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Pay is up in Medicare proposal, but final picture unknown

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Kevin B. O’Reilly

August 2015—After years of reading the latest news from the CMS with dread, pathologists and independent laboratories have some reason for revelry this summer as the agency’s proposed physician fee schedule offers an overall uptick in Medicare payment for 2016. Yet it is the final physician fee schedule, due in November, that will tell whether pathologists feel grateful toward the CMS when Thanksgiving rolls around.

“Overall, pathology and independent labs have something good to smile about here. Compared to other specialties, both of these areas received a nice increase,” says Mick Raich, president of Vachette Pathology, a practice management firm that reviews about $900 million in annual billing for 83 pathology practices nationwide.

Raich

According to the CMS’ proposed physician fee schedule—published July 15 and available at https://federalregister.gov/a/2015-16875—independent laboratories would be in line for an aggregate nine percent increase in payment on charges of $823 million. Eight percentage points of that nine percent raise are due to the impact of changes to practice expense relative value units, or RVUs, while the remaining percentage-point increase is due to work RVU changes.

Pathologists, meanwhile, are estimated to see an eight percent pay raise under the proposed fee schedule on charges of $1.3 billion. Changes in work RVUs and practice expense RVUs of four percentage points each contributed to that increase for pathologists.

“Most of the increases are tied to the technical component. I believe this is a bit of a correction as many of the code descriptions for these codes have moved from per block to per specimen,” Raich tells CAP TODAY. “The professional component was increased slightly, the best news being a 1.41 percent proposed increase for the 88305–26”—for a tissue exam by a pathologist.

Some of the biggest year-over-year proposed pay raises come for codes used to report immunohistochemical work. For example, Medicare now pays $67.91 for code 88341 (immunohisto antibody slide). Under the proposed fee schedule, that would jump 35 percent to $91.72. That code with the 26 modifier earns $21.92 now and would bring in $28.17 in 2016, about 29 percent more. Meanwhile, another IHC code, 88344, would bring in 50 percent more ($176.58) under the CMS proposal. The TC modifier for that code would see pay rise 75 percent to $135.41, while pay for the 26 modifier also would increase by about two percent to $41.16.

“In regards to immunohistochemistry, we see some significant increases in payment for both the technical component as well as the professional component. While these increases are quite marked, remember that we’re coming off the rather large cliff when these codes were cut last year,” Jonathan L. Myles, MD, said in a July 14 CAP webinar available at http://j.mp/capwebinar_2016proposed. He is chair of the CAP’s Economic Affairs Committee and pathology advisor to the American Medical Association’s Relative Value Scale Update Committee, or RUC.

“What this is an example of is successful advocacy,” Dr. Myles said. “Throughout 2015, the College on several occasions engaged with the CMS, advocating for why certain things need to be included in the practice expense, as well as on the professional side that the professional component shouldn’t be cut like they did. We still have some work to do, but we’re certainly off to a great start with the proposed rule for 2016 in terms of immunohistochemistry.”

Raich says the Centers for Medicare and Medicaid Services’ turnabout on payment for IHC “is still not an increase compared to two years ago.”

“It’s three steps forward and three steps back,” he says. “It’s their strategy to drive down utilization, or overutilization.”

Several codes for in situ hybridization work also are in line for a big Medicare pay bump. Pay for 88364 would increase about 40 percent, with the technical component jumping 44 percent to $101.83 and the 26 modifier bringing in $35.39, a nearly 30 percent increase over this year. The CAP has compiled a table—available at http://j.mp/2016proposed_pathrvus—that compares 2015 pathology RVUs with those proposed for 2016.

Dr. Myles warned that the apparent good news from Medicare comes with caveats.

“Importantly, the impact to 2016 pathology payment doesn’t include the values CMS will assign to G0416—the prostate bundling code—or any other changes in the 2016 final rule,” he said.

Dr. Myles

In 2014, the CMS created a new definition for G0416 and stated pathologists would use the code when reporting all prostate biopsy services for Medicare patients starting this year. At the same time, the agency said that payment for the service was potentially misvalued and that a revised pay rate would be published for 2016.

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