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November 6, 2018

In This Issue:

The Centers for Medicare and Medicaid Services (CMS) accepted some of the CAP requested payment changes for pathology services in the final Hospital Outpatient Prospective Payment (OPPS) and Medicare ambulatory surgical center (ASC) payment system for 2019 regulation released on November 2.

Site Neutral Payment Policies

The CMS expanded the site-specific physician fee schedule payment rate to include clinic visit services reported under HCPCS code G0463 for all excepted off-campus, provider-based departments in addition to the previously nonexcepted provider-based departments. The CAP advocated against the proposal as “it could result in inadequate payment rates for services furnished in off-campus provider-based departments.” In general, the CAP is concerned, “that utilization programs, prior authorization protocols, and other volume control methods that dictate or limit health care provider decision-making may impinge on the practice of medicine and could improperly encumber and curtail medically necessary clinical laboratory and pathology services.” The CAP emphasized that OPPS packaging policies of pathology add-on services that bundle all add-on services into Ambulatory Payment Classifications base code is extremely restrictive on the provision of pathology services.

In addition, the CMS will limit the expansion of clinical group of services that would be covered as outpatient services for some off-campus provider-based departments. Due to advocacy from the CAP, the CMS did not finalize this proposal and will monitor utilization as the CAP recommended. The CAP opposed the proposal stating, “given that packaging already provides strong incentives to furnish services only when medically necessary and appropriate and as efficiently as possible, any further reduction in payment for these services would likely penalize providers who perform these services when appropriate and necessary in excepted off-campus [provider-based departments].”

Specific Payment Issues

Lastly, the CAP successfully advocated for improved policies to promote more accurate payment for stem cell transplants and a higher payment for blood product P9073 Platelets, pheresis, pathogen-reduced, each unit. Specifically, the CMS agreed to utilize the recommended cross-walk to calculate payment rates for these services.

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On November 1, the CMS finalized several changes to alter which laboratories must report data used to set Medicare clinical laboratory fee schedule (CLFS) payments.

In January 2018, the CMS implemented new rates for tests included in the CLFS. These rates were calculated using a new methodology required by the Protecting Access to Medicare Act (PAMA), which sets clinical laboratory test rates at the median of the price paid by private payors using data collected from certain laboratories. However, the CAP and many stakeholder groups identified flaws in the data collection used to calculate the rates, including the CMS interpretation of the PAMA statute regarding the definition of applicable laboratories subject to data reporting. 

Specifically, the CAP advocated that the definition of the term “applicable laboratory” continues to exclude most hospital laboratories. The CMS’ failure to include a large portion of the laboratory market in payment reporting results in a skewing of the PAMA payment rates and reflects a disproportionate weighting of large commercial clinical laboratories. The CAP said that more complete data collection is necessary to increase the accuracy of the resulting rates.

The CMS acknowledged these concerns in the final 2019 regulation, stating that one of the agency’s goal “is to obtain as much applicable information as possible from the broadest possible representation of the national laboratory market on which to base CLFS payment amounts without imposing undue burden on those entities.” Thus, the CAP supports the CMS’ decision to exclude Medicare Advantage plan payments from total Medicare revenues for purposes of the applicable laboratory definition. The CAP and the CMS think that because of this change, more representative data will be collected from a broader segment of the laboratory industry.

The CMS also sought public comments on potential changes to the low expenditure threshold component of the definition of an applicable laboratory and will consider those comments as they continue to evaluate Medicare CLFS payment policy.

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Following strong concerns from the American Medical Association (AMA), the CAP, and over 170 medical specialties and the CPT Editorial Panel, the CMS delayed proposed coding and payment changes to new and established office visit evaluation and management (E/M) services in the final 2019 Medicare fee schedule. Further, the CMS indicated that the two-year delay will allow for the agency to consider any changes made to the E/M CPT codes by the AMA CPT Editorial Panel as well as any recommendations regarding the valuation for the services.

“The AMA also is grateful that the Administration is not moving forward in 2019 with the payment collapse of E/M codes. A two-year window for implementation of the proposal will give the AMA-convened work group—comprised of physicians and other health professionals —time to make recommendations on this complicated topic,” the AMA stated in a press release.

This advocacy effort resulted in changes as well as a delay in the implementation of coding and payment changes until 2021. These changes include the following:

  • Payment of a single rate for E/M outpatient/office visits levels 2-4
  • Maintaining a separate payment rate for E/M level 5 visits
  • Addition of add-on codes that describe additional resources that could be applied to level 2-4 E/M outpatient/office visit codes
  • Removal of the provision to reduce payment when E/M office/outpatient visits are furnished on the same day as procedures

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The CMS and the CAP collaborated to curate a pathology-specific list of Improvement Activities to assist pathologists with 2018 Merit-based Incentive Payment System (MIPS) reporting. This CMS-CAP co-branded resource is available to CAP members for download and is part of the CAP’s extensive work to help pathologists navigate the complexities of MIPS to succeed in the program.

The Improvement Activities resource helps pathologists participating in MIPS determine which Improvement Activities to attest to in 2018. Pathologists need to attest to one high-weighted or two medium-weighted Improvement Activities, which represent 15% of their MIPS score. The Improvement Activities category rewards pathologists for care focused on coordination, beneficiary engagement, and patient safety.

Out of 113 Improvement Activities, the CAP and the CMS identified 18 activities most relevant to pathologists.

In addition to the Improvement Activities resource, the CAP has a number of other MIPS resources to help pathologists navigate their Medicare payments, including a recorded webinar on Improvement Activities, additional information on 2018 reporting, information about 2018 reporting, and an informational video. If you have any questions regarding Improvement Activities, please email our experts at

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On November 1, the CMS finalized the 2019 Medicare Physician Fee Schedule and Quality Payment Program changes that will impact Medicare pathology payment and services next year. The CAP is offering one of its most popular webinars - 2019 Final Medicare Policy and Payment Changes - where CAP experts will review the final regulation changes on November 9, 2018, at 11 AM ET.

Presenters are:

Donald Karcher, MD, FCAP

Donald S. Karcher, MD, FCAP
Chair of the Council on Government and Professional Affairs

Emily E. Volk, MD, FCAP

Emily E. Volk, MD, FCAP
Vice-Chair of the Council on Government and Professional Affairs
Chair of the CAP Clinical Data Registry Ad-Hoc Committee

W. Stephen Black-Schaffer MD, FCAP

W. Stephen Black-Schaffer MD, FCAP
Chair of the CAP Economic Affairs Committee

An accurate diagnosis is perhaps the single most important factor in effective patient care. No one knows this more than you. Connect with and educate legislators and policy experts on the value that pathology brings to the health care continuum.

Register and join us at the:

2019 Policy Meeting
April 29—May 1
Marriott Metro Center, Washington, DC

Make pathology’s impact on patient care heard in Washington.

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