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Pⁿ Blog
The Pⁿ Blog is a forum for opinions, questions, controversies, and instructive discussions across the field of pathology and its relevant subspecialties.
Wednesday, January 02, 2013
Happy 2013 to All!
If you're involved in laboratory administration, in a lab of any size, you're undoubtedly aware of the recent re-evaluation of Medicare/Medicaid payments for the 88305 charge code.  You may be aware anyway, but if not perhaps this blog will shed a bit of light on this troubling topic.  
In summary, the Centers for Medicare/Medicaid Services (CMS) released its new fee schedule on November 1st.  Part of this schedule was the result of a review of the high-volume 88305 charge code and a reduction of the reimbusement of the technical component (TC) of this code by 52%!  As a small "bone" thrown in our direction, the professional component (PC) reimbursement was increased by a whopping 2%.  There are other less drastic cuts as well, but I'll focus on the 88305.  More detailed (and rather numbing) discussions can be easily found on the internet.  
Given the intense pressure to cut government heath care spending and the fact that the TC of the high-volume 88305 code had not been reviewed since 2000, it's not surprising that it came under close scrutiny.  More of the same is undoubtedly coming in future years, with the CMS already announcing that they are targeting the PC of immunohistochemistry evaluations and enhanced cytology procedures (among others) for next year.  Pathologists can take some minor solace in the fact that we are not alone, as virtually all medical specialties have been targeted for review and "cost savings."   The only beneficiaries of this on-going process are likely to be primary care physicians who have historically been greatly undervalued.
Although it's uncertain if the CMS had this specifically in mind (as opposed to just overall cost reduction), it is clear that the marked reduction in the TC of the 88305 code will have a dramatic effect on small independent and "in house" labs.  The historically "generous" TC for the 88305 led many physician groups to form their own pathology laboratories to capture this technical charge.  The impetus for that approach has now virtually disappeared.  Considerable economy of scale, beyond the reach of many small labs, will be needed to break even on the diminished technical reimbursements for the small biopsies that are the bread and butter of these labs.  I suspect that we are about to see a LOT of consolidations of small laboratories in order to achieve viable specimen volumes.
Most (?all) third party payers will undoubtedly all too eagerly follow the CMS lead and reduce their payments as well.  Many already have their reimbursements specifically tied to the Medicare fee schedule.  Of course, as insurance purchasers, we can all look forward to the third party payers passing these savings on to us in the form of reduced rates!  Hah!!  Pardon me!  I drifted off to Never Never Land there for a second.
Dr. Nusrat Hussain said:
Hi, If this is a blog, shouldn't I see all the posts by "other" people on board for discussion? Regards NH (SEM:) This is a moderated blog. You're seeing all of the appropriate "on topic" posts and with rare exception all of the posts.
About the Author

Stacey E. Mills, MD
Stacey E. Mills, MD, a graduate of University of Virginia (UVA) and the UVA Medical Center, has authored nearly 230 articles, 20+ books, atlases and monographs—including the renowned Sternberg's Diagnostic Surgical Pathology. He has been a practicing Professor and Staff Pathologist at UVA for 30+ years and is Director of Surgical Pathology and Cytopathology. His clinical specialty is general surgical pathology with emphasis on neoplasms and neoplasm-like lesions. Dr. Mills is also Editor-in-Chief of The American Journal of Surgical Pathology.