In this issue:
- CMS proposes 2027 pay reductions as temporary relief expires
- How Changes to Quality Payment Program Rules will Affect Pathologists Next Year
- Advanced Alternative Payment Models
CMS proposes 2027 pay reductions as temporary relief expires
Surgical Pathology Codes Identified as Potentially Misvalued
Pathology reimbursement faces continued financial pressure under the proposed CY 2027 Medicare Physician Fee Schedule. With the 2.5% temporary payment relief provided under the “One Big Beautiful Bill Act” scheduled to expire at the end of 2026, and additional policy changes proposed in the rule, pathology reimbursement is projected to decrease by approximately 2.42% in 2027.
The impact: The projected decline in pathology spending underscores the need for continued CAP advocacy to stabilize and reform the Medicare physician payment system. Visit the CAP Action Alert Center to urge Congress to take needed steps to stabilize the Medicare Physician Fee Schedule payment system.
Key payment policy issues for pathologists: The Centers for Medicare & Medicaid Services (CMS) is seeking public comment on whether the surgical pathology CPT 88305 code family is potentially misvalued and whether action should be taken in 2027 or future rulemaking.
- CMS received a letter from the Maryland Health Care Commission (MHCC) nominating the 88305 surgical pathology code family, along with several other non-pathology code sets, as potentially misvalued.
- Under CMS’ Potentially Misvalued Code initiative, interested parties may submit requests for code review.
- As a result, CMS included a request for public comment on this issue.
- IMPORTANT: Aware of the MHCC letter and its potential implications for future CMS action, the CAP developed a framework to prepare for the possibility that this code family could be identified under the Misvalued Code initiative. The CAP will strongly advocate to protect the value of these pathology services.
CMS proposed to accept the American Medical Association (AMA) Relative Value Scale Update Committee (RUC)-recommended revisions for the Fine Needle Aspiration (FNA) codes, CPT 10005 and 10006.
- The physician work value for CPT 10005 is proposed to decrease slightly from 1.42 to 1.35 RVUs, while the value for CPT 10006 is proposed to increase from 0.98 to 1.00 RVUs.
- CMS also accepted the revised practice expense inputs recommended by the RUC.
By the numbers: The non-APM qualifying conversion factor for 2027 is proposed to be $32.8409, a 1.7% decrease from 2026.
Go deeper: Review our impact table comparing changes to pathology services from current to next year’s payments.
How Changes to Quality Payment Program Rules will Affect Pathologists Next Year
For performance year 2027, CMS proposes to:
Make MIPS Value Pathways (MVPs) mandatory starting in performance year 2029/payment year 2031.
- MVPs are an alternate arm of MIPS with a narrower set of quality measures and improvement activities.
- The Pathology MVP, which became available in 2026, includes other aspects of the MIPS program that do not apply to pathologists such as population health measures and promoting interoperability activities.
Define the quality measure set in the Pathology MVP as seven MIPS Clinical Quality Measures (CQMs) and three QCDR measures from the Pathologists Quality Registry as well as four QCDR measures from a commercial QCDR, MSN Healthcare.
- Many of the Improvement Activities (IAs) included in the MVP are not applicable to pathologists.
- For information about reporting the MVP, contact mips@cap.org.
Revise the determination of high-priority quality measures.
- Currently, pathologists or groups must report at least one “high-priority” measure, as designated by the CMS.
- Starting in performance year 2027, the CMS is terminating the “high-priority” designation in favor of a “core measure” designation—clinicians or groups must report at least one “core measure” rather than one “high-priority” measure.
- Pathology core measures include QPP 396, QPP 440, and QPP 491.
- Pathologists or groups who cannot report any of these three measures will be required to attest to that fact at the time of reporting.
- Small practices as defined by the CMS (15 clinicians or fewer) are exempt from this requirement.
Leave the performance threshold at 75 points as was finalized in the 2026 final rule. The CAP still opposes this high threshold due to the burden on pathologists.
Maintain the data completeness threshold at 75 points, a previously finalized policy.
Add two new CAP-developed Improvement Activities (IAs) applicable to pathologists to the Pathology MVP to support data-driven practice improvement and diagnostic quality enhancement:
- IA_CC_XX: Use of Data to Improve Practice Workflows
Use practice performance and operational data to identify workflow improvement opportunities and enhance the efficiency and quality of care delivery. - IA_CC_XX: Understand and Improve Diagnostic Performance
Evaluate diagnostic processes and outcomes to support continuous quality improvement, improve diagnostic accuracy, and strengthen patient care.
Remove three Improvement Activities from the Pathology MVP and from MIPS:
- IA_BE_15: Engagement of Patients, Family, and Caregivers in Developing a Plan of Care
- IA_CC_12: Care Coordination Agreements that Promote Improvements in Patient Tracking Across Settings
- IA_PSPA_2: Participation in Maintenance of Certification (MOC) Part IV
Make the determination of practices who should be exempt from MIPS due to extreme and uncontrollable circumstances automatically instead of requiring an application.
The CAP continues to advocate for pathologists’ success in the MIPS program. We encourage practices (and their billing companies) to review the scoring changes and contact CAP at mips@cap.org to understand the availability of higher-scoring measures and how to best report them.
Advanced Alternative Payment Models
For the Advanced APM track, if an eligible clinician participates in an Advanced APM and achieves Qualifying APM Participant (QP) or Partial QP status, they are excluded from the MIPS reporting requirements and payment adjustment.
- According to CMS, the agency continues to focus on transforming health care delivery toward the goal of having all traditional Medicare beneficiaries in an accountable care relationship with their health care provider by 2030.
- CMS is proposing modifications to determination of the QPs or Partial QPs to more closely align with MIPS determination at the NPI/TIN level, rather than solely at the NPI level.
- Additionally, the Consolidated Appropriations Act, 2026, now has provided for a 3.1% APM incentive payment in 2028 for APM participants.
Next steps: The CAP will provide comments to CMS within the next 60 days on the proposals that impact the specialty.
Save the date: On August 12, we’ll review changes to the 2027 Medicare fee schedule and Quality Payment Program regulations.