College of American Pathologists
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  Medicare fees good news,
  despite blows to flow

  cap today

January 2005
Feature Story

Pam Johnson

For pathology, the Jan. 1 start of the 2005 Medicare physician fee schedule offers many welcome changes. But along with these changes comes one that is not so welcome in the area of flow cytometry services.

CAP advocacy to change and re-value codes for immunohistochemistry and in situ hybridization (Related article: Chapter and verse on next year’s CPT code changes, December 2004) increased the professional component work relative value units for the new and revised services by 26 percent to 51 percent. The final rule also made use of College-gathered data to update independent laboratory technical component practice expenses, a decision that boosted overall pathology payments two percentage points above a scheduled 1.5 percent increase and independent laboratory payments six percentage points above that mark.

In accepting the CAP data, the Centers for Medicare and Medicaid Services ended a two-year moratorium on a change in how it calculates pathology practice expense values. The agency granted the moratorium in 2003 and extended it through 2004 to allow the College to collect the independent laboratory practice expense data. Without the moratorium, Medicare would have cut physician fee schedule payments to hospital-based pathologists by two percent and to independent laboratories by eight percent.

The minimum 1.5 percent increases in 2004 and this year resulted from strong advocacy by the College and numerous other physician groups during congressional consideration of the 2003 Medicare prescription drug law. Without the 1.5 percent floor, the statutory formula for establishing the 2005 conversion factor—the sustainable growth rate—would have produced a 3.3 percent cut.

Flow cytometry

The positive news for overall pathology payments is tempered by reductions to professional and technical flow cytometry services. These reductions stem from an August 2003 proposed rule for the 2004 fee schedule in which the CMS, noting its concern about overpayments for flow cytometry services, proposed changing coding and payment for the professional component of flow cytometry to a single interpretation per panel. The CMS also expressed concern about duplicative payment for multiple markers for the technical component of flow cytometry.

In the 2003 proposed rule, the agency declared that in cases where flow cytometry is used to diagnose lymphoma or leukemia, there is not an interpretation for each individual marker and that "there is a single interpretation based on the quantification of all markers tested." Further, the CMS said the system of allowing flow cytometry payment on a per-marker basis "may encourage the performance of more markers than may be medically necessary because the pathologist determines what markers to perform and when to perform them." Instead, the agency said the markers might be paid more appropriately on a per-panel basis.

The College objected to the proposed changes and suggested that the CMS work with the CAP, through the CPT and AMA/ Specialty Society Relative Value Update Committee processes, on flow cytometry coding and payment. The CMS agreed in its final rule for 2004 to let the College bring coding proposals forward. This decision ultimately mitigated reductions that would have occurred had the CMS moved forward with per-panel payments based on January 2004 published values.

To recognize the greater interpretive challenge that arises from clinical cases that involve multiple markers, the College’s CPT proposal called for splitting the first marker from additional markers. The goal was to maintain recognition of flow cytometry’s complexity while also answering the CMS’ concerns about overpayments, and to do that through a Relative Value Update Committee re-evaluation of work relative value units, or RVUs. However, the CMS objected to the College’s proposal to the CPT editorial panel, and CPT eventually adopted the revised, three-tier interpretation panel approach the CMS suggested. While not endorsing the tiered coding approach, the College worked through the AMA Relative Value Update Committee process to collect physician work data to value the new codes.

The College was faced with the difficult choice of working within the existing process to lessen a negative consequence or not participating and leaving the decision entirely to the government. The CMS values for flow services are based on survey data the College provided. Although the values for the services are reduced—in some cases significantly, as compared with the per-marker approach—the CAP believes the outcome is better than what the CMS proposed originally.

Surgical pathology

As a result of significant College-proposed changes to coding for immunohistochemistry and in situ hybridization services, the CAP worked through the Relative Value Update Committee process to collect data to re-value these services. As such, work relative value units in the 2005 fee schedule will see increases for these new and revised codes compared with the codes previously available for the services. Specifically, work value increases are 26 percent for revised code 88361, computer-assisted quantitative or semi-quantitative IHC; 29 percent for new code 88360, manual quantitative or semi-quantitative IHC; 29 percent for revised code 88365, qualitative ISH; 40 percent for new code 88367, computer-assisted quantitative or semi-quantitative ISH; and 51 percent for 88368, a new code for manual quantitative or semi-quantitative ISH.

The role of the RUC process in establishing Medicare payment

In 1992, Medicare established a standardized physician payment schedule based on the resource-based relative value scale, or RBRVS, which determines payments for services based on the resource costs needed to provide them. These costs are divided into three components: the physician work RVUs, physician practice expense RVUs, and the professional liability insurance RVUs. Each receives a geographic practice cost adjustment. Total payment for a service is calculated by multiplying the combined costs by an annually adjusted conversion factor.

On average, the physician work component accounts for 55 percent of the total relative value for each service. While the values originally were set by a Harvard University study, the physician work RVUs now are updated based on the work of the Relative Value Update Committee, which was established in 1991 to make recommendations to the CMS on RVUs for new and revised codes. Historically, the CMS has accepted 95 percent of the committee’s recommendations. The College has held a seat on the committee since its inception, along with 25 other medical specialties.

As with the new and revised codes for flow cytometry, in situ hybridization, and immunohistochemistry, the College had the opportunity to conduct eight physician work surveys for the committee’s consideration. In conducting the eight physician work surveys, the College sought participation from a wide variety of pathologists who performed the various services, and it received the necessary responses to bring forward the data for the committee’s consideration this past fall. These results were then presented to the committee by a team of pathologists, each with expertise in the areas under consideration.

The Relative Value Update Committee’s surveys are designed to capture the amount of physician work it takes to perform the service. This consists of the technical skill with respect to knowledge, training, and experience necessary to perform the service; the required mental effort and judgment as well as physical effort; and stress due to the potential risk to the patient. The survey provides a way to compare these aspects of physician work in the new or revised code to the work of an established code on the physician fee schedule.

Laboratory, bone marrow issues also included in 2005 final rule

Diabetes screening tests. The proposed and final 2005 Medicare physician fee schedule rule was also used as a vehicle to implement provisions in the Medicare Modernization Act. This 2003 law mandates coverage of diabetes screening tests, and in the proposed 2005 physician fee schedule, the CMS said it will pay for the screening diabetes tests at the same amounts paid for these tests when performed to diagnose a person with signs and symptoms of diabetes. Medicare will pay for these tests under the clinical laboratory fee schedule, using CPT code 82947 Glucose; quantitative, blood (except reagent strip) and CPT code 82951 Glucose; tolerance test (GTT), three specimens (includes glucose). To indicate that the purpose of the test is for diabetes screening, CMS proposed V77.1 Special screening for diabetes mellitus as the applicable ICD-9-CM code for this purpose.

In comments to the proposed physician fee schedule, the CAP asked that the CMS include CPT code 82950, Glucose; post glucose dose (includes glucose), among the diabetes screening test codes it proposed as eligible for payment under new screening benefits, in addition to CPT codes 82947 and 82951. But, the College said, 82950 "is used much more frequently as a screening test than the GTT, which is more of a definitive test usually requested when questionable results from random, fasting or post-glucose dose or postprandial glucose levels are obtained."

In the final rule, the CMS corrects the unintentional omission of CPT code 82950, post glucose dose (includes glucose), as a diabetes screening test. The agency provides assurance that there will be clear guidance on covered services for providers and beneficiaries by way of two publications: "The Dear Doctor Package," which includes the 2005 Fact Sheet, and "Medicare Coverage of Diabetes Services and Supplies."

Cardiovascular screening blood tests. The Medicare Modernization Act also provides for Medicare coverage of cardiovascular screening blood tests for the early detection of cardiovascular disease or abnormalities associated with an elevated risk for cardiovascular disease. The CMS proposed to pay for the screening cardiovascular disease tests at the same amounts paid for these tests when they are performed to diagnose a person with signs and symptoms of cardiovascular disease. Medicare would pay for the tests under the clinical laboratory fee schedule. The CMS proposed to use the following CPT codes: 82465 Cholesterol, serum or whole blood, total; 83718 Lipoprotein, direct measurement; high density cholesterol (HDL cholesterol); 84478 Triglycerides and 80061 Lipid Panel.

The CMS proposed to allow coverage of other types of tests under this new screening benefit if it determined this was appropriate through a National Coverage Determination. In the final rule, the CMS finalized its proposed changes. The agency also announced its plan to include the special cardiovascular screening V codes for ischemic heart disease (V81.0), hypertension (V81.1), and other unspecified cardiovascular conditions (V81.2) in the Laboratory Edit Module and to release instructions and information to smooth the transition for the new benefit. Providers who routinely give advance beneficiary notices to beneficiaries must include in the ABN that the frequency limitation is the reason for which Medicare will deny coverage. A patient who has an ABN and exceeds the frequency limitation may incur out-of-pocket charges.

Bone marrow aspiration and biopsy through the same incision on the same date of service. In its proposed rule for the 2005 fee schedule, the CMS proposed creating a G-code for a bone marrow aspiration and biopsy done through the same incision on the same date of service. The agency argued there is minimal incremental work associated with performing the second procedure through the same incision during a single encounter and proposed an add-on G-code to reflect five minutes of additional physician work and practice expense. The CAP commented that the CMS should increase to 15 minutes the amount of additional physician work required when performing a bone marrow aspiration together with a bone marrow biopsy. The CMS disagreed and made final its proposal for an additional five minutes of incremental work. Physicians now must use the CPT code 38221 for bone marrow biopsy and G0364 for the second procedure (bone marrow aspiration) when the aspiration and biopsy are done through the same incision on the same date of service. The use of this G code for the second procedure represents an additional payment of $12.89 for performing this service in a non-facility setting, and $9.85 when performed in a hospital or other facility setting.

Pam Johnson is CAP assistant director for professional affairs, Division of Membership and Advocacy, Washington, DC.