Sherrie Rice
October 2026—The CAP last month urged the Centers for Medicare and Medicaid Services not to change for 2027 the physician times or work relative value units for CPT codes 88305 and 88307 or any other codes in the CPT code 88305 family.
The Maryland Health Care Commission (MHCC) nominated 13 CPT codes as potentially misvalued, including 88305 and 88307. Using data from the 2023 Maryland All-Payer Claims Database, the MHCC suggested the physician times and work RVUs assigned under the physician fee schedule may not accurately reflect clinical practice and recommended that the CMS review all codes in the CPT code 88305 family.
The CMS is seeking comments on whether it should revise the physician times for these services for CY 2027 or in future rulemaking and whether revisions, if any, should be accompanied by corresponding changes to the work RVUs.
In Sept. 14 comments submitted to CMS administrator Mehmet Oz, MD, CAP president Qihui “Jim” Zhai, MD, said the MHCC analysis does not account for service heterogeneity or evaluate the time and intensity of the typical service.
Dr. Zhai noted that CPT code 88305 includes 63 specimen types in its descriptor and that CPT 88307 includes 39. “MHCC does not describe the services represented among the provider days exceeding its thresholds. Therefore, it is not possible to determine the extent to which its findings reflect a typical distribution of services reported under these codes or are restricted to a limited subset with particular characteristics,” Dr. Zhai said in the Sept. 14 letter.
The MHCC’s concerns focus on only a small fraction of the provider-days analyzed, he said. MHCC identified 1,763 provider-days on which the cumulative intraservice time associated with CPT code 88305 exceeded eight hours, representing 2.9 percent of the 60,221 provider-days analyzed. Provider-days exceeding 24 hours accounted for less than one percent, Dr. Zhai pointed out.
For 88307, MHCC identified 40 provider-days (0.4 percent) exceeding eight hours.
“MHCC also does not report the number or percentage of billers associated with these apparently aberrant provider-days,” he said. “Without information regarding the services or billers responsible for these observations, it is not possible to determine whether they reflect a broader issue with the service as typically provided or isolated circumstances with particular explanations.”
Specimen heterogeneity affects not only the time required to furnish these services but also their intensity, but MHCC makes no effort to evaluate service intensity and instead examines cumulative time alone, Dr. Zhai said.
“MHCC neither demonstrates that the provider-days exceeding its thresholds are representative of the typical CPT code 88305 or 88307 service nor evaluates the intensity required to furnish these heterogeneous services,” he said. “Therefore, its analysis cannot establish that the physician times or work RVUs associated with the typical service are inaccurate.”
The CAP comments note, in addition, that the MHCC points to the “regular” billing of 88305 and 88307 by gastroenterologists and dermatologists as a basis for suggesting the services may be misvalued. Dr. Zhai said in the comments that the CAP’s own review of data indicates dermatologists accounted for 12.7 percent of 88305 utilization billed globally or for the professional component. Gastroenterologists, he said, accounted for 0.5 percent.
“The apparent difference between MHCC’s characterization and the CAP’s findings may reflect a relatively low threshold for what MHCC considers ‘regular’ billing overrepresentation of dermatologists and/or gastroenterologists in the claim subset in question, or methodological differences in how MHCC identified and attributed services to providers,” he said.
Among the CAP’s other concerns are that for 88305, MHCC relies on a 2016 Urban Institute study that reported a median observed intraservice time of two minutes. “However, the study identified CPT code 88305 as a highly heterogeneous service and acknowledged that its small observed sample likely did not capture the time necessary to perform all elements of the service.”
The CAP maintains that the MHCC’s limited analysis and the Urban Institute’s acknowledged unreliable two-minute estimate do not establish that 88305 and 88307 or any other codes in the 88305 family are misvalued or identify the source of the apparent discrepancy. “At most, these data raise questions warranting further evaluation,” Dr. Zhai said.
As a member of the AMA/Specialty Society Relative Value Scale Update Committee, “the CAP stands ready to provide the pathology expertise necessary to support an accurate evaluation of the physician work involved.”
For greater detail on the aforementioned CAP concerns and others, in addition to the CAP’s comments on Software as a Medical Service laboratory analyses and more, go to https://bit.ly/CAP_state-PFS.
Sherrie Rice is editor of CAP TODAY
Editor’s note: For another perspective on the proposed reduction in payment for CPT code 88305, below is the Sept. 10 letter sent to the CMS by Rich Cornell, president of Sante Consulting, who provided CAP TODAY with permission to publish it.
Recruiter: ‘One more reason for a candidate to say no’
My name is Rich Cornell. I am President of Sante Consulting, a physician search and recruitment firm, and I have spent 36 years recruiting pathologists for hospitals, academic centers, and independent laboratories across the United States. I am writing not as a clinician but as someone who sits on the other side of the hiring table—the person practices call when a pathologist retires, when a group can’t cover call, or when a rural hospital’s only pathologist gives notice with no successor in sight. From that vantage point, I want to raise a direct concern about the proposed reduction in payment for CPT code 88305 in the CY 2027 Physician Fee Schedule.
I have watched this shortage go from a warning to a daily operational crisis. When I started in this business, a pathology search took a matter of months and drew a healthy field of candidates. Today, searches routinely run 12 to 18 months, and for rural and community hospital positions, they often close unfilled or get filled only through locum coverage. The numbers back up what I see in practice: The U.S. has roughly 16,200 practicing pathologists against a projected shortfall of about 4,230 FTEs by 2037, according to HRSA, which also projects a 7% decline in supply against a 16% increase in demand over that period—with rural areas facing only about 20% supply adequacy. At any given time there are over 1,000 active, open pathologist positions nationwide that hospitals and labs are actively trying to fill—a number I see reflected directly in my own pipeline of client searches. The pipeline replacing this workforce is thin: Roughly 600 new pathologists enter practice each year, against an estimated need for 3,000 more by 2037. I am recruiting into a specialty that is shrinking relative to the diagnostic demand placed on it, and every year that gap widens.
Compensation trend is the single biggest lever I have in a candidate conversation, and it has been moving in the wrong direction. When I present an opportunity to a pathology candidate—particularly a resident or fellow choosing where to land, or an established pathologist weighing whether to stay in practice or move into industry, informatics, or another field entirely—starting compensation and its trajectory are front and center. CPT 88305 is the volume engine behind surgical pathology billing; it is what makes group compensation models work. A further 4% cut to this code, layered on top of the reductions this code and adjacent pathology codes have already absorbed in recent fee schedule cycles, does not stay confined to a spreadsheet. It shows up in the next round of partner-track offers, in stalled or flat compensation guarantees, and in hospitals telling me they cannot move the number I need to close a candidate. I am already losing candidates to specialties and non-clinical paths with clearer upward trajectories—this proposal gives me one more reason for a candidate to say no.
It also undermines recruitment at the entry point, not just at the offer stage. Medical students choose specialties years before I ever see them as candidates, but the signal starts early: They talk to residents, they read compensation surveys, they watch what happens to reimbursement in the fields they’re considering. A specialty that keeps absorbing Medicare cuts to its core billing codes sends a clear message about where it’s headed financially relative to fields that aren’t taking the same hits. I am already recruiting against a pipeline of roughly 600 new pathologists a year, against over 1,000 open positions I can see right now and a shortage math that says we need several times that rate of growth just to keep pace. Policy that makes the specialty look like a declining-reimbursement field at the exact moment it needs to attract more students works directly against closing that gap—and I am the one who has to explain to a hospital CEO, year after year, why the search is taking longer and costing more.
Request: From 36 years of watching this labor market up close, I respectfully urge CMS to withdraw the proposed reduction to CPT 88305 and maintain current payment levels for this code. I would also ask CMS to weigh the specialty’s documented workforce shortage—using HRSA’s own supply and demand projections—before finalizing any further cuts to surgical pathology reimbursement, and to take seriously the concerns pathology organizations have raised about the code family being reviewed for further reductions.