CAP Lobbies for 6.6% Medicare Rate Hike

by Jondavid Klipp | Feb 18, 2025 | CAP, CLIA, CMS, College of American Pathologists

CAP Lobbies for 6.6% Medicare Rate Hike

The College of American Pathologists (CAP), as well as the American
Medical Association (AMA), are lobbying Congress to pass a bill that
would hike Medicare payments to pathologists and other physicians by
6.6%. The potential rate hike would become effective April 1, and would
more than offset the 2.8% rate cut that took effect January 1, 2025.

CAP Lo Co o 6.6% M R Hk (cont’d from page 1) The bipartisan bill is called the Medicare Patient Access and Practice Stabilization Act of 2025 (H.R. 879). This bill would raise the conversion factor (CF) used to set Medicare rates for all physicians by 6.6% to $34.49 effective April 1. It would reverse the 2.8% payment cut that took effect on January 1, while also granting a payment adjustment for inflation plus a bump to reflect the lower CF in effect during the first quarter of 2025.

With the federal government facing a March 14 funding deadline, the best opportunity for passage is for this bill to be packaged with a larger spending bill to keep the government open, CAP President Donald Karcher, MD, tells Laboratory Economics. He says that the House could certainly pass it as a standalone bill because representatives have overwhelmingly supported similar Medicare payment increases for physicians in the past. But getting it through the Senate by itself would be challenging.

In addition to CAP and AMA, dozens of other physician groups support the bill, including the Medical Group Management Association (MGMA), the California Medical Association and the American Society for Clinical Pathology (ASCP).

The bill was introduced by Rep. Greg Murphy (R-NC) on January 31 and currently has 49 cosponsors (25 Republicans/24 Democrats).

If passed into law, Medicare Physician Fee Schedule reimbursement for CPT 88305 (Level IV, tissue exam) would rise by 6.6% to a global rate of $74.14 from its current rate of $69.54. The Medicare rate hike would impact other pathology services as well as influence the rates paid by Medicaid and private health insurance plans.

Physician groups argue that a rate hike is needed to offset inflationary pressures. CMS has estimated that the Medicare Economic Index (MEI), a cumulative measure of the individual costs of running a practice, will increase by 3.5% this year after a 4.6% increase in 2024.

CAP Has “Serious Concerns” with UnitedHealthcare’s Z-Code Rollout

by Jondavid Klipp | Jul 19, 2023 | College of American Pathologists, Z-Codes

CAP Has “Serious Concerns” with UnitedHealthcare’s Z-Code Rollout

The College of American Pathologists (CAP) has sent a letter to Optum requesting a meeting to discuss its partnership with Palmetto GBA and UnitedHealthcare’s new Z-code requirement. CAP and Optum are in the process of scheduling the meeting, says Jonathan Myles, MD,
Chair of CAP’s Council on Government and Professional Affairs.

Myles notes that HIPAA designated AMA CPT as the official code set for use in claims, and CAP made the argument back when the Z-codes first started that it violated HIPAA to require the use of an alternative code set. Only CMS (HCPCS level II codes) or the AMA (CPT codes) may develop code sets for laboratory services under HIPAA. If a provider desires to file an electronic
health care claim, a health plan must accept such a transaction that is filed in HIPAA standard format. Furthermore, only HIPAA-approved code sets may be required by a plan in connection with electronic health care claims, adds Myles.

Myles maintains that the existing CPT Editorial Panel has the infrastructure and capacity to process code requests on a quarterly basis, provide transparency and offer a public forum at regular intervals several times a year. This process would be the appropriate method for insurers to address any issues with information on specific tests without adding further requirements and reporting complexity.

CAP has requested that Optum and UHC remove Z-code requirements.

AMA Announces New Add-On Digital Pathology Codes

by Jondavid Klipp | Jul 25, 2022 | AMA, College of American Pathologists, Digital Pathology

AMA Announces New Add-On Digital Pathology Codes

The American Medical Association (AMA) CPT Editorial Panel has
announced 13 new digital pathology add-on codes effective on January
1, 2023. The new digital pathology Category III CPT codes will be used
to report additional clinical staff work and service requirements associated
with digitizing glass slides for primary diagnosis.

Introduction of the codes will allow CMS to monitor the usage of digital
pathology. However, no relative value units (RVUs) or national payment
rates have been assigned to the new codes.

“It’s an important first step, but widespread use in clinical practice will
need to be demonstrated before the new codes are moved to Category I
and assigned RVUs,” notes Jonathan Myles, MD, Chair of the Council
on Government and Professional Affairs at the College of American
Pathologists (CAP).

The new digital pathology add-on codes are linked with 13 of the most commonly billed pathology procedures, including CPT 88305 (Level IV-Tissue Exam). CAP’s Myles says that the new add-on codes should only be reported when used for clinical diagnosis and not for things like archiving slides, training or validation of AI algorithms, or tumor board conferences. “It’s clear that digital pathology will be a part of the practice of pathology and lab medicine, but it has to be proven to be in widespread clinical use to gain Medicare reimbursement,” says Myles.

Assuming that digital pathology volumes prove to be significant, the very earliest that CMS could assign RVUs and establish national payment rates for the new add-on codes would be for an effective date of January 1, 2024, notes Laboratory Economics. However, the process is more likely to take at
least a few years. In the meantime, each individual Medicare Administrative Contractor (MAC), as well as private insurers, could establish their own payment rates, but are not required to do so.

Many pathology labs in the United States are experimenting, but very few have gone fully digital, according to Michael Rivers, Vice President and Lifecycle Leader for Digital Pathology, Roche Tissue Diagnostics (Santa Clara, CA). “Digitization is a means to an end. It will allow the application
of innovative AI solutions to pathology images and ultimately integrated multi-modal analysis of patient cases combining anatomic pathology, clinical lab and gene-sequencing data,” says Rivers.

“My prediction is that if the Category III codes are converted to Category I code status, in the future Medicare could potentially reimburse the new add-on codes at roughly 3% to 5% of the global rates for related existing codes,” says Erick Lin, MD, PhD, Senior Director, Medical Affairs, PathAI (Boston, MA). Thus, the add-on code for digitizing one unit of CPT 88305 (current global rate of $72) could be reimbursed at between $2 and $4. The key is for all pathology labs to be aware of the new add-on codes, prepare systems to report, and then begin reporting the new codes effective January 1, 2023. If all clinical utilization is appropriately reported on claims, it can help facilitate Medicare’s establishment of national reimbursement rates, explains Lin.

“Although digital pathology, including usage of AI algorithms, could improve pathologist efficiency, this should not be the sole focus of reimbursement calculations. Digital pathology helps labs and pathologists expand their network of brainpower through greater access to information,
second opinions and subspecialist expertise. This ultimately could lead to optimized diagnostic decision-making and inherently leads to better patient management,” according to Esther Abels, Chief Clinical and Regulatory Officer, Visiopharm Corp. (Westminster, CO) and President of the Digital Pathology Association (Carmel, IN).