Proposed Medicare 2017 Reimbursement Schedule Whacks Biopsy Payments; Digital Pathology Payments Up

The bread and butter of every surgical pathologist, the 88305 biopsy code, among others for larger specimens, face a significant reduction for technical cost reimbursement.  The professional reimbursements are expected to change very little. The proposed reimbursement for an 88305 of under $3o I believe is getting close to what it may cost many labs to produce, based on my experience in a number of settings. This could perhaps further drive laboratory consolidation for histology technical services and perhaps spur additional adoptions of lean engineering principles to maximize efficiency and productivity with declining revenues for this benchmark to produce an H&E slide. 

On a bright note, computer assisted quantitative image analysis (CPT Code 88361) will see a small increase.  

According to Laboratory Economics:

The Proposed Medicare Physician Fee Schedule (MPFS) for 2017 includes a 15% cut to the technical component for CPT 88305, which, if finalized, would lower it to $29.34. The proposed rate for the professional interpretation for CPT 88305 is flat at $39.71. In a nutshell, the Proposed MPFS for 2017 includes some significant cuts to technical reimbursement for several key pathology codes, while proposed reimbursement for most professional services is little changed. CMS is accepting comments on the Proposed MPFS through September 6, 2016. Final rates are expected to be announced in October and become effective January 1, 2017.

CMS says the proposed 15% reduction to CPT 88305-TC relates to an update that reflects reduced costs for eosin stain supplies. For similar reasons, CMS has proposed significant TC rate reductions for 16 other pathology codes, including CPT 88302, 88304, 88307, 88309, 88323, 88325, 88364, 88365, 88366, 88367, 88368, 88369, 88373, 88374, 88377 and G0416.

Among other significant proposed changes are 19% reductions for the flow cytometry codes CPT 88184, 88185 and 88189. Further significant reductions to flow cytometry are expected in 2018 as well.

On the positive side, global reimbursement for digital pathology (CPT 88361) has a proposed hike of 4% to $155.98, including a 1% increase to $61.18 for the professional interpretation and a 7% increase to $94.80 for the technical component.

Source: Laboratory Economics