CMS Cuts 88305 TC by 52%, Molecular Codes Go On CLFS

As expected, significant cuts to the technical component for laboratory tests with an 88305 billing code (i.e. biopsies). After a 12-year non-review the TC component has been cut by 52%, while the professional component has been increased by 2%, resulting in a net decrease of 33% with this readjustment. Also, expected were placement of molecular pathology test codes on the clinical fee schedule rather than physician fee schedule, citing differences between whether or not they require a physician interpretation.

November 1—Advancing its commitment to contain health care delivery costs, CMS announced a series of physician pay cuts impacting pathologists in the final 2013 Physician Fee Schedule (PFS) released today. Most notably, the agency lowered the technical component (TC) of the surgical pathology code 88305 by 52%, although it raised the professional component (PC) by 2%, beginning Jan. 1. This change alters the global payment for this code, which will decrease by 33% as a result of this revaluation. The agency also announced that the newly developed molecular pathology CPT codes would be placed on the Medicare Clinical Laboratory Fee Schedule (CLFS). A new CMS HCPCS II G-code was created for situations requiring physician interpretation and reporting of these tests for Medicare beneficiaries.

The revaluation of the 88305 code—as well as other codes in this surgical pathology family—is not surprising. As directed by the health care reform law, CMS has been focused on scrutinizing high volume codes from all specialties as potentially overvalued services. Indeed, the 88305 code is not only high volume, but its TC has not been reviewed since initially valued in 2000.

Molecular Codes Placed on CLFS

CMS also announced that the 101 new molecular CPT codes would be placed on the Medicare CLFS. CMS will not publish national payment amounts for the codes, as reimbursement for 2013 will be set by the gap filling method.

The CAP helped to develop these codes, and advocated for placement of these codes on the PFS, asserting it reflects the professional work related to performing these testing services. However, CMS elected to place these codes in the CLFS, citing differences of opinion within the stakeholder community about whether these codes require a physician interpretation. The agency did, however, provide a new G-code for use by physicians, specifically pathologists, asserting that physician interpretation of these tests is sometimes medically necessary. CMS designated the G code as an interim code, and the agency will be monitoring its use.

PQRS Expansion

In today’s rule, CMS also finalized the details of next year’s Physician Quality Reporting System (PQRS) program. Providers—including pathologists—who participate successfully in 2013 will receive a 0.5% bonus of total Part B allowed charges and avoid a 1.5% deduction in overall Part B Medicare payments in 2015. Pathologists who do not participate in 2013, or do so unsuccessfully, will face a 1.5% penalty in 2015 based on overall Part B Medicare payments.

Pathologists will continue to qualify for incentives for reporting on three quality measures (or all applicable measures if fewer than three apply) through 2014. There are five CAP-developed quality measures that pathologists may choose to report.

Other PQRS changes beginning next year include new group reporting options. Group practices with between 2 and 99 members may report on measures for all the practice’s patients as a group, with all members of the group getting credit regardless of which individuals provided the service. In addition, providers in group practices of 100 or more will be subject to a value-based payment modifier adjustment in 2015 determined by their 2013 PQRS participation.

Other Payment Changes

In addition to TC value and PQRS changes, providers will also confront a number of other payment changes, as outlined in the final PFS:

• 1% cut to pathology to cover cost of 7% family physician increase that is spread across all specialists. This is part of multiple year strategy to encourage care coordination services;
• Additional 1% cut to pathology due to practice expense methodology change phase-in;
• Total 6% cut to pathology after including change in pathology code values—most notably the TC revaluation, together with primary care and practice expense methodology change.
• Projected 26.5% cut due to SGR (Congress expected to avert cut);
• TC Grandfather termination confirmed.

In addition to the November member Webinars (see above), watch for additional analysis on the final fee schedule’s impact on pathology in the Nov. 8 issue of Statline and a Special Statline Report in the November issue of CAP Today. The December issue of CAP Today will feature a second special Statline report on how the PQRS expansion will affect pathologists. Also watch for The 2013 PFS Resource Center and The PQRS Resource Center, set to launch on CAP.org/Advocacy early next week.

Source: College of American Pathologists