The 2022 MPFS Proposed Rule & Its Impact on Pathology and Labs

Overview
On July 13, 2021, the CMS published its 2022 Medicare Physician Fee Schedule (MPFS) Proposed Rule. The updates in this proposal affect payment rates, payment policies, and other provisions of services contained in the Medicare Physician Fee Schedule (MPFS) on or after January 1, 2022. If accepted as is, these changes will yield a series of payment reductions for pathologists and independent laboratories. The CMS will be accepting comments on these proposed changes until September 13, 2021, and the Final Rule will go into effect January 1, 2022.

As it stands, the current rule proposes a 1% overall reduction in pathology reimbursements, in addition to a 3% decrease for independent laboratories and 6% decreases for diagnostic testing facilities. The reductions come as the result of budget neutrality requirements which necessitate balancing increases in some areas with cuts in others. They are further exacerbated by the expiration of the 3.75% payment increase passed by Congress in 2020 which provided a brief period of support. The conversion factor in this proposed rule is $33.58, which marks a decrease of $1.31 from the 2021 conversion factor.

New Clinical Consult Codes
The cuts for pathology are largely influenced by replacing the current pathology consultation services codes (80500 and 80502). These codes have been determined to be misvalued, and, as such, advocates such as the CAP (College of American Pathologists) and the AMA (American Medical Association) have worked to delete those codes and replace them with the new Pathology Clinical Consultation group of four new codes (80XX0, 80XX1, 80XX2, 80XX3). If this change remains in place when the fee schedule is finalized, then pathologists will begin using these new codes to bill services in 2022. In theory, this new coding structure should improve the billing process for providers due to improved instructions and a more refined coding structure.

The new codes apply to situations where physician clinical consultation services are provided at the request of another physician or qualified health care professional. The professional making the request may belong to the same or another facility.

According to CPT® (Current Procedural Terminology), the codes are reported when:
•    The pathologist renders a pathology clinical consultation at the request of a physician or qualified healthcare professional at the same or another institution.
•    The pathology clinical consultation request concerns pathology and laboratory findings or other relevant clinical or diagnostic information requiring additional medical interpretative judgment.

Below are a few of the relevant changes to codes in the proposed fee schedule:

For a full list of codes and proposed changes, please see the MPFS impact table. Note that most codes, other than pap smear screenings, experience a medium to significant decrease in proposed fee. This will likely have a negative impact on your practice’s revenue stream.

Clinical Laboratory Fee Schedule (CLFS)
Also relevant to future billing for pathologists is the CLFS. Due to the unusual circumstances created by Covid-19, CLFS data reporting is being delayed. The Protecting Access to Medicare Act of 2014 (PAMA) established a system to determine fair and reasonable rates for clinical laboratory services. This system relies on collecting extensive data from laboratories and their billing practices to set future rates for the services performed. However, because the data during the Covid-era is not representative of normal business practices, the Further Consolidated Appropriations Act of 2020 (FCAA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act have made adjustments to this process to accommodate the gap in reliable data caused by the coronavirus. The revisions made are as follows:

•    The next data reporting period of January 1, 2022 through March 31, 2022, will be based on the original data collection period of January 1, 2019 through June 30, 2019. 
•    After the next data reporting period, there is a three-year data reporting cycle for CDLTs (Clinical Diagnostic Laboratory Tests) that are not ADLTs (Advanced Diagnostic Laboratory Tests) (that is 2025, 2028, etc.).
•    The statutory phase-in of payment reductions resulting from private payor rate implementation is extended through Calendar Year (CY) 2024. There is a 0.0 percent reduction for CY 2021, and payment may not be reduced by more than 15 percent for CYs 2022 through 2024.

The chart below illustrates the data collection and reporting periods moving forward, as well as the reduction caps associated with each timeframe:

CMS has also requested feedback regarding reimbursement levels for homebound patients’ specimen collection, which experienced a significant increase in payments from $3-5 to $23-25 for Covid-19 specimen collection from homebound beneficiaries. This payment will likely come back down now that we are moving beyond the Covid-era, but CMS would still like feedback on what the appropriate level of reimbursement for homebound specimen collection.

Naturally, many things are still up in the air as this is the comment period for the proposed rule. Advocates for pathologists are in the process of reviewing the proposed changes and evaluating the effectiveness and fairness of these potential changes. 

APS will monitor the developments in these discussions and advocate for our clients’ interests to the fullest extent of our ability.