Add-ons, consults spared cuts in proposed fee schedule: Dip in revenue, many technical component codes in for a hit

After years of back and forth over Medicare payment for prostate biopsy pathology work, a mixed picture has emerged with the proposed rule. In 2015, the CMS said one code—G0416—would be used for all prostate biopsy specimens regardless of the number of specimens or the technique used to obtain the biopsy. But this new code did not include the TC revaluations that had been adopted for the previously used code, 88305. Now the CMS has gotten around to implementing those with a 19 percent proposed cut for 2017 (the biggest allowable percentage cut in one year), with more likely to come in 2018.

On the flip side, the CMS has proposed increasing pay for the professional component of the G0416 code, the 26 modifier, by 17 percent to $184.96.

“We at CAP did think the professional work was significantly undervalued and advocated to increase the professional component valuation,” said Jonathan Myles, MD, chair of the CAP’s Economic Affairs Committee. “We were successful at the RUC in our advocacy such that the RUC actually recommended a value of 4.00. That value was forwarded to CMS, and CMS decided to value it at 3.60 based on some of their intensity calculations in comparing the code to the 88305.”

Dr. Myles said the particular impact of the proposed G0416 changes will vary depending on how services are billed. Those who bill globally are in for a nine percent drop in pay, if the CMS adopts its proposed changes in the fall.

“If you’re a dash 26 biller, you’re going to see a nice increase,” he said. “If you’re a global biller, you will see an overall decrease in your payment for G0416.”

Two other areas that could see double-digit percentage pay cuts are TC for flow cytometry and tissue exams by pathologists. That is due to the agency’s re-evaluating the costs for the lysing reagent used in flow cytometry and hematoxylin and eosin stains used in surgical pathology work.

Five flow cytometry codes—88184, 88185, 88187, 88188, and 88189—could see the maximum 19 percent cuts in pay for 2017.

“The big driver here in reducing the technical component was the amount of lysing reagent that is used in these assays,” Dr. Myles said. The CMS analyzed how that pricey reagent is used and found that, typically, its cost is minimized per marker by laboratories running larger panels.

Two TC codes for tissue exams by pathologists—88307 and 88309—also are set for 19 percent cuts, while the CMS proposal seeks cuts ranging from nine percent to 16 percent for three other TC codes for tissue exams. (The CAP has prepared a table outlining the impact of the CMS’ proposed fee schedule changes, which is available at http://j.mp/2017prop_table.)

“We have had other stakeholders contact us already, and CAP will be working with the other stakeholders to engage with the CMS on this issue to try to mitigate some of these proposed decreases,” Dr. Myles said.

The proposed changes to the Medicare physician fee schedule come amid great uncertainty about how bundled payments and value-based models could affect pathology and laboratory medicine. There are also question marks about the long-delayed implementation of Protecting Access to Medicare Act requirements that laboratories submit private-market pay data to the CMS for its use in setting the clinical laboratory fee schedule.

In June, the CMS said any health care entity that received $12,500 or more from Medicare for laboratory services over the six-month period between January and June 2016 must gather its private-market payment data. That information must be reported to the CMS through a yet to be completed Web portal between January and March 2017. The agency said about 95 percent of physician-office laboratories and about half of independent labs would not meet the $12,500 threshold for mandatory reporting, raising questions about the reliability and representativeness of the data reported to the CMS.

Kevin B. O’Reilly is CAP TODAY senior editor.