The technical component of pathology services provided in hospital outpatient settings would be subject to bundling under Medicare’s recent proposal to include lab testing in ambulatory payment classifications.
Under the July 8 proposal, pathology services would be considered ancillary services and would be packaged when performed with another service but would continue to be paid separately when performed alone. A list of codes and services that would fall under this category is contained in Addendum P to the 2014 Hospital Outpatient System Proposed Rule (available on the Centers for Medicare and Medicaid Services (CMS) Web site at
www.cms.gov). They include CPT codes 88125-88342.
These codes, which currently are assigned to status indicator “X,” would be reassigned to status indicator “Q1” and would be packaged when provided with a service assigned a status indicator of “S,” “T,” or “V.”
Clinical laboratory tests (CPT codes 82010-86793) also would be bundled when provided in hospital outpatient settings. CMS would consider a lab test to be unrelated to a primary service and, thus, not part of the packaging policy when the laboratory test is the only service provided on that date of service or when the laboratory test is provided on the same date of service as the primary service but is ordered for a different purpose than the primary service by a practitioner different from the practitioner who order the primary service provided in the hospital outpatient setting.
Lab test codes that CMS proposed to package would be assigned status indicator “N” and are also listed in Addendum P to the proposed rule.
Molecular pathology tests (CPT codes 81200-81383) would be exempt from this proposed packaging policy.
Impact Depends on Relationship
How much pathologists will be impacted by this bundling proposal will depend largely on their relationship with the hospital, says Jen Madsen, senior director of economic and regulatory affairs for the College of American Pathologists.
“The extent to which the pathologist is affected depends on the financial arrangement between the pathologist and the hospital lab … e.g., whether the pathologist is an employee of the hospital and earning a salary vs. working in an independent practice and capturing the Part B payment for tests that would previously be separately paid,” she says. “I think a lot of the impact here will depend on the relationship between ordering physicians and the hospital.”
One implication of this proposed bundling policy is that lab and pathology services that were not subject to the Medicare Part B deductible and coinsurance when listed separately under the Clinical Laboratory Fee Schedule now will be subject to deductibles and coinsurance.
“The purpose of the laboratory packaging proposal is not to shift program costs onto beneficiaries, but to encourage greater efficiency by hospitals and the most economical delivery of medically necessary laboratory tests,” writes CMS in the proposed rule, which was published in the July 19 Federal Register.
The Takeaway: Pathologists who provide services to hospital outpatients under an independent contract could see a significant hit to technical component payment if the bundling proposal is finalized. 