Millions at stake in ’21; CAP fights Medicare cuts

Create PDF

CMS finalizes proposal that will lower payments for non-e/m services billed by specialists

Charles Fiegl

December 2019—Medicare reimbursement to pathologists in 2020 is estimated to remain steady, but significant cuts in payments to pathologists and other specialists are expected in 2021 owing to a dramatic shift in how primary care physicians will be paid.

The CAP is already fighting the scheduled cuts to pathologists in 2021 as a result of a new plan that reimburses evaluation and management office visit services at a higher rate and lowers payments for non-E/M services billed by specialists. The Centers for Medicare and Medicaid Services finalized the proposal that will lead to an estimated eight percent reduction in Medicare payments to pathologists in 2021 when it published on Nov. 1 the 2020 Medicare physician fee schedule final regulation. At the same time, the CMS made favorable changes in response to the CAP’s advocacy on the practice expense components related to payment for pathology services, positively impacting payment rates for 2020.

Cuts tied to E/M services. The 2021 implementation of the CMS’ changes to evaluation and management office visit services redistributes $7 billion under Medicare’s budget-neutral physician fee schedule. Physicians who commonly bill E/M services stand to benefit the most while physicians who rarely bill E/M services will see their reimbursements reduced. According to CMS estimates, pathology will lose $97 million, or eight percent, in 2021. Providers that bill Medicare as independent laboratories will lose $24 million, or four percent, in 2021. The impact on individual pathologists will vary depending on their case mix.

2020 Medicare physician fee schedule relative value units

The changes to E/M services go beyond recommendations proposed by a workgroup led by the American Medical Association. The CAP participated in the workgroup, which advocated for the CMS to align its E/M payment policy with coding changes outlined by the AMA CPT editorial panel and values recommended by the AMA/Specialty Society Relative Value Scale Update Committee, known as RUC. The CMS accepted the AMA-RUC recommendations but then tacked on an additional E/M add-on code, which the agency believes is needed to reimburse the work associated with furnishing complex office visit services.

The CAP and the AMA have opposed this add-on code because it accounts for an additional $2.6 billion that will be redistributed to physicians furnishing office visits and further reduces payments to physicians who do not bill E/M services. For pathologists, three out of the eight percentage point reduction is attributable to the add-on code as such an increase must not increase Medicare spending for physicians.

Cuts to pathologists under this policy change could have been worse. Surgical specialties and the AMA advocated for increases to surgical procedures that have a global period to also reflect the E/M changes as surgeons typically conduct pre-op and post-op office visits as part of surgeries. The CAP opposed this effort, and the CMS agreed with the CAP and opted not to make changes to the global surgery codes at this time.

A $30 million increase. Earlier in 2019, the CAP submitted an extensive list of pathology supplies and equipment invoices to the CMS to correct errors the CAP found in several prices. Previously, the CMS reset prices for more than 2,000 medical supply and equipment items that are used to calculate payments for services on the Medicare physician fee schedule. These pricing inputs are used for the practice expense component of physician services, used to calculate the technical component and global payment of pathology services.

Because of the CAP’s advocacy and efforts to correct errors affecting Medicare reimbursements for pathology services, the CMS updated 36 direct practice expense supply and equipment prices, adding $30 million to Medicare payment for pathology services. Twenty-six of these price increases are owing to the direct work of the CAP’s engagement to correct previous CMS errors.

The CAP will continue to provide to the CMS as needed additional clarification on appropriate pricing for pathology supplies and equipment.

Values for cytopathology services reduced. In the 2020 Medicare physician fee schedule, the CMS reduced the physician work relative value units used to calculate the payment for cytopathology services. The CAP had recommended maintaining the current physician work RVU of 0.42 for four cytopathology services identified as potentially misvalued. The CMS disagreed and decreased the physician work RVU to 0.26. The reduced payment rates will be phased in over two years, starting in 2020.

The CAP had secured the support of the AMA and worked with the CMS to protect the value of these services. However, the agency finalized its initial recommendation for the following services:

• Cytopathology, cervical, or vaginal (any reporting system), requiring interpretation by a physician (code 88141).
• Screening cytopathology, cervical, or vaginal (any reporting system), collected in preservative fluid, automated thin layer preparation, requiring interpretation by a physician (code G0124).
• Screening cytopathology smears, cervical, or vaginal, performed by an automated system, with manual rescreening, requiring interpretation by a physician (code G0141).
• Screening Papanicolaou smear, cervical, or vaginal, up to three smears, requiring interpretation by a physician (code P3001).

The CAP remains opposed to these reductions and will continue to advocate for their accurate valuation. (See “Pathology values,” this page.)

Two proposals shelved. In a separate regulation for the Medicare Hospital Outpatient Payment System also released Nov. 1, the CMS agreed with the CAP’s advocacy by shelving two proposals.

The CAP turned back the CMS proposal to specify that the ordering physician would determine whether the results of the advanced diagnostic laboratory tests (ADLTs) or molecular pathology tests are intended to guide treatment provided during a hospital outpatient encounter. If the ordering physician had considered the test would guide treatment during the hospital outpatient encounter, the test would have been regarded as a hospital service. The agency had also proposed removing molecular pathology tests from the laboratory date-of-service exception and limiting it only to ADLTs. The CMS said it no longer believes the beneficiary access concerns that apply to ADLTs also apply to molecular pathology tests.