Pathology/Lab Coding Alert

If approved, CMS' Medicare Physician Fee Schedule proposal could cost pathologists 11 percent on their highest-volume service: 88305 (Level IV Surgical pathology, gross and microscopic examination). That's just part of the trend, as CMS estimates an overall payment reduction of 6 percent for pathologists and 9 percent for independent laboratories next year.

CMS proposed a 4.4 percent conversion factor reduction for 2003, which would decrease Medicare physician payments across the board. But coupled with a decrease in relative value units (RVUs) for many services, the hit may be even greater, depending on your lab's particular mix of services.

Whether the full reduction materializes depends in part on Congress as it considers legislation that would require Medicare to change the way it calculates conversion factor updates. Also critical is CMS' proposal to change the RVU calculation method subtract the professional component fee from the global fee to derive the technical component rather than adding the components to derive the global fee. Under the new method, TC of pathology services would see the greatest relative value reduction.

You can access the proposed rule by selecting Centers for Medicare and Medicaid Services at the address http://www.access.gpo.gov/su_docs/fedreg/a020628c.html. CMS is accepting comments until Aug. 27 and will publish the final rule in the Federal Register in November 2002. The Medicare Physician Fee Schedule does not affect payment for tests made under the Clinical Diagnostic Laboratory Fee Schedule.