CMS Releases Medicare Physician Fee Schedule

Jul 17, 2018

Proposed Rule Affects Pricing of Pathology Services, Quality Payment Program and Future CLFS Pricing

On July 12, the Medicare Physician Fee Schedule Proposed Rule for CY 2019 was released by the Centers for Medicare & Medicaid Services (CMS). Not only does it outline the Agency’s proposals for updating Medicare physician payment rates, but it also contains CMS’s proposals for Year 3 of the Medicare Quality Payment Program (QPP) and solicits comments from stakeholders, such as ASCP, on the Clinical Laboratory Fee Schedule (CLFS).

Overall, the impact of the rule for most pathologists is a slight cut in expected reimbursement of one percent, while independent laboratories are expected to see a four-percent increase in Medicare PFS revenues, on average. The exact impact on pathologists and independent laboratories will depend on the mix of services performed. The reduction in physician prices is attributable to reductions in practice expense price inputs. Increases in the technical component for pathology services account for the expected increase in overall payments for independent laboratories.

Independent laboratories receive, on average, 83 percent of their Medicare payments from the CLFS. Prices under that fee schedule continue to decline due to its revaluation per the Protecting Access to Medicare Act (PAMA), so the uptick in prices for technical component (TC) services is welcome news.

The Proposed Rule continues CMS’s goal to increase payments for evaluation and management services (E&M codes) for general practitioners, but it does not appear that CMS adopted a proposal recommended by the Medicare Payment Advisory Commission (MedPAC) in its June report that was projected to reduce fees for pathology, radiology and other specialties by 3.8 percent.

Several pathology services experienced noteworthy changes. CPT Code 85390 (Fibrinolysins screen) will see its price increase from $18.72 to $38.21, a 104-percent increase. In addition, the CPT code 88360 TC Tumor Immunohistochemistry (manual) is proposed to increase from $89.64 to $245.82 (+174 percent). That brings the global price to $289.79 (+112 percent), up from $136.44. CPT Code 88361 TC Tumor Immunohistochemistry (computer assisted) is slated for a proposed (global) price of $267.80 ($148.32 in CY2018). The TC for CPT Code 88365 In situ hybridization (FISH) would rise to $304.94 in CY 2019, up from $137.16. For specifics on how CMS’s would affect pricing for each pathology service, see ASCP’s Medicare PFS Pricing Table for CY 2019.

CMS Reconsidering Data Sources for CLFS

In response to concerns expressed by ASCP, CMS is soliciting comments on the definition of an applicable laboratory. The definition is important because if affects what sort of labs can report data, and by extension what data is used to determine the median prices CMS calculates for each service. ASCP has repeated expressed concern that CMS’s policy of soliciting data almost exclusively from the independent and physician office laboratory sectors results in prices that are not reflective of the overall market price for laboratory services—a statutory requirement imposed on CMS by Congress. CMS’s current approach is resulting in prices that are lower than actual market prices.

CMS Proposes Changes to Medicare Quality Payment Program

Also included in the PFS Proposed Rule are the Agency’s policy updates for the Medicare Quality Payment Program (QPP). The QPP offers two participation tracks: The Merit-based Incentive Payment System (MIPS) and the Advanced Alternative Payment Models (Advanced APMs). CMS described its effort regarding the QPP as a “historic change to modernize Medicare and restore the doctor-patient relationship.” The Agency maintains that the proposed rule increases the amount of time physicians will be able to spend with patients and leverages Electronic Health Records (EHR) technology to support greater interoperability and patient access. 


As part of the Agency’s efforts to reduce burden, CMS has launched its Meaningful Measures Initiative to identify the highest priority areas for quality measurement and quality improvement to assess the quality of care issues that are most vital to advancing pathologists’ work to improve patient outcomes. Along these lines, CMS has announced its plans to remove MIPS process-based measures as well as topped-out measures. CMS has proposed eliminating three pathology-specific measures: The breast cancer and colorectal resection measures and the Barrett’s esophagus measure. CMS notes that the breast cancer and colorectal cancer measures are being proposed for elimination because they have become the “standard of care (99-percent compliance) [and have] a limited opportunity to improve clinical outcomes.”

Other notable proposed changes for Year 3 of MIPS are:


  • the addition of a third low-volume threshold criterion to determine whether individuals or groups are excluded from participating in MIPS,
  • an increase in the MIPS performance threshold from 15 points to 30 points,
  • a change in the weights of the quality and cost categories in the MIPS final score,
  • the ability to submit a combination of collection types for the quality category, and
  • the ability of facility-based clinicians to use their facility’s Value-Based Purchasing score in place of their MIPS quality and cost score.


ASCP reminds its readers that pathologists can use ASCP’s National Pathology Quality Registry, to relatively easily avoid penalties on future Medicare payments. MIPS scores in 2019 will result in payment adjustments of +/- 7% in 2021.


ASCP is continuing to review the Proposed Rule and will submit formal comments to CMS before the September 10 deadline. ASCP will provide recommendations for appropriately pricing pathology services, improving the reliability of the CLFS as a measure of market prices, and improving the QPP for pathologists and the patients who rely on their care.