In an advocacy win for the pathologists, the Centers for Medicare & Medicaid Services (CMS) finalized the proper rank order of the clinical labor rates for histotechnologists and laboratory technicians in the final 2023 Medicare Physician Fee Schedule (PFS). Because of the CAP’s advocacy, there will be more accurate payments for pathology services in 2023.

Pathology Clinical Labor Repricing

Previously, the CMS finalized updates to its clinical labor pricing for 2022. Clinical labor rates had not been updated in 20 years, which created a significant disparity between the CMS’ clinical wage data and the market average for clinical labor. However, the agency’s 2022 efforts made flawed assumptions for the pricing and the CAP intervened to correct the errors in select labor rates.

The CMS primarily used Bureau of Labor Statistics (BLS) wage data to update its clinical labor pricing in 2022. For certain labor categories where BLS data were unavailable, the CMS had to crosswalk or extrapolate the wages using supplementary data sources for verification. This is the case for the flawed 2022 clinical labor price per minute for histotechnologists. The CAP advocated early in 2022, providing the agency with current wage data resources, relative BLS comparison rates, and current open histotechnologist job salary offerings that convinced the CMS to correct the final clinical labor rate for histotechnologists. This correction additionally positively impacted another pathology blended clinical labor rate.

The CMS finalized the implementation of the clinical labor update, including the CAP-requested corrections over four years to transition to the final updated prices in 2025. For 2023, the clinical labor pricing will be in year two of the transition. The repricing positively impacts the technical and global components of physician services.

The final pathology CMS clinical labor rate phase in increases secured by CAP advocacy are:

• Laboratory Technicians 67%
• Histotechnologists 73%
• Lab Tech/Histotechnologists Blend 70%

Lower Conversion Factor and Impact on Pathology

The final 2023 conversion factor used for the physician fee schedule’s payment formula is $33.0607, representing a 4.5% decrease from the final 2022 conversation factor. This 4.5% decrease to the physician fee schedule accounts for:

• the required update to the conversion factor for 2023 of 0%;
• the expiration of the 3% supplemental increase to PFS payments for 2022 as required by the Protecting Medicare and American Farmers from Sequester Cuts Act; and
• the required budget neutrality adjustment to account for increases in physician payment for evaluation and management visits for hospital, nursing facility, home health and emergency patients.

The CAP calculated the total average Medicare spending impact on pathology will be a -3.6% and a -3.0% for independent laboratories. The individual impact of the 2023 payment changes will vary from the average based on the individual pathology practice mix of services. See the 2023 payment changes on a code level basis in the impact table developed by the CAP.

The CAP continues to aggressively lobby Congress to mitigate these cuts to pathologists for 2023. The CAP is actively participating with a coalition of specialty societies and the AMA to ensure that physicians are accurately reimbursed for their work.

Supplies and Equipment Pricing Update

Several pathology supply and equipment items commonly used by pathologists will have updated prices impacting the technical component of pathology services. The CAP advocated for these updates and advocated to correct the mispricing of one common pathology supply based on new invoices submitted during the proposed rule comment period. As a result of the CAP’s advocacy with the agency, the CMS reversed an incorrect reduction proposed for 2023 in the supply input price that translates to a more accurate finalized payment for the impacted pathology services.

Colorectal Cancer Screening

The CAP also supported colorectal cancer screening policy changes adopted by the agency to expand access to quality care and improve patient health outcomes through prevention and early detection services. Specifically, the CMS expanded Medicare coverage for specific colorectal cancer screening tests by reducing the minimum age payment and coverage limitation from 50 to 45 years.

In addition, the agency expanded the regulatory definition of colorectal cancer screening tests to include a complete colorectal cancer screening, where a follow-up colonoscopy after a Medicare-covered non-invasive stool-based colorectal cancer screening test returns a positive result. The revised colorectal cancer screening policies directly advance health equity goals supported by the CAP by promoting access for much needed cancer prevention and early detection in rural communities and communities of color that are especially impacted by the incidence of colorectal cancer.