Pathologists Can Still Earn Medicare PQRI Incentives

Federal program offers pathologists a 2% bonus during 2010 for reporting required quality measures

CEO SUMMARY: During 2010, the Medicare Physician Quality Reporting Initiative (PQRI) will pay a 2% bonus to pathologists who register and report data on 80% of their cases for the specified CPT codes. However, independent pathology laboratories still cannot participate in the PQRI program. Also, PSA, LLC, reports it can be challenging to audit the Medicare PQRI bonus amount paid at year’s end against the actual amount that was billed to Medicare by individual pathologists for the CPT codes included in the PQRI program.

IT’S OFTEN SAID THAT WHAT THE GOVERNMENT GIVES WITH ONE HAND, it takes away with the other. That statement might accurately describe Medicare’s Physician Quality Reporting Initiative (PQRI), at least as it pertains to pathologists.

Now entering its third year, the PQRI program does offer pathologists a way to get paid more for selected types of cases. But upon receipt of the bonus checks at year end, it is not easy to determine whether Medicare accurately paid the correct bonus amount to participating pathologists.

“When the program was initially made available to pathologists in 2008, Medicare paid a 1.5% bonus to pathologists who met PQRI criteria for 80% of their cases involving target CPT codes,” stated John Outlaw, CHC, the Chief Compliance Officer of PSA, LLC, of Florence, South Carolina. “In 2010, pathologists can earn 2% bonuses through Medicare’s PQRI program.

“When PQRI was introduced two years ago, we told our pathology billing clients that we believed CMS would require participation in PQRI at some point in the future,” recalled Outlaw. “That has proved to be right. Passage of the new healthcare reform law in March mandates that PQRI reporting bonuses will be scaled back to 1% beginning in 2011; then reduced further to 0.5% from 2012 through 2014. Beginning in 2015, physicians who do not participate and do not report their data will have their payments reduced by 1.5%. In 2006, the penalty for not reporting increases to 2.0%.”

Can Still Earn Bonus In 2010

Having explained the future mandatory reporting requirement, Outlaw pointed out that any pathologist wanting to earn the 2% Medicare PQRI bonus for 2010 can still register and start reporting quality measures for breast cancer and colon cancer resection, beginning July 1. This is due to a new six-month reporting option for the PQRI program.

“If pathologists report on 80% of these measures from July 1 through December 31, 2010, they will be eligible for a bonus from CMS at year end,” explained Outlaw. “In prior years, if a pathologist had not begun reporting the PQRI measures by mid-March, it was unlikely that he or she would be able to satisfy the requirement to report the measures for at least 80% of the cases. Thus, he or she would miss PQRI incentives for the entire year,” he noted. “In 2010, physicians who start participation by July 1 and meet the 80% goal for the last half of the year will still be eligible for the bonus payment based on the six-month reporting period.”

Pathology PQRI Measures

At present there are only two pathology measures approved for the 2010 PQRI program. Participating pathologists will earn a 2% Medicare bonus of the amount billed to Medicare, upon reporting data on 80% of the cases involving:

• Breast Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) with Histologic Grade;

• Colorectal Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) with Histologic Grade.

One challenge of the PQRI program is how it restricts certain types of pathology groups from participating. “At PSA, almost all our billing clients began reporting when we recommended that they do so back in 2008,” observed Outlaw. “But under Medicare’s rules, independent labs aren’t eligible to participate in the PQRI program.

Independent Pathology Labs

“Medicare classifies independent laboratories as facilities—not as individual physicians nor even as physician group practices. They are considered a facility like a hospital,” he said. “Because the Medicare claims system doesn’t permit independent laboratories to report services by individual physicians, they can’t quality for the PQRI bonus. This is frustrating for independent labs.” (See TDR, August 18, 2008.)

Another challenge to participation in the PQRI program is determining the accuracy of the bonus payment sent by Medicare. “When the Centers for Medicare and Medicaid Services (CMS) distributed reimbursement checks in the fall of 2009 to pathologists who participated in PQRI in 2008, it was a lump sum total for a single pathology practice,” said Stephanie Denham, CPA, PSA’s audit supervisor.

“That made it difficult to precisely map the 1.5% bonus paid against the total amount billed to Medicare that year,” she explained. “After all, the correct bonus payment amount must be verified for each individual pathologist in that group, since some qualified for the PQRI bonus that year and some did not.”

PSA President Al Sirmon, CPA, explained, “For example, if one of our client pathologists collected $1 million in 2008 from Medicare, this pathologist should expect a 1.5% bonus from Medicare last year, or $15,000. However, if the practice received a $12,000 bonus, the verification process is so cumbersome the client may choose not to try to verify how Medicare calculated the bonus for their practice.

Tracking PQRI Data

“Because of the time-consuming procedures required to go back to Medicare officials to get a more detailed accounting of the PQRI bonus payment, we’ve built edits and features into our software to make it easy to record the data on how pathologists are complying with these PQRI measures,” he said. “Going forward, our clients have a detailed audit trail that will help us verify the accuracy of future PQRI payments.”

Pathologists and practice administrators interested in participating in PQRI still have time to register and begin reporting by the July 1 deadline. In the meantime, independent pathology laboratories are excluded from participation in the PQRI bonus program and tracking the accuracy of the Medicare incentive payments remains difficult.


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