College of American Pathologists

  Media Alert


Published on November 27, 2013

Contact: Laura Diamond
Phone: 202-354-7102

Contact:Alissa Momberg
Phone: 202-591-4062

CMS Halts Plan to Cap Pathology Payments to APC Rates, Payment for Other Key Services Reduced

The College of American Pathologists (CAP) to Continue Advocating for Changes Moving Forward

Washington, DC—Today, the Centers for Medicare and Medicaid Services (CMS) announced its final 2014 Physician Fee Schedule (PFS) and Hospital Outpatient Prospective Payment System (HOPPS) rules, in which CMS halted its plan to cap payment rates in 2014 in the Medicare physician fee schedule at Hospital Outpatient Ambulatory Classification (APC) Rates. Additionally, CMS reduced payment for certain Anatomic Pathology codes and expanded bundling of payments for all clinical laboratory tests (other than molecular pathology tests) performed on hospital outpatients that are currently billed to the Clinical Laboratory fee Schedule (CLFS).

The full list of final rules are available here.

2014 Anatomic Pathology Code Revaluations

For a full table outlining the proposed changes, visit the CAP’s website.

As expected, the final rule included payment reductions to the following pathology code families:

  • Immunohistochemistry: 88342 (PC & TC) – CMS rejected the code change proposal but accepted the American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee (RUC) recommendation to reduce the value of both the PC & TC. CMS established the requirement to use new G codes to bill services going forward.
  • Enhanced Cytology Services: 88112 (PC & TC) – CMS accepted the RUC recommendation to reduce values for the PC & TC.
  • In situ hybridization services: 88365, 88367, and 88368 (PC & TC) – CMS deferred action on revaluation of PC & TC until 2015.
  • 88305 TC – CMS did not reduce valuation for the TC.
  • New Restrictions on Prostate Biopsies – CMS imposed new restriction on billing of 10 or more prostate biopsies specimens and will require individuals who bill more than 10 to utilize a G code to bill.

Under the Affordable Care Act (ACA), CMS was given expanded authority to launch its “misvalued code” initiative. CMS targeted the top expenditure codes from each specialty as potentially overvalued. These code reductions will go into effect on January 1, 2014.

“The CAP, through its seat at the table with the RUC, strongly advocated on behalf of its members,” said CAP President Gene N. Herbek, MD, FCAP. “While the CAP and CMS do not always find agreement, the CAP will continue to work with CMS to ensure that the revaluations of pathology services accurately account for the cost of delivering services.”

Capping Payment Rates in the Medicare Physician Fee Schedule at Hospital Outpatient Ambulatory Payment Classification (APC) Rates

In its decision on Nov. 27, CMS halted its 2014 plan to cap pathology payments to APC rates, but has stated it will revise and reissue a proposal in future, restating the agency’s argument that the RUC process is not reliable to establish practice expense values and commitment to underlying payment policy.

As background, on July 8, 2013, CMS proposed to link payment for over 200 services to hospital outpatient rates as part of its “misvalued code” initiative. The rule released would have reduced the technical component and global payment of 39 pathology services billed for non-hospital patients by as little as 4 percent and as much as 80 percent depending on the services.

“The CAP remains opposed to this policy, and will consult with coalition partners and Congressional supporters on both sides of the aisle on next steps to prevent future implementation of this or similar proposals that do not accurately account for the cost of delivering laboratory services,” said Jonathan L. Myles, MD, FCAP, CAP’s chair of the Economic Affairs Committee.

CMS’ Proposed Changes to Medicare’s Hospital Outpatient Prospective Payment System (HOPPS)

Beginning Jan. 1, 2014, payment for all clinical diagnostic laboratory tests (other than molecular pathology tests) performed on hospital outpatients that are currently billed to the Clinical Laboratory Fee Schedule (CLFS) will be “bundled” into payment for primary hospital outpatient procedures. The expanded bundling payment would apply for services that are provided on the same date of service as the primary service and ordered by the same practitioner who ordered the primary service. CAP is continuing to analyze the potential impact of this proposal on physician pathology services provided to hospital outpatients.

Physician Quality Reporting System (PQRS)

While CMS did not accept the CAP’s three new pathology measures in its final rule, CMS will allow pathologists to qualify for 2014 incentives by reporting on the existing five measures proposed by the CAP by either claims or registry.

In 2011, pathologists received on average a bonus of $856.50. By participating in the 2013 PQRS, pathologists avoided penalties that begin at 1.5 percent of their Medicare Part B billing in 2015 and rise to 2 percent in subsequent years. These measures take effect on January 1, 2014.

“While the CAP is disappointed that its three new pathology measures were not included in the 2014 PQRS measure set, the CAP is pleased that CMS accepted the CAP’s request that the registry reporting option be available to those with fewer than nine measures,” said Myles. “The CAP will continue to engage and educate policymakers about the difficulties pathologists have meeting current CMS requirements and will continue to seek relief from penalties in cases where pathologists have no pathway in which to meet requirements.”

Clinical Lab Fee Schedule (CLFS)

CMS finalized its proposal to create a new process that will revalue Clinical Lab Fee Schedule (CLFS) payment amounts, which will occur over a five-year period. CMS rejected suggestions to form an advisory committee and will revalue payment through annual rulemaking process. Additionally, CMS intends to consider data from all available sources in order to evaluate the impact of technological changes on payment amounts.

“The CAP is disappointed that CMS rejected the creation of an advisory committee, including pathologists and other laboratory stakeholders, but expects to continue to be heavily engaged in this revaluing process moving forward,” said Myles.

About the College of American Pathologists

As the leading organization for board-certified pathologists, the College of American Pathologists (CAP) serves patients, pathologists, and the public by fostering and advocating excellence in the practice of pathology and laboratory medicine worldwide. With more than 18,000 physician members, the CAP has led laboratory accreditation for more than 50 years with more than 7,500 CAP-accredited laboratories in 50 countries. Find more information about the CAP at Follow CAP on Twitter at @pathologists.