A proposed change in Medicare methodology combined with
data supplied by the CAP since 1999 would result in a 1.3 percent increase
in pathology practice expense relative values next year and a total 13.1
percent increase over four years.
Those changes come under a Centers for Medicare and Medicaid Services
proposed rule for the 2006 Medicare physician fee schedule, published
Aug. 8 in the Federal Register. The rule includes the agency’s proposal
to change the way it calculates practice expenses.
The new method would boost pathology practice expense relative value
units, or RVUs, overall by 1.3 percent in 2006, 2.6 percent in 2007, 3.9
percent in 2008, and 5.3 percent in 2009, according to CMS figures in
the document. For independent laboratories, practice expense RVUs would
rise 6.4 percent next year, 13.1 percent in 2007, 20.3 percent in 2008,
and 28 percent in 2009.
For pathology, the revised calculation uses Clinical Practice Expense
Panel data that the CAP has worked to refine since 1999 through the American
Medical Association’s Practice Expense Advisory Committee and the AMA/Specialty
Society RVS Update Committee. Because the new method could cause "some
measure of financial stress" for some specialties, the CMS is proposing
to phase in the change as a weighted proportion of relative value units
that would increase in 25 percent annual increments over four years.
As expected, the 2006 fee schedule proposed rule also calls for a 4.3
percent cut in all physician fees, a result of applying Medicare’s flawed
sustainable growth rate, or SGR, formula. The CAP, the AMA, and other
physician specialties have lobbied in recent years to replace the SGR
with an annual fee update formula that more accurately reflects physician
costs. Legislation pending in Congress would require positive updates
for physician payments next year and beyond and scrap the SGR system in
favor of calculations tied to changes in medical inflation and physician
If Congress fails to avert the SGR-generated fee cut next year, the improved
pathology and independent laboratory practice expense RVUs would blunt
the effect of the reduction, leaving pathology with about a three percent
decrease and independent laboratories with a 2.3 percent increase in 2006.
Also contributing to slightly improved pathology payments is a CMS proposal
to reduce payments for certain multiple imaging procedures performed in
the same session within the same imaging code families. The policy change
would result in a 0.02 percent increase for pathology services next year.
In another practice expense change related to CAP advocacy, the CMS says
it will adjust the number of DNA probes assigned to in situ hybridization
code 88367. "Currently, CPT codes 88365 and 88368 have 1.5 probes
assigned, while CPT code 88367 has only .75 of a probe assigned,"
the CMS says in the proposed rule. "CAP requested that we also assign
1.5 probes to CPT code 88367, and the comment provided justification for
this request. We accept the CAP rationale and propose to change the probe
quantity for CPT code 88367 to 1.5."
The CMS also says it will accept refined practice expense inputs, presented
by the CAP earlier this year, for CPT morphometric analysis codes 88355
and 88356. In addition, the CMS will accept revised practice expense inputs
for flow cytometry codes 88184 and 88185 relating to clinical staff type
and changes in antibody costs. Further, the CMS proposes to add a computer,
printer, slide stainer, biohazard hood, and FACS wash assistant to 88184,
and a computer and printer to 88185.
Elsewhere in the proposed rule, the CMS acknowledges the current debate
on and off Capitol Hill surrounding pay-for-performance proposals by stating
that Medicare’s payment system should encourage physicians to provide
quality care and prevent avoidable health care costs. The agency notes
its support of a Medicare Payment Advisory Commission recommendation to
develop measures related to the quality and efficiency of care physicians
provide. The agency also says it hopes to work with physicians to improve
their understanding of the consequences of differences in the use of followup
visits, imaging procedures, laboratory testing, and minor therapeutic
The CMS says that, given rapid growth in spending, it expects to intensify
efforts to engage the physician community in developing useful quality
measures. The agency says it is now exploring ways to share quality of
care and resource use information with individual physicians and would
release to the public only aggregate quality data. Some data, the CMS
says, will derive from claims.
Carl Graziano is CAP manager of government communications.