In Office Pathology Unmentioned in New Medicare Fee Schedule

Despite the issuance of the Mitchell study in Health Affairs, which was highly critical of the efficacy of physician office based anatomic pathology, the proposed payment regulations for Medicare for 2013 don’t even mention in office pathology laboratories.  The Mitchell study documented a substantially higher biopsy rate in certain urology practice based anatomic laboratories without a corresponding increase in the detection of cancer.  In essence, the number of negative tissue samples was simply higher in these labs than in free standing or hospital based labs dealing with similar tissue and diagnoses.
 
The lack of a specific recommendation for the treatment of such laboratories in the proposed payment regulations, however, does not eliminate the concerns of regulators or health plan administrators about such labs.  States continue to consider practices such as direct billing or disclosure of such arrangements in physician practice billing. Several commercial plans are requiring CAP or JCAHO accreditation of the labs for them to be eligible for payment.  There are specific coding issues for urological pathology that are being considered which would reduce the profitability of such services.  And finally, the entire technical payment for 88305 is under review for reduction.  Any or all of these efforts could have a significant impact on the profitability of providing such services in a physician’s office setting.
 
Pathologists and physician practices that provide in office pathology need to be aware that changes may be made through less obvious mechanisms, such as place of service rules, which will impact the payment for such services.