Pathology/Lab Coding Alert

The feds have a lot to say about coverage and reimbursement for your pathology and clinical laboratory services this year.

Let our experts interpret the big takeaways you need to know from the Medicare Physician Fee Schedule (MPFS) final rule, plus a last-minute Congressional rescue plan.

Details: On Dec. 10, 2021, President Joe Biden signed the Protecting Medicare and American Farmers from Sequester Cuts Act into law, overriding scheduled payment reductions outlined in the MPFS. Read on for details you need to know.

Recognize Conversion Factor Relief

Chief among the scheduled payment reductions in the MPFS, the massive cut to the conversion factor (CF) loomed large for providers.

Backstory: After the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2022 MPFS in November 2021, a general outcry arose over the 1.30 decrease to the CF, dropping it from 34.89 to 33.59. Plus, as the 3.75-percent increase to the CF mandated by the Consolidated Appropriations Act, 2021 (CAA) was set to expire, provider groups voiced concerns over the payment cuts moving into 2022.

Action: Congress increased the final-rule CF rate for 2022 by 3 percent, according to the Dec. 10, 2021, legislation, to 34.6062. That’s a much smaller reduction from the 2021 rate of 34.89.

Reminder: Simply put, the CF is a critical part of the resource-based relative value scale (RBRVS), the complex formula CMS uses to establish payment for services. CMS uses relative value units (RVUs) for services based on the work, practice expense (PE), and malpractice insurance (MP) involved. They are then “adjusted by geographic practice cost indices (GPCI) to reflect the variations in the costs of furnishing the services,” CMS reminds in guidance. Then everything is multiplied by a final multiplier — the CF — to produce a dollar value using the following formula:

Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU MP × GPCI MP)] × conversion factor (CF).

The American Medical Association (AMA) lobbied Congress from the get-go on this CF change. “The wheels of Congress don’t always move quickly, but today they did move toward preserving the viability of physician practices and maintaining access to care,” said AMA President Gerald E. Harmon, MD, in a release related to the legislation.

Glean More Payment Rescue Benefits

In addition to raising the 2022 CF, the Dec. 10, 2021, legislation provides the following payment relief:

Clinical labs: The feds pushed out the Medicare Clinical Lab Fee Schedule (CLFS) rate reductions until 2023, with no payment reductions for calendar years (CYs) 2021 and 2022. Plus, CLFS payment won’t be reduced by more than 15 percent for CYs 2023 through 2025, according to the law.

The legislation also grants private payer reporting relief, with the next data reporting period scheduled for Jan. 1-March 31, 2023, and reporting based on the original data collection period of Jan. 1-June 30, 2019, according to an MLN Connect post from Dec. 16, 2021.

Medicare sequestration: The Budget Control Act, which originated in 2011, mandates annual sequestration updates. The 2 percent sequestration cut that would apply to all Medicare rates beginning Jan. 1, 2022, is postponed until April 1, 2022. Sequestration cuts for the period from April 1, 2022, through June 30, 2022, are reduced from 2 percent to 1 percent, according to the law.

PAYGO sequestration: Medicare sequestration decreases under the statutory Pay-As-You-Go (PAYGO) policy are delayed until 2023, the legislation indicates. PAYGO refers to a rule requiring new legislation to be budget neutral or be offset in other areas.

Nixing the 4-percent PAYGO cut “removes the uncertainty these cuts were creating for our nation’s caregivers,” says Rick Pollack, American Hospital Association (AHA) President and CEO in a statement on the Act.

Understand Pathology Consultation Payment Impact

The MPFS final rule weighed in on pricing for the following new CPT^® 2022 consultation codes that replaced deleted codes 80500 and 80502 (Clinical pathology consultation …)

• 80503 (Pathology clinical consultation; for a clinical problem, with limited review of patient’s history and medical records and straightforward medical decision making When using time for code selection, 5-20 minutes of total time is spent on the date of the consultation.)
• 80504 (… for a moderately complex clinical problem, with review of patient’s history and medical records and moderate level of medical decision making. When using time for code selection, 21-40 minutes of total time is spent on the date of the consultation)
• 80505 (… for a highly complex clinical problem, with comprehensive review of patient’s history and medical records and high level of medical decision making When using time for code selection, 41-60 minutes of total time is spent on the date of the consultation)
• +80506 (… prolonged service, each additional 30 minutes (List separately in addition to code for primary procedure)

RVUs: CMS accepted the work RVUs recommended by the RVS Update Committee (RUC) for codes 80504 and +80506, but rejected the higher work RVUs for codes 80503 (0.50) and 80505 (1.80). For 2022, CMS finalized the work RVUs for 80503 at 0.43, for 80504 at 0.91, for 80505 at 1.71, and for +80506 at 0.80.

Other expense: CMS agreed with the RUC’s recommendation to add practice expense (PE) value for compound microscope equipment time and clinical labor activity associated with codes 80503-+80506.

Translation: Based on the final CF and total RVUs you can expect the following nonfacility national payment amount in 2022:

• 80503: $26.65
• 80504: $53.29
• 80505: $96.55
• +80506: $43.26

That compares to 2021 payment of $22.33 for 80500 (… limited, without review of patient’s history and medical records) or $72 85 for 80502 (… comprehensive, for a complex diagnostic problem, with review of patient’s history and medical record) (nonfacility national amount, CF 34.89).

COVID Specimen Collection: Win Some, Lose Some

Since March 31, 2020, independent labs have been able to bill for a specimen collection fee and associated travel allowance for collecting specimens for COVID-19 testing for homebound and nonhospital inpatients using one of the following codes during the public health emergency (PHE):

• G2023 (Specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), any specimen source) Clinical Laboratory Fee Schedule (CLFS) pay $23.46
• G2024 (… from an individual in a SNF or by a laboratory on behalf of a HHA, any specimen source) CLFS pay $25.46

Although stakeholders had responded affirmatively to CMS’ request for input about continuing these codes and payment levels after the PHE, the agency’s answer in the final rule is “no.” CMS holds “that the laboratory specimen collection fees for COVID-19 CDLTs [clinical diagnostic laboratory tests] established in the context of and for the duration of the PHE for the COVID-19 pandemic should conclude at the termination of the PHE.” Xavier Becerra, Secretary of Health and Human Services extended the PHE again, effective Jan. 16, 2022.

Travel allowance: Labs had better luck with the travel allowance rules, with the MPFS granting permanence to the option for labs to maintain electronic logs of miles traveled for trained personnel to collect a specimen. “This option for laboratories to maintain electronic logs is not limited to COVID-19 specimen collection and applies to specimen collection for any CDLT [clinical diagnostic laboratory test],” according to the final rule.

Resources: Review the MPFS final rule at www.federalregister.gov/documents/2021/11/19/2021-23972/medicare-program-cy-2022-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part, the Dec. 10, 2021 law at www.congress.gov/117/plaws/publ71/PLAW-117publ71.pdf, and the Dec. 16, 2021 MLN post at www.cms.gov/outreach-and-educationoutreachffsprovpartprogprovider-partnership-email-archive/2021-12-16-mlnc#_Toc90391082.