Proposed Medicare 2021 PFS Cuts Pathology Fees by 9%

IF THE PROPOSED MEDICARE 2012 PHYSICIAN FEE SCHEDULE (PFS) RULE‚ÄĒpublished by the Centers for¬†Medicare and Medicaid Services (CMS)¬†on Aug. 4‚ÄĒtakes 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. ‚ÄúThese cuts¬†come at a terrible time in light of COVID-19¬†for pathologists and the laboratories they¬†lead,‚ÄĚ said President Patrick Godbey, MD,¬†FCAP, President of CAP. ‚ÄúReductions in¬†Medicare payment, coupled with ongoing financial pressures of the COVID-19 pandemic,¬†will have negative implications for¬†pathologists‚ÄĒparticularly those in rural and¬†healthcare shortage areas.‚ÄĚ

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. ‚ÄúTelemedicine has become more¬†acceptable and payable,‚ÄĚ said Raich. ‚ÄúAs¬†the proportion of visits using telemedicine¬†increases, there are significant cost¬†changes in primary care delivery.

Lower Cost for Telemedicine

‚ÄúThe 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?‚ÄĚ he asked. ‚ÄúIf I¬†were CAP, I would work this angle.

‚ÄúAlso, 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,‚ÄĚ added Raich. ‚ÄúPrivate 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.‚ÄĚ



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