” said AMA President Ardis Dee Hoven, MD at the AMA’s Nov. 18, 2013 meeting. “Now is the time to move past the annual SGR crisis and toward a Medicare program that ensures access to high-quality and efficient health care for patients and a stable practice environment for physicians.”

Look for Pathology RVU Cuts, Too

Even if Congress acts to avert the 20.1 percent pay cut, your pathologists can still expect to face payment reductions under the 2014 MPFS.

Based on an estimated volume and mix of services that different specialties provide, the MPFS projects how adjustments to the fee schedule (not linked to the CF) will impact payment in 2014. The estimates for pathologists and independent labs follow, based partly on adjustments to Relative Value Units (RVUs) for representative services.

Pathologists: Expect a negative 6 percent overall impact:

• Work and malpractice RVU changes account for negative 4 percent
• Practice expense RVU changes account for negative 2 percent.

Independent labs: Expect a negative 5 percent impact, overall:

• Work and malpractice RVU changes account for negative 2 percent
• Medicare Economic Index adjustments account for negative 3 percent.

Bright spot: These reductions are not as extreme as they would have been if CMS had gone through with its proposal to cap MPFS payment at Outpatient Prospective Payment (OPPS) rates (see following section for full discussion). That action would have reduced independent lab pay by 25 percent, and pathologist pay by 6 percent, according to CMS estimates.

To help you see how the changes might impact your practice, look at some of the notable global payment changes for pathology services in the following list:

• 88112 — Cytopathology, selective cellular enhancement technique with interpretation (e.g., liquid based slide preparation method), except cervical or vaginal: -45percent
  
• 88121 — Cytopathology, in situ hybridization (e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 molecular probes, each specimen; using computer-assisted technology: -9 percent
  
• 88304 — Level III - Surgical pathology, gross and microscopic examination: -8 percent
  
• 88307 — Level V - Surgical pathology, gross and microscopic examination: -8 percent
  
• 88312 — Special stain including interpretation and report; Group I for microorganisms (e.g., acid fast, methenamine silver): -8 percent
  
• 88313 — … Group II, all other (e.g., iron, trichrome), except stain for microorganisms, stains for enzyme constituents, or immunocytochemistry and immunohistochemistry: -8 percent
  
• 88331 — Pathology consultation during surgery; first tissue block, with frozen section(s), single specimen: -5 percent
  
• G0416 — Surgical pathology, gross and microscopic examination for prostate needle biopsies, any method; 10-20 specimens (revised 2014 definition): -26 percent.
  

These reductions are not as extreme as 2013, when payment for surgical pathology exam codes (88300-88309) alone decreased by 26 to 48 percent.

Exhale: OPPS-Cap Proposal Withdrawn

Although the MPFS proposed rule recommended using OPPS and Ambulatory Surgical Center (ASC) rates in developing PE RVUs, CMS stated that the agency would not finalize the proposed policy at this time.

Proposal impact: The proposal would have capped 39 pathology services at OPPS rates, cutting the technical component (TC) payment for these services by up to 76 percent.

Not surprisingly, CMS stated in the final rule that the “overwhelmingly majority of commenters objected to the proposed policy.”

For instance: “We do not support CMS’s proposed update methodology, based on concerns related to statutory and regulatory mandates,” stated Joel Shilling, MD, FASCP, president of the American Society for Clinical Pathology (ASCP), and Alfred W. Campbell, MD, FASCP, president, of the American Pathology Foundation (APF) in an open letter to CMS concerning the proposal.

Look out: Although CMS tabled the proposal in the 2014 final rule, this issue might not be over. “After further consideration of the comments, we expect to develop a revised proposal for using OPPS and ASC rates in developing PE RVUs which we will propose through future notice and comment rulemaking” CMS stated in final rule.