Pathology/Lab Coding Alert

If you want a peek at your lab’s future — financial and otherwise — look no further than the latest proposal by the Centers for Medicare & Medicaid Services (CMS).

What: On August 7, CMS published the calendar year (CY) 2024 Medicare Physician Fee Schedule (MPFS) proposed rule in the Federal Register.

Focus: CMS’ stated mission “is to expand access to health care and ensure that health coverage is meaningful to the people we serve,” according to CMS Administrator Chiquita Brooks- LaSure in a press release about the proposed rule.

Plus, changes for 2024 “demonstrate commitment to advancing health equity and building a stronger Medicare program,” said Meena Seshamani, MD, CMS Deputy Administrator and Director of the Center for Medicare, in the release.

Winners and losers: Put together, these goals help buttress payment for primary care services, while necessitating payment decreases for other specialties.

Read on to see how the rule could affect independent labs and pathology practices next year.

Swallow the CF Bitter Pill

With inflation raging and providers attempting to climb out of the financial hole created by COVID-19, many hoped CMS would not decrease the CY 2024 conversion factor (CF) — which is the multiplier for Medicare payment. But that’s not to be.

Instead, the CY 2024 MPFS overall proposed payment amounts would be reduced by 1.25 percent compared to CY 2023, in accordance with factors specified by law. “CMS is also proposing increases in payment for many visit services, such as primary care, and these proposed increases require offsetting and budget neutrality adjustments to all other services paid under the PFS,” according to a CMS fact sheet. The proposed CY 2024 PFS conversion factor is $32.75, a decrease of $1.14, or 3.34 percent, from CY 2023.

Offset not enough: “While Congress has provided temporary partial fixes to physician payment in the last several years, its latest fix in the Consolidated Appropriations Act, 2023 (CAA, 2023), enacted at the end of 2022, does not offset all the proposed cuts in this rule,” cautions McDermott + Consulting, an affiliate of law firm McDermott Will & Emery, in a rule summary. “In all, the budget neutrality constraints of the fee schedule continue to result in a negative proposed conversion factor (CF) update,” the firm says.

Refresher: In the CAA, 2023, legislators decided instead of completely overhauling the 4.5 percent CF cut for CY 2023 that they’d offer a two-part solution that also impacted CY 2024. Under that legislation, Congress provided a 2.5 percent statutory payment increase for CY 2023 and the 1.25 positive payment adjustment for CY 2024.

CMS’ proposal “reflects the expiration of the 2.5 percent statutory payment increase for CY 2023; a 1.25 percent statutory payment increase for 2024; a 0.00 percent conversion factor update under the Medicare Access and CHIP Reauthorization Act [MACRA]; and a -2.17 percent budget-neutrality adjustment,” an American Hospital Association (AHA) fact sheet on the rule clarifies.

Specifically: The proposed MPFS indicates the overall impact to pathology payments from 2023 to 2024 would decrease by 2 percent, while independent labs would decrease by 1 percent.

Industry concerns: “When adjusted for inflation, Medicare physician payment already has effectively declined 26 percent from 2001 to 2023 before additional inflation and these cuts are factored in,” said AMA President Jesse M. Ehrenfeld, MD, MPH, in a release. “This is almost biblical in its impact,” he argues. “Seven lean years that include a pandemic and rampaging inflation. Physicians need relief from this unsustainable journey.”

Expect Quality Payment Changes

In 2024, pathologists reporting under the traditional Merit-based Incentive Payment System (MIPS) will need to act to avoid penalties that reduce payment for Part B services.

Although the pathology specialty measure set remains the same, you need to know how CMS proposes to change the scoring threshold for 2024:

• Raise the performance threshold (quality, promoting interoperability, cost, and improvement activities) to 82 points, up from 75 points in 2023 while failure to meet the performance threshold could result in up to 9 percent payment reductions (penalty) for CY 2026.
• Raise the data completeness threshold (percent of cases you report compared to what you should report) to 75 percent beginning in 2024, increasing to 80 percent in CY 2027.

Advanced Alternative Payment Models (APMs): For practices using an APM instead of MIPS, CMS proposes to modify the certified electronic health record technology (CEHRT) requirements. The proposed rule also incorporates CAA 2023 changes, extending the APM incentive payment of 3.5 percent through the 2025 payment year.

Keep an Eye on CLIA RFI

The MPFS proposed rule issues a request for information (RFI) regarding regulation of histopathology, cytology, and clinical cytogenetics under the Clinical Laboratory Improvement Amendments (CLIA). CMS states the intention to develop final regulations on those three topics to accomplish the following goals:

• Incorporate method and quality standards regarding tissue processing and slide staining into the CLIA certification process.
• Make permanent the COVID-19 public health emergency (PHE) discretion allowing pathologists to remotely review slides.
• Make permanent the COVID-19 PHE discretion allowing cytogeneticists to remotely review images.

Heads up: If you want to offer your two cents on the proposed rule, you have until Sept. 11 to weigh in.

Resource: Find the CY 2024 MPFS proposed rule and comment at https://public-inspection.federalregister.gov/2023-14624.pdf.