Charles Fiegl
January 2021—Hanging over the publication of the 2021 Medicare physician fee schedule on Dec. 1 was an overall decrease of nine percent to pathology services and similar cuts to other specialty physicians. The Centers for Medicare and Medicaid Services in 2019 announced these payment cuts would offset increases to evaluation and management services, which are typically billed during physician office visits. The CAP through its advocacy opposed the cuts to pathologists and sought to stop them from taking effect.
Congress on Dec. 21 reacted by mitigating the cut after a sustained advocacy campaign by the CAP and a large coalition of specialists also affected by Medicare cuts. According to a CAP analysis, the effects of related provisions reduced the cut to pathologists to two to three percent in 2021, which amounts to overall Medicare savings of $76 million to $85 million to pathologists compared with a scenario of Congress failing to act.
Evaluation and management services represent more than half of the entire Medicare physician fee schedule spending. So any change in the relative values of these services has a significant impact on all specialties. The initial nine percent Medicare payment cut to pathology services was a result of budget neutrality requirements that offset the cost of the major changes to evaluation and management by decreasing the overall payment multiplier (conversion factor) of all services. Congress mitigated the cut by adding $3 billion to the 2021 Medicare physician fee schedule. Congress also delayed implementation of a new evaluation and management add-on code. This implementation delay, which lasts for three years, restored roughly three percent to pathologists.
For independent laboratories, which had faced a five percent cut, the CAP estimates congressional action will now increase overall payments by one percent in 2021. Independent laboratories receive pay from Medicare payment systems outside of the physician fee schedule, the CMS said in the fee schedule. For instance, independent laboratories receive 83 percent of their Medicare revenue from the clinical laboratory fee schedule. As a result, the increase applies to about 17 percent of the Medicare payment to independent laboratories.
Initially, the final 2021 conversion factor used for the Medicare physician fee schedule’s payment formula was $32.41, representing a 10.20 percent decrease from the 2020 conversion factor. Following congressional action, the CMS updated the 2021 conversion factor to $34.89, representing a 3.32 percent decrease from the 2020 conversion factor. The exact impact of the decrease to pathology and independent laboratories will vary because of individual case mixes for patient services.
In addition to its advocacy with Congress, the CAP shared its opposition to the cuts several times directly with the CMS, including in comments on the proposed 2021 fee schedule sent to the agency in October last year. In those comments, the CAP urged the CMS to use its authority under the public health emergency declaration to preserve patient access to laboratory care and mitigate financial distress due to the pandemic by waiving budget neutrality requirements for the new Medicare office visit payment policies. The CAP also highlighted that the new evaluation and management add-on code meant to be billed for complex office visits was unclear and not well defined. It was uncertain how physicians in practice will ultimately use the code. Given the budget impact and the confusion, the CAP further recommended to the CMS that it stop implementation of the new add-on code.
[dropcap]W[/dropcap]hile a good portion of the cuts for nearly all pathology services were mitigated by Congress, payment for the molecular interpretation service will more than double because of the CAP’s advocacy. The CMS on Dec. 1 released the relative value unit files to calculate prices for physician services on the fee schedule (see “2021 Medicare physician fee schedule relative value units”).
Through its ongoing work to protect the value of pathology services, the CAP had recommended new physician work RVUs used to calculate the professional component of Medicare’s molecular interpretation service.
Previously identified as potentially misvalued, the service was reviewed by the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC), on which the CAP holds the lone seat for pathology. The CAP recommended and the AMA RUC agreed to increase the current physician work RVU from 0.37 to 0.93 for the molecular interpretation code G0452. These recommendations were then sent to the CMS for its consideration and implementation. The CMS agreed and increased the physician work RVUs for G0452 by 151 percent.
Charles Fiegl is director of CAP advocacy communications, Washington, DC.