Pathology/Lab Coding Alert

The final tally is in — pathologists can expect a 2 percent cut while independent laboratories face a 1 percent reduction in Medicare pay next year. But that’s not all you need to know from the 2024 Medicare Physician Fee Schedule (MPFS) final rule, released Nov. 2, 2023, and published in the Federal Register on Nov.16.

Read on to learn more about pathology quality programs, Clinical Laboratory Improvement Amendments (CLIA) regulation, and the trajectory of Medicare pay.

Examine Budget Neutrality Impact

The Centers for Medicare & Medicaid Services (CMS) finalized the calendar year (CY) 2024 conversion factor as $32.74, a decrease of $1.15 (or 3.4 percent) from the current CY 2023 conversion factor of $33.89. Part of the reduction is due to a tapering of payment from the Consolidated Appropriations Act, 2023 by 1.25 percent for 2024.

However, the pay decrease is largely driven by CMS implementing G2211 (Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. (add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established)) for 2024, allowing increased pay for heavy providers of evaluation and management (E/M) services, such as primary care, while requiring pay reduction for other specialties based on budget-neutrality constraints.

The 2024 pay cut “is an unfortunate continuation of a two-decade march in making Medicare unsustainable for patients and physicians,” according to Jesse M. Ehrenfeld, MD, MPH, American Medical Association (AMA) president, in a statement responding to the final rule.

Impact: Although CMS estimates the CY 2024 MPFS final rule will result in a 2 and 1 percent pay reduction for pathologists and independent labs, respectively, you should consider other factors when forecasting expectations for your particular lab. For instance, independent labs get about 83 percent of their Medicare pay from the Clinical Laboratory Fee Schedule (CLFS), not the MPFS. Plus, CMS agreed with the College of American Pathologists (CAP) to increase cytotechnologist labor rate in the relative value unit (RVU) calculations beginning next year, which will offset pay cuts for procedures that use those services. Look at the following table to see the effect of these changes for some common procedures your lab might perform:

Possible: Remember that Congress may yet step in before the end of the year to cut the 3.4 percent overall MPFS decrease as it has in past years.

“The [College of American Pathologists] CAP asks that [Congress] pass legislation to impact the impending Medicare cuts for 2024, and beyond, until long term relief is enacted into law,” said Donald S. Karcher, MD, FCAP, president of the CAP.

Future: Legislation is in the works that could avert this sort of annual pay reduction in the future. The House GOP Doctors Caucus has announced legislation to change the threshold for updating budget neutrality. “The draft legislation would update the current $20 million budget neutrality threshold under the [M]PFS to $53 million in 2025,” notes McDermott+Consulting, an affiliate of law firm McDermott Will & Emery, in a summary of the legislation. “The $53 million threshold would then be updated by an inflationary factor — the Medicare Economic Index — every fifth year starting in 2030.”

Check Out QPP Regulations

The MPFS limited changes to Merit-based Incentive Payment System (MIPS) as part of the Quality Payment Program (QPP) rule for performance year 2024 as clinicians continue to move toward the newer MIPS Value Pathways (MVPs) and Advanced Alternative Payment Models (APMs).

MIPS roundup: Here’s what to expect in 2024:

• No change to pathology specialty measure set;
• Keep scoring performance threshold of 75 points to avoid penalty; and
• Increase data completeness threshold (percent of applicable cases you must report) to 75 percent.

Reschedule CLFS Reporting and Payment Reduction

The final rule states that for clinical diagnostic laboratory tests (CDLTs) that are not advanced diagnostic laboratory tests (ADLTs), the data reporting period of January 1, 2024, through March 31, 2024, will be based on the data collection period for is January 1, 2019, through June 30, 2019. CMS also finalizes that data reporting will be required every three years beginning January 2024.

Rate reduction: CMS states in the final rule that for CY 2023, payment for a CDLT that is not an ADLT may not be reduced compared to the payment amount established for that test in CY 2022, and for CYs 2024 through 2026, payment may not be reduced by more than 15 percent as compared to the payment amount established for that test for the preceding year.

Resource: You can access the final rule at www.federalregister.gov/public-inspection/2023-24184/medicare-and-medicaid-programs-calendar-year-2024-payment-policies-under-the-physician-fee-schedule.