Advocacy Update

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Special Report: July 29, 2019

In This Issue:

For 2020 payment changes to pathology services, the Medicare program proposed to accept recommendations to address errors in pathology practice expense cost data as identified by the CAP.

While the Centers for Medicare & Medicaid Services (CMS) accepted the recommendations, other policies will have an adverse effect on reimbursement for pathologists in future years. In the proposed 2020 Medicare Physician Fee Schedule released July 29, the CMS estimated the 2020 changes would result in no overall decrease or increase to pathology payment compared to the 2019 fee schedule. However, the agency estimated that in 2021, pathology could see an overall 8% decrease in payment due to significant changes altering coding and payment for evaluation and management services. The overall impact on an individual pathologist in both the 2020 and 2021 estimates would depend on a physician’s case mix.

The proposed physician fee schedule payment received by independent laboratories is also estimated to increase by 1% in 2020 due to further refinements of practice expense direct costs. This increase would impact the technical component and global payment for pathology services. The CMS noted that for independent laboratories, they do receive approximately 83% of their Medicare revenue from clinical laboratory services paid under the clinical laboratory fee schedule (CLFS), which are not included in this impact analysis.

Review all the proposed changes to pathology services in our proposed 2020 Medicare Physician Fee Schedule Impact Table. The proposed 2020 conversion factor used for the fee schedule’s payment formula is $36.0897, which represents a 0.14% increase from the 2019 conversation factor.

Proposed 2020 Medicare Physician Fee Schedule

Through its ongoing work to protect the value of pathologists services, the CAP recommended physician work relative value units (RVUs) used to calculate the professional component. The CAP also developed direct practice expense inputs for pathology services, which impact payment for the technical component.
The CAP recommended and the AMA RUC agreed to maintain the current physician work RVU of 0.42 for the following cytopathology screening services. However, the CMS disagreed and recommended decreases to 0.26 physician work RVU to the following services:

  • Cytopathology, cervical or vaginal (any reporting system), requiring interpretation by a physician (88141)
  • Screening cytopathology, cervical or vaginal (any reporting system), collected in preservative fluid, automated thin layer preparation, requiring interpretation by a physician (G0124)
  • Screening cytopathology smears, cervical or vaginal, performed by an automated system, with manual rescreening, requiring interpretation by a physician (G0141)
  • Screening papanicolaou smear, cervical or vaginal, up to three smears, requiring interpretation by a physician (P3001)

Repricing of Pathology Direct Practice Expense Repricing

In an ongoing effort to correct errors affecting Medicare reimbursements for pathology services, the CMS proposed to update 36 direct practice expense supplies and equipment prices. Twenty-four of these prices increases are due to the direct work of the CAP’s engagement to correct previous errors by the CMS. These prices largely account for the technical component of many pathology services and are also reflected in global payment rates. For example, due to these updates in prices, the technical component of CPT code immunofluorescence services, 88346 and 88350 may increase by 22% and 31% respectively.

Evaluation and Management (E/M) Services Changes Estimated to Result in Potential Eight Percent Cut to Pathology in 2021

Last year, the CMS delayed implementation of any changes to coding and payment for E/M services until 2021. The CMS stated that the delay would allow the agency to work with the AMA and stakeholders to consider any changes made to CPT coding and valuation of new or revised codes.

In this proposed rule, the CMS agreed to implement in 2021 changes developed by the AMA E/M workgroup. Specifically, the CMS will align coding with changes laid out by the CPT Editorial panel. Moreover, the CMS will adopt the AMA-RUC approved values for the office/outpatient E/M visit codes for 2021 and the new add-on CPT code for prolonged service time. The AMA RUC-recommended values would increase payment for office/outpatient E/M visits. 

The CMS estimated that in 2021, pathology payment could decrease by 8% overall as a result of the E/M changes, and due to the CMS’ budget neutrality payment policies together with E/M utilization rate by pathologists. The CMS stated that the impact estimates are for illustrative purposes to provide insight into the magnitude of potential changes for specific specialties. Pathology and other specialties that do not generally bill office/outpatient E/M codes are estimated to see the greatest decrease in payment in 2021.

The relative value unit (RVU) of each code on the Medicare Physician fee schedule is budget neutral. Current law requires that increases or decreases in RVUs may not cause the amount of expenditures for the year to differ by more than $20 million. If this threshold is exceeded, the CMS makes adjustments to preserve budget neutrality. Therefore, an increase in the RVUs of the E/M services will reduce the RVUs for all other services, such as pathology.

The CAP will analyze in detail the provisions included in the proposed regulation and will submit comments to the CMS by September 27, 2019.

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Also, on July 29, the CMS published it’s 2020 Quality Payment Program (QPP) proposals for Year 4 of the program. Nearly all pathologists will be required to participate in Medicare’s QPP either through Alternative Payment Models (APMs) or the Merit-based Incentive Payment System (MIPS).

The CAP engaged with the CMS to develop ways to reduce the reporting burden of complying with MIPS, to make the program more flexible, and to ensure that pathologists have enough reporting measures and are able to achieve full points in each reporting category.

2020 MIPS Reporting for Pathologists

In 2020, most pathologists will have to take action to avoid penalties that reduce future Medicare Part B payments for their services.

A physician’s performance in MIPS in 2020 affects Medicare Part B payments in 2022. Per the Medicare statute, the CMS will adjust physician payment by +/-9% in 2022 based on performance in 2020. In its proposed 2020 QPP regulations, the CMS wants to maintain many of the requirements from the 2019 Performance Year in 2020, including low volume thresholds, policies for opting in or voluntarily reporting for MIPS, and definitions regarding non-patient facing and facility-based clinicians. However, the CMS specifically proposed for 2020:

  • Pathology Quality Measures: In the proposed rule, the CMS explicitly stated that “Four out of the five quality measures within the pathology specialty set [were] identified as extremely topped out in the 2019 benchmarking file. However, we believe that it is important to retain these pathology specific measures in the MIPS quality measure set to ensure that pathologists have a sufficient number of quality measures to report.” Despite that, there is some conflicting information about the inclusion or removal of CAP-developed quality measures. The CAP will seek clarification from the CMS regarding which measures are available for reporting in 2020, including which measures will comprise the Pathology Specialty Measure Set.
  • Increased data reporting requirements: In general, the CMS ramped up requirements, including a proposal to increase data completeness for quality measures to 70% from the current 60%. Clinicians or groups not meeting the data completeness requirements will receive 0 points unless they are in a small practice of 15 or fewer clinicians.
  • Increased points to avoid a penalty: The CMS will continue to incrementally increase the performance threshold to meet the requirements established by Congress. For 2020, the CMS proposed to increase the Performance Threshold to 45 points from the 30-point threshold in 2019. Clinicians will have to score above this threshold to be eligible to receive positive payment adjustments. The CMS also proposed to increase the eligibility for the $500 million bonus pool to 80 points.
  • Increase the number of clinicians participating in a group’s Improvement Activities: The CMS proposed to increase the participation threshold for group reporting from a single clinician to 50% of the clinicians in the practice.

Through the years, the CAP advocated to reduce the quality reporting burden and increase flexibility for pathologists in a way that recognizes and accounts for the value of the pathologist’s role in patient care. The CAP actively worked with the CMS to demonstrate the need for more appropriate and alternate measures and improvement activities for pathologists for them to more fully participate in MIPS. Indeed, the proposed rule explicitly encourages that pathologists consider reporting on pathology-specific Qualified Clinical Data Registry or QCDR measures through a pathology-specific registry like the Pathologists Quality Registry.

Signaling Future Changes with MIPS Value Pathways (MVPs)

The CMS also proposed to promote more alignment of the MIPS categories via a new proposal for MIPS Value Pathways or MVPs. The MVP framework would align and connect measures and activities across the Quality, Cost, Promoting Interoperability, and Improvement Activities performance categories of MIPS for different specialties or conditions. A clinician or group would be in one MVP associated with their specialty or with a condition, reporting on the same measures and activities as other clinicians and groups in that MVP. The CMS included a Request for Information in the proposed rule and foresees proposals for MVPs beginning with the 20201 performance year.

Alternative Payment Models 

For those pathologists who practice in an Alternative Payment Model (APM), the proposed 2020 QPP rule provides more details on how the agency will incentivize those who participate in APMs outside of Medicare, starting in 2020.

To determine the APM entity status, the CMS proposed to amend the definition of expected expenditures for both Advanced APMs and Other Payer Advanced APM criteria, which will impact how financial risk is calculated under these models. The CMS will also make adjustments to the Partial Qualifying Participant determination, so that clinicians may still receive a positive MIPS payment adjustment earned through a different TIN/NPI combination. Finally, the CMS proposed revisions that address situations where an APM entity terminates from an Advanced APM.

The CAP has previously supported changes that facilitate more APMs achieving Advanced APM status and that provide additional opportunities for appropriately-developed physician-focused payment models. The CAP will analyze in detail the provisions included in the proposed regulation and will continue to advocate for pathologists’ ability to participate meaningfully in innovative payment models, including urging the CMS to increase opportunity and incentives for specialty physician involvement.

The CAP will analyze in detail the provisions included in the proposed regulation and will submit comments to the CMS by September 27, 2019.

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The CMS also released the Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) proposed regulation. This regulation builds off earlier price transparency requirements by requiring hospitals to make public their “standard charges,” as well as payer-specific negotiated charges for common shoppable services.

The CMS stated that in its price transparency proposals, along with the Procedure Price Lookup tool, would allow patients to compare Medicare prices for procedures done in hospital outpatient departments and ambulatory surgery centers. This price transparency would give patients the ability to compare out-of-pocket costs across different settings of care, and would allow patients to work with their clinicians to choose the setting that best meets their needs.

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