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Medicare Increase for Pathologists in 2016 Proposal Reflects CAP Recommendations

The Centers for Medicare & Medicaid Services (CMS) proposed to support increases sought by the CAP for pathology services – including immunohistochemistry, in situ hybridization, and immunofluorescent studies—in its proposed 2016 Medicare Physician Fee Schedule regulation on July 8.

The CMS proposes to update payment rates based on the CAP and American Medical Association (AMA) Specialty Society's Relative Value Update Committee's (RUC's) practice expense (PE) recommendations, but the CAP will continue to be engaged with the Medicare agency as necessary. After clarifying the recommendations with the agency, the CAP is pleased that the CMS is now proposing to accept the majority of the RUC's PE recommendations for immunohistochemistry, in situ hybridization, and immunofluorescent studies.

Overall Impact on Pathology Shows 8% Increase

The CMS states in the proposed rule that several specialties, including pathology and independent laboratories, will experience significant increases in payment resulting from the Misvalued Code Initiative, including the establishment of RVUs for new and revised codes. The CAP actively engaged with the agency to address concerns associated with pathology services identified through the Misvalued Code Initiative as potentially overvalued. The CMS also identifies additional questions regarding the components that make up payment for pathologist services, and continued engagement with the agency will be necessary to address outstanding concerns.

Specifically, the CMS’ estimated impact on specialties based on the changes included in the proposed rule would result in an overall increase of 8% for pathology services. This estimate would impact overall payment to pathologists by a 4% increase based on the changes to the work relative value units used to calculate the professional component of pathology services as well global payment. The impact on changes to the practice expense used to calculate the technical component as well as global payment resulted in a 4% increase in pathology payment.

The physician fee schedule payment received by independent laboratories is estimated to increase by 9% in 2016. One percent of this increase is attributed to changes in the physician work values, and 8% is attributed to changes in the practice expense values.

This impact does not include additional changes anticipated when the CMS releases the 2016 final rule. For instance, the CMS requested to review payment for G0416, a bundled code for pathology review of prostate biopsies.

Register for the CAP's July 14 Webinar

Learn more about these and other changes by attending the CAP's July 14 webinar "Understanding the 2016 Medicare Physician Fee Schedule Proposed Rule." The webinar was rescheduled to July 14 after the Medicare rule's release was delayed. Those who registered should have received an email from GoToWebinar about the change. If you've already registered for the webinar, you do not need to register again.

Throughout this hour-long panel discussion, CAP experts will explain the changes proposed by the CMS regarding the 2016 fee schedule. Register for this complementary webinar presentation to attend. And, if you are unable to participate during the live webinar on July 14 at 1 PM ET, please still register and you will receive an email following the presentation to access the archived version.

Download the CAP's Impact Table

The CAP has provided an initial impact analysis table of pathology services by comparing the proposed 2016 fee schedule changes to 2015 Medicare rates.

Specific Pathology Services

The CAP requested refinements on the physician work of several pathology services in the 2015 final rule. The CMS had discounted the add-on services for immunohistochemistry and in situ hybridization services from the original RUC recommended work RVUs, based on flawed assumptions.

The CAP advocated for acceptance of the RUC recommendations and stated for most pathology services, the difference in physician work from the base code to the add-on service is diminutive. The CMS made no mention of the work RVUs of these services in the text of the ruling, however the agency published increased values reflected in the impact table.

In addition, CMS proposed that the following pathology services are potentially misvalued and subject to further review:

CMS Proposes to Maintain Quality Reporting Options

The CMS proposed to retain the eight pathology measures developed by the CAP, and continue claims, registry, and electronic health record reporting mechanisms under the Physician Quality Reporting System (PQRS) program in 2016.

A -2% payment adjustment would be applied to 2018 Medicare payments for individual eligible provider or group practice who do not satisfactorily report or participate in PQRS in 2016. Eligible providers who successfully participate in PQRS would not be penalized.

Like the PQRS program, the Medicare's value-based modifier (VBM) would apply to all eligible physicians in 2018 based on 2016 performance. Under the modifier program, bonus payments and penalties are assessed based on performance on quality and cost measures. The 2018 VBM penalty for unsuccessful participation in the PQRS would be maintained at 4% for groups of 10 or more eligible providers and 2% for solo practitioners or groups with two to nine eligible providers; the bonus would also be maintained at 4% for high quality, low cost providers.

The PQRS and VBM programs are set to expire after 2018, the CMS stated. In 2019, Medicare will transition to the new Merit-Based Incentive Payment System (MIPS) that was created in the law repealing the sustainable growth rate (SGR) formula in April. The CAP will continue to engage accordingly as the CMS implements the new physician payment incentive provisions included in the new law.

2016 Proposed Hospital OPPS Rule

The proposed 2016 Hospital Outpatient Prospective Payment System (OPPS) rule was released prior to the fee schedule on July 1, 2015. The OPPS continues to apply to payment of technical component of physician professional services.

Certain services continue to be excluded from the OPPS, including "professional services of physicians and nonphysician practitioners paid under the Medicare fee schedule and certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS)". The CMS proposed several changes to both the rate-setting and conditional packaging methodologies that will not affect the professional component but will have varied effects on hospital payment for the technical component.

Under these changes, any current or future molecular services, as well as laboratory preventive services, will be excluded from packaging and will be paid separately. However, the CMS has proposed to expand the packaging policies to cover certain other pathology and laboratory services.

The CAP will report more details about the proposed Medicare rules in future editions of STATLINE.