Industry analysts are looking favorably on a decision by the Centers for Medicare and Medicaid Services (CMS) to scrap a proposal to cap payment for certain anatomic pathology (AP) services provided by independent labs at Hospital Outpatient Prospective Payment System (HOPPS) levels. That proposal would have resulted in reductions of up to 80 percent for some common AP services. In the final Physician Fee Schedule rule for 2014, released late on Nov. 27, CMS said it is not finalizing that proposal and will consider more fully all comments received. The agency does expect to develop a revised proposal for using HOPPS and ambulatory surgical center rates in developing relative value units, which it will propose through further notice and comment rulemaking. “We view this as a meaningful positive,” wrote analyst Amanda Murphy with William Blair & Co. “Based on the proposed rule published in mid-July, these caps would have resulted in meaningful cuts to 39 anatomic pathology services and could have had meaningful (and outsized) implications to reimbursement rates for a number of key anatomic pathology procedures, including [fluorescence in situ hybridization] testing . . . and flow cytometry.” CMS is moving forward with two other proposals: one to revise […]
Industry analysts are looking favorably on a decision by the Centers for Medicare and Medicaid Services (CMS) to scrap a proposal to cap payment for certain anatomic pathology (AP) services provided by independent labs at Hospital Outpatient Prospective Payment System (HOPPS) levels. That proposal would have resulted in reductions of up to 80 percent for some common AP services.
In the final Physician Fee Schedule rule for 2014, released late on Nov. 27, CMS said it is not finalizing that proposal and will consider more fully all comments received. The agency does expect to develop a revised proposal for using HOPPS and ambulatory surgical center rates in developing relative value units, which it will propose through further notice and comment rulemaking.
“We view this as a meaningful positive,” wrote analyst Amanda Murphy with William Blair & Co. “Based on the proposed rule published in mid-July, these caps would have resulted in meaningful cuts to 39 anatomic pathology services and could have had meaningful (and outsized) implications to reimbursement rates for a number of key anatomic pathology procedures, including [fluorescence in situ hybridization] testing . . . and flow cytometry.”
CMS is moving forward with two other proposals: one to revise payment for codes under the Clinical Laboratory Fee Schedule due to “technological changes” and one to bundle payment for all clinical diagnostic laboratory tests (other than molecular pathology tests) performed on hospital outpatients into a single payment for primary hospital outpatient procedures.
The expanded bundling payment would apply for services that are provided on the same date of service as the primary service and ordered by the same practitioner who ordered the primary service. This will begin Jan. 1, 2014.
In a statement, the American Clinical Laboratory Association said it commends CMS for not finalizing the proposal to “slash Medicare payments for anatomic pathology services which diagnose breast, colon, prostate, skin, ovarian, leukemia, and other cancers.”
The College of American Pathologists (CAP) said it remains opposed to this policy and “will consult with coalition partners and Congressional supporters on both sides of the aisle on next steps to prevent future implementation of this or similar proposals that do not accurately account for the cost of delivering laboratory services.”
Other Changes
As expected, the final rule included payment reductions for immunohistochemistry procedures, enhanced cytology services, and in situ hybridization services. It also included new restrictions on billing of 10 or more prostate biopsies and will require individuals who bill more than 10 to use a G code on the bill.
In addition, under the final rule, pathologists will be able to qualify for 2014 Physician Quality Reporting System incentives by reporting on the existing five measures by either claims or registry. However, CMS did not accept three new pathology measures proposed by CAP.
The final rule also modified cuts to Medicare physician payment slightly. Under the rule, physician payment would be cut by 20.1 percent instead of 24.4 percent beginning in January. However, this cut is unlikely to take effect as lawmakers are expected to intervene before the end of the year, as they have in years past.
Takeaway: CMS’s decision not to cap Medicare payment for anatomic pathology tests at outpatient payment rates provides some relief for labs that were facing significant cuts for many of the services they provided.
