Understanding the 2014 Proposed Medicare
Physician Fee Schedule
Jonathan Myles, MD, FCAP
Stephen Black-Schaffer, MD, FCAP
Emily Volk, MD, FCAP
August 7, 2013
cap.org
v. #
Overview
• CMS proposed to link payment for over 200 services
to hospital outpatient APC rates as part of its
“misvalued code” initiative.
o Reduces TC and Global of 39 pathology codes
billed for non-hospital patients
o Responsible for 5% overall cut to pathology
Medicare payment
• Impact on individual practices depends on case
mix.
o Medicare PC only billers are not impacted
o Global and TC billers will see larger impact
© 2013 College of American Pathologists. All rights reserved.
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Overview Continued
• Other unrelated policy changes to Medical
Economic Index weights increase PC only rates.
• Other 2014 changes expected in final 2014 rule due
to continued revaluation of high volume pathology
codes
o 88305 TC values still under review
o Immunohistochemistry PC and TC
o Enhanced Cytology PC and TC
o In situ hybridization PC and TC
© 2013 College of American Pathologists. All rights reserved.
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Problem with Hospital Outpatient Linkage
• Physician fee schedule pays for specific resources
• Hospital APC grouping represents average costs for
a group of codes
o Codes grouped into APCs based on comparable resource
utilization
o Median costs determined for each code
o Codes are not similar if the resource costs of the highest is
more than 2 times the cost of the lowest
• Some code costs are higher, some lower than APC
rate
• Specific resources per code lost under APC
© 2013 College of American Pathologists. All rights reserved.
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APC Payments as % of CMS Direct Cost Inputs
APC payment rate as % of CMS direct cost inputs
Cytology services
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
88309
88323
88325
88329
88331
88333
88334
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
88104
88106
88108
88112
88160
Special study services
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
8
36
36
7
88
5
88
36
36
3
88
2
88
36
36
1
88
0
88
5
35
36
88
9
88
8
34
88
34
7
88
6
34
88
34
2
88
9
34
88
31
31
4
88
3
88
31
31
2
88
5
88
18
4
18
88
88
2
0%
18
88307
88
88304
APC payment rate as % of CMS direct cost inputs
APC payment rate as % of CMS direct cost inputs
Surgical pathology services
88161
88162
88173
Impact of Proposed Changes
• Top 10 code reductions based on billing volume:
o 88307 (global) Tissue exam by pathologists
-50%
o 88342 (global Immunohistochemistry
-27%
o 88312 (global) Special stains group 1
-46%
o 88313 (global) Special stains group 2
-45%
o 88112 (global) Cytopath cell enhanced tech
-22%
o 88185 (TC) Flow cytometry/tc add-on
-75%
o 88309 (global) Tissue exam by pathologists
-30%
o 88173 (global) Cytopath eval fna report
-25%
o 88367 (global) Insitu hybridization auto
-60%
o 88108 (global) Cytopath concentrate tech
-39%
© 2013 College of American Pathologists. All rights reserved.
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Impact of Proposed Changes
• Top 10 code increases based on billing volume:
o 88305 (PC) Tissue exam by pathologists
4%
o 88342 (PC) Immunohistochemistry
5%
o 88305 (global) Tissue exam by pathologist
1%
o 88307 (PC) Tissue exam by pathologist
3%
o 88112 (PC) Cytopath cell enhance tech
4%
o 88331 (PC) Path consult intraop 1 bloc
3%
o 88312 (PC) Special stains group 1
3%
o 88309 (PC) Tissue exam by pathologists
3%
o 88173 (PC) Cytopath eval fna report
3%
o 88313 (PC) Special Stains group 2
5%
© 2013 College of American Pathologists. All rights reserved.
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CAP’s View
• CAP opposes this new round of fee reductions
• Medicare has a process for reviewing and revaluing
codes it believes are misvalued
• Payment linkage to the hospital outpatient rates
fails to take into consideration the technical costs
associated with specific individual codes
• Current law requires physician fee schedule values
to be resource based. Linking payment to the
hospital outpatient grouping system fails to
recognize distinct resources.
© 2013 College of American Pathologists. All rights reserved.
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CAP’s Response
• CAP has a three pronged strategy to fight the
proposal:
1. Regulatory
2. Legal
3. Legislative
© 2013 College of American Pathologists. All rights reserved.
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CAP’s Response: Regulatory
• Key message to CMS
o Hospital APCs represent average payment for a
group of services and fail to account for specific
resources per test
o Average hospital costs are not equivalent to
code specific laboratory costs
o Submit invoices of supply costs which exceed
APC rates
o Present legal argument that APCs violate law
requiring resource based physician fees.
© 2013 College of American Pathologists. All rights reserved.
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CAP’s Response: Legal
• Obtaining legal analysis affirming argument that
proposal violates current law requiring a resource
based physician fee schedule.
• Coordinate with other medical societies to
strengthen arguments that the APC system is not
resource based for physicians.
• Assess potential for legal action against agency
based on findings.
© 2013 College of American Pathologists. All rights reserved.
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CAP’s Response: Congressional
• Get legislative rider to block payment proposal
• Launch August recess grass roots campaign
• Hold September Hill fly-in
• Established tools to call Congress and contact CMS
© 2013 College of American Pathologists. All rights reserved.
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Get Involved
• CAP is coordinating a grassroots effort to ask
Congress to halt the CMS cuts.
• Visit CAP’s Advocacy Physician Resource Page to:
o Set up meetings with your Member of Congress
during the August congressional recess
o Write letters to your representatives asking them
to halt to CMS cuts
o Write to CMS asking them to abandon the policy
• For help, contact Laura Brigandi at 202-354-7128 or
lbrigan@cap.org
© 2013 College of American Pathologists. All rights reserved.
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Background: PQRS and VBM
Physician Quality Reporting System (PQRS) –
A quality reporting program that provides incentive
payments and payment adjustments to Medicare Part B
reimbursement for eligible professionals based on
whether or not they satisfactorily report data on quality
measures for covered professional services.
Value-Based Payment Modifier (VBM) –
A budget neutral payment adjustment applied to Medicare
Part B reimbursement to physicians based on a measure
of the cost and quality of the services provided to
Medicare patients.
© 2012 College of American Pathologists. All rights reserved.
2
Background: Definitions
Eligible Professionals (EPs):
(1) A physician; (2) a practitioner described in the Act; (3)
a physical or occupational therapists or qualified speechlanguage pathologist; or (4) a qualified audiologists.
Group Practices for the purpose of the PQRS:
A single Tax Identification Number (TIN) with 2 or more
eligible professionals, as identified by their National
Provider Identifier (NPI), who have reassigned their
Medicare billing rights to the TIN.
© 2012 College of American Pathologists. All rights reserved.
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2014 PQRS Incentive and 2016 Penalty
2014 is the last year that an incentive (0.5% Medicare
Part B allowable charges) for successful participation
in the PQRS will be available.
Eligible Professionals (EPs) who do not successfully
report in the 2014 PQRS will be subject to a -2%
penalty on Medicare Part B allowable charges in 2016.
© 2012 College of American Pathologists. All rights reserved.
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2014 PQRS Incentive and 2016 Penalty - Proposed
CMS has proposed raising the number of measures for
successful reporting to 9 in 3 National Quality Strategy
domains (from 3 measures in all prior years):
o Patient and Family Engagement
o Patient Safety
o Care Coordination
o Population and Public Health
o Efficient Use of Healthcare Resources
o Clinical Processes/Effectiveness
© 2012 College of American Pathologists. All rights reserved.
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2014 PQRS Incentive and 2016 Penalty - Proposed
For EPs with <9 applicable measures in the program
will be required to report on all measures that apply
o For EPs in single specialty practices with <9 measures, no
group practice reporting option
o For EPs with <9 measures, no individual registry reporting
options
EPs with fewer than 9 measures are subject to the
Measures Applicability Validation Process
o Typically this has not been an issue for pathologists
The Proposed Rule is silent on how it will address EPs
who do not have measures
© 2012 College of American Pathologists. All rights reserved.
26
2016 PQRS Penalty - Proposed
EPs who do not successfully report in the 2014 PQRS
will be subject to a -2% penalty on Medicare Part B
allowable charges in 2016.
Elimination of the Administrative Claims Option in
2014.
Increase of previous single measure reporting
requirement to 3 measure reporting requirement in
2014 to avoid 2016 penalty.
© 2012 College of American Pathologists. All rights reserved.
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2016 Value-Based Modifier
Groups of 10 or greater who do not successfully report in the
2014 PQRS will be subject to an additional -2% penalty on
Medicare Part B allowable charges in 2016.
All groups of 10 or greater will be automatically subject to
quality tiering for the 2016 VBM; there is no opt out as there
was in 2013
Groups with 10 to 99 EPs who report at least three measures will
not be subject to the VBM downward adjustment but may
qualify for the VBM incentive in 2016.
© 2012 College of American Pathologists. All rights reserved.
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© 2013 College of American Pathologists. All rights reserved.
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2014 PQRS and the 2016 VBM Incentive and Penalty Proposed
CMS is proposing to add a claims-based Group
Practice Reporting Option with respect to the VBM.
Group practices in which 70% of the Members
successfully report as individuals through claims
would get VBM credit for the entire group.
However, the group practice would not get PQRS
credit as a unit.
© 2012 College of American Pathologists. All rights reserved.
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2014 PQRS CAP Proposal
CAP developed and submitted three additional
measures to CMS for inclusion in the 2014 PQRS:
#1 – Lung cancer reporting (biopsy/cytology)
#2 – Lung cancer reporting (resections)
#3 – Melanoma reporting
These were not accepted by CMS for the 2014 PQRS.
CAP will continue to advocate for inclusion of these
measures in the 2015 PQRS
© 2012 College of American Pathologists. All rights reserved.
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ADDITIONAL RESOURCES ONLINE
CAP 2013 Medicare PQRS Resource Center
• Links to CAP-developed pathology measures,
FAQs
CAP 2013 Medicare Physician Fee Schedule
Resource Center
• Links to 2013 Final Rule, FAQs, Statline coverage
© 2012 College of American Pathologists. All rights reserved.
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Webinar Speakers
Jonathan L. Myles, MD, FCAP
Chair, CAP Economic Affairs Committee (EAC)
Stephen Black-Schaffer, MD, PhD, FCAP
Vice-Chair, CAP Economic Affairs Committee
Chair, EAC Payment Policy Workgroup
Emily Volk, MD, FCAP
Chair, EAC Measures and Performance Assessment Workgroup
Presented by the CAP Council on Government and Professional Affairs & CAP Communications.
© 2012 College of American Pathologists. All rights reserved.
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Get Involved!
Talk to your Members of Congress Before Sept 6
Let your members of Congress know about the devastating impact this
will have on your practice, on patient access to important cancer tests,
and on health care jobs
Schedule your district meeting:
Visit the the CAP’s Action Center. (find it on cap.org/advocacy)
Enter your zip code to find your representative.
Edit the email message with the name of your hospital or lab and your availability.
Fill in your name and address under “Sender Information” and send your message.
Let us know when your meeting is scheduled:
Visit the CAP’s meeting tracker.
Enter your name and address to find your representative.
Select the legislator with whom you are meeting.
Enter the details of your meeting.
© 2012 College of American Pathologists. All rights reserved.
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