Proposed Medicare 2021 PFS Cuts Pathology Fees by 9%

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IF THE PROPOSED MEDICARE 2012 PHYSICIAN FEE SCHEDULE (PFS) RULE—published by the Centers for Medicare and Medicaid Services (CMS) on Aug. 4—takes effect as currently written, pathology professional fees will be cut by 9%, effective Jan. 1, 2021. This was not welcome news for the anatomic pathology profession. The proposed 9% cut to Medicare payment for pathology services is the result of CMS deciding to change policy on evaluation and management (E/M) coding.

More for Primary Care Docs

CMS is selectively applying this policy change to certain services. Effectively, CMS would pay primary care physicians more, but to comply with budget neutrality, the agency would shift funds from specialists, like pathologists, who do not bill E/M codes. The College of American Pathologists (CAP) was quick to respond to the publication of the proposed PPS rule. “These cuts come at a terrible time in light of COVID-19 for pathologists and the laboratories they lead,” said President Patrick Godbey, MD, FCAP, President of CAP. “Reductions in Medicare payment, coupled with ongoing financial pressures of the COVID-19 pandemic, will have negative implications for pathologists—particularly those in rural and healthcare shortage areas.”

CAP called on Congressional leaders to delay the proposed non-E/M cuts in 2021, and asked that the budget neutrality requirements for the E/M policy change be waived. This would allow CMS to implement increases in payment for E/M visits, while avoiding drastic payment cuts to other physician services to offset them.

In fact, CAP already helped to secure the signature of 93 members of Congress on a letter to House leadership calling on them to include language waiving budget neutrality before the end of the year. Mick Raich, owner of Vachette Pathology, a pathology practice management firm, notes that since the E/M changes were designed to offset increases in payment to primary care physicians, the current pandemic might render those increases unnecessary.

He points out that one consequence of the COVID-19 pandemic is that more patients and more primary care physicians are using telemedicine for patient visits. “Telemedicine has become more acceptable and payable,” said Raich. “As the proportion of visits using telemedicine increases, there are significant cost changes in primary care delivery.

Lower Cost for Telemedicine

“The cost for a telemedicine visit is about half the cost of an actual visit. If this is taken into account, do primary care providers need a pay raise and lower overhead at the same time?” he asked. “If I were CAP, I would work this angle.

“Also, should the pathology cuts be finalized as proposed, salaried pathologists are likely to take a pay cut, as they are employees of large health systems or corporations and these organizations will reduce pathologist compensation to offset the lower Medicare fees,” added Raich. “Private pathology groups have more options. To offset lower fees, they will look for ways to increase efficiencies. That can include hiring pathology assistants and implementing better technology, such as digital pathology.”

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