The proposed 2025 Medicare Physician Fee Schedule released on July 10 highlights the continuous advocacy efforts by the CAP to protect the value of pathology services. Due to the CAP’s efforts, the Centers for Medicare & Medicaid Services (CMS) has proposed to increase the relative values of three apheresis services, provide coverage for four new CAR T-cell services, and increase the clinical labor rates for key laboratory clinical labor types. The proposed 2025 Medicare Physician Fee Schedule does, however, include cuts to physicians, including pathologists, and other providers such as independent laboratories. These cuts largely stem from the expiration of two congressional Medicare pay relief packages that were intended to offset the previously finalized cuts in the 2023 and 2024 Medicare Physician Fee Schedules. The CAP strongly opposes these cuts and is actively lobbying Congress to mitigate the decreases before they take effect.

The CAP will provide comments to the CMS within the next 60 days on the proposals that impact the specialty. Briefly, here are the key issues influencing payment for pathology services in the 2025 proposed rule:

• The continued budget neutrality adjustments and the expiration of congressional relief continue to negatively affect pathologists and other specialties throughout the physician fee schedule. Download the impact table showing the proposed changes to pathology services in 2025.
• The CMS increases Medicare Quality Payment Program (QPP) requirements for 2025, making it more difficult for eligible clinicians to thwart off payment penalties.
• Learn more: Register for the CAP’s July 30 webinar providing a comprehensive overview of the proposed fee schedule changes to pathology services and the QPP.

The 2025 Medicare Fee Schedule Proposed Rule outlined the following issues that are of interest to Pathologists.

New CPT Codes for CAR-T Therapy Services

At the May 2023 AMA CPT Editorial Panel meeting, the CAP and a multispecialty group developed four new category I CPT codes to describe the procedures required for creating and administering CAR-T therapy which is a treatment for certain types of cancer. The codes were originally created as Category III codes in 2018. The new CPT codes are listed below:

• 3X018 Chimeric antigen receptor T-cell (CAR-T) therapy; harvesting of blood-derived T lymphocytes for development of genetically modified autologous CAR-T cells, per day
• 3X019 Chimeric antigen receptor T-cell (CAR-T) therapy; preparation of blood-derived T lymphocytes for transportation (eg, cryopreservation, storage)
• 3X020 Chimeric antigen receptor T-cell (CAR-T) therapy; receipt and preparation of CAR-T cells for administration
• 3X021 Chimeric antigen receptor T-cell (CAR-T) therapy; CAR-T cell administration, autologous

To ensure these services are appropriately valued, the CAP led a multispecialty effort to develop and present physician work and direct practice expense recommendations at the September 2023 AMA RUC meeting. As outlined in the proposed 2025 Medicare Physician Fee Schedule, the CMS is proposing the RUC recommended work RVUs for all four CAR-T services. The CAP is pleased with this result and will provide feedback through CMS’ public comment process.

Appropriate Valuation of Apheresis Clinical Labor

In the 2024 Medicare Physician Fee Schedule final rule published last year, the CMS received a public comment that CPT codes 36514, 36516, and 36522 may not include the correct non-physician clinical labor cost type. The CMS indicated that these codes would benefit from additional review as part of future rulemaking. In response, the CAP led a multispecialty stakeholder group that focused on updating the current clinical staff labor type from RN/LPN blend to an RN/OCN (Oncology Nurse). The CAP argued that an oncology nurse more appropriately reflects the specialized training, work, and skill of an apheresis nurse. The AMA RVS Update Committee (RUC) agreed with the CAP and forwarded the recommendation to the CMS for its review and decision making.

As outlined in the proposed 2025 Medicare Physician Fee Schedule and in support of the CAP’s efforts, the CMS is proposing to update the clinical staff labor type for CPT codes 36514, 36516 and 36522 from RN/LPN to RN/OCN. This proposed change will increase the reimbursement rate for the three CPT codes in the non-facility setting.

Clinical Labor Rate Update

In general, services paid through the Medicare Physician Fee Schedule have two components: a physician work component and a technical component. The technical component represents the clinical (non-physician) labor, medical supplies, and equipment used to furnish a particular service. Clinical labor is represented as a per minute expense, with the CMS determining the rate paid for each clinical labor type.

In 2023 and 2024, the CAP used public wage survey data to advocate for increases to both the histotechnologist and cytotechnologist clinical labor rates. The CMS agreed with the CAP and proposed to phase-in the increase for each clinical labor type. The year 2025 marks the final year of this phase-in and the CMS is proposing to increase the histotechnologist per minute clinical labor rate from $0.57 to $0.64 and the cytotechnologist per minute clinical labor rate from $0.75 to $0.85. Many pathology services should experience an increase to their technical component and global payments in 2025 because of these increases.

Proposed Regulation Impact on Pathology Payment

The 2025 proposed fee schedule indicated the overall impact to pathology payments from 2024 to 2025 would decrease by 2.4%. Specifically, the proposed 2025 conversion factor used for the fee schedule’s payment formula is $32.3562, representing a 2.8% decrease from the 2024 conversation factor. This 2.8% decrease to the conversion factor also accounts for the required budget neutrality adjustment to account for changes in relative value units and the implementation of new services. The CAP continues to aggressively lobby Congress to mitigate these cuts to pathologists for 2025.

Need for Congressional Action

While the conversion factor is anticipated to decrease by 2.8% for 2025, the decrease has less to do with the policies announced in the proposed rule and more to do with the inability of Congress to appropriately respond to the cuts to physician payments over the past years. Rather than eliminate, revise, or replace the budget neutrality requirements in Medicare, Congress has instead responded with band-aid short-term relief packages. These packages do not eliminate cuts; they only delay the impact. For 2025, two congressional relief packages will expire resulting in a -2.9% decrease to the conversion factor. This cut continues the downward trend in pathology payments, which have seen an overall decrease of 7.0% since 2021. Therefore, the CAP will advocate for this relief and legislation that addresses long-term payment update adequacy and sustainability and mitigation of budget neutrality adjustments to the conversion factor.