2014: TC to get cut up to 80%!!!!!!

[pathstudent]

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Saw this lovely bit of news on CAP. Not sure what it means, but I do know what we pay to do Dual ISH. If it gets cut 80%, I would be losing huge money on every HER-2 case we perform the test on. Everyone will be.
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CMS proposes to limit the practice expense payments used to calculate the technical component (TC) of pathology services to the lesser of the amount paid at either the hospital outpatient amount or ambulatory surgery center payment rate. This proposal results in steep reductions to all pathology TC payment amounts, as well as significant reduction to the global payment of nearly all pathology codes. The TC reductions range from 75-80% for in situ hybridization and flow cytometry TC payment to a 45 to 55% hit on special stain reimbursement. According to CMS, this proposed policy change accounts for a 6 percent reduction in overall Medicare PFS payment to pathologists and a corresponding 25% cut to Independent laboratory PFS payments (which represents less than 17% of Medicare payment to independent laboratories).

 

[2121115]

Saw this lovely bit of news on CAP. Not sure what it means, but I do know what we pay to do Dual ISH. If it gets cut 80%, I would be losing huge money on every HER-2 case we perform the test on. Everyone will be.
.
CMS proposes to limit the practice expense payments used to calculate the technical component (TC) of pathology services to the lesser of the amount paid at either the hospital outpatient amount or ambulatory surgery center payment rate. This proposal results in steep reductions to all pathology TC payment amounts, as well as significant reduction to the global payment of nearly all pathology codes. The TC reductions range from 75-80% for in situ hybridization and flow cytometry TC payment to a 45 to 55% hit on special stain reimbursement. According to CMS, this proposed policy change accounts for a 6 percent reduction in overall Medicare PFS payment to pathologists and a corresponding 25% cut to Independent laboratory PFS payments (which represents less than 17% of Medicare payment to independent laboratories).

Yeah, I mentioned that in the other thread. It is a pretty big cut, and will affect HER2's as well as flow and kappa/lambda's that the hemepath labs rely on. They are also cutting special stain TC. But the PC is going up 4%, and the 88305 global is going up 1%. This is part of the shift that we've been talking about.

 

[pathstudent]

Yeah, I mentioned that in the other thread. It is a pretty big cut, and will affect HER2's as well as flow and kappa/lambda's that the hemepath labs rely on. .

The TC on 88367 and 88368 is in the ballpark of 200. You cut that 80% and you are down to 40.

The TC reimbursement for a her-2 test will then be $80. I don't know what it costs to do it by FISH but to do it by CISH is a lot more than that.

 

[Thrombus]

The blood bath continues. Our leadership is simultaneously creating ways to make the practice of pathology more expensive instead of fighting for us.

We will be forced to make up ridiculously compressed and sometimes negative margins with volume.

Good luck getting a job. I would rather work my way up in McDonalds starting in high school than start down this road.

 

[DrBloodmoney]

Some interesting commentary on pathologyblawg.

Update: I’ve just been informed by a very reputable source that independent labs should experience (depending on payor and testing mix) about a 26% reduction in reimbursement for clinical testing, and that reimbursement for some individual tests will be cut 50-70% if the proposed rule goes into effect as it is now.

Here are a few examples of codes and their proposed reductions:

88307-70% reduction of TC for global reduction of 50%

88309-46% reduction of TC for global reduction of 30%

88342-45% reduction of TC for global reduction of 27%

More later.

 

[2121115]

One step closer to ending labs that do nothing but profit from an over valued TC. This should do away with the in office labs and it will really hurt the corporations (Miraca, etc) that profit from the TC. There will be some nicks for those billing global, but that is becoming increasingly rare these days, particularly in large cities.

 

[pathstudent]

One step closer to ending labs that do nothing but profit from an over valued TC. This should do away with the in office labs and it will really hurt the corporations (Miraca, etc) that profit from the TC. There will be some nicks for those billing global, but that is becoming increasingly rare these days, particularly in large cities.

We bill global on all our outpatient business and we are in a major city. We do about 10 outpatient lumpectomies a week. There can be 60 blocks or more in a lumpectomy, taking 90 minutes to gross and read out if the margins are all confusing and the findings are complex. Cutting the global on this 50% is nothing to celebrate. There is nothing good about this.

Seriously why do you think it is rare to bill global? Who is not billing global? Of course we don't bill it on inpatient specimens as the hospital gets that. But on outpatient someone has to bill it. 65% of our revenue is on outpatient. We couldn't make a decent living off the stuff out of the hospital ORs.

It is dismaying to know that you will never do better than you are right now. I guess many businesses have good years that end up being their best, but I think we can say without a doubt that we will never be better off than we are now.

 

[mario2010]

I don't think that big labs will be hit that hard. The global for 88305 is up 1%. 88305-TC is down 3 % while PC is up 4 %. So overall there is net gain. TC for special stains on the other hand is down.

 

[AZpath]

One step closer to ending labs that do nothing but profit from an over valued TC. This should do away with the in office labs and it will really hurt the corporations (Miraca, etc) that profit from the TC. There will be some nicks for those billing global, but that is becoming increasingly rare these days, particularly in large cities.

Yes, nothing to celebrate at all.

I don't like the abuses that are occurring in the commercial and office labs. However, this hurts pathologists everywhere. The corporate boys will fire more pathologists and cut salaries/bonus. Volume per employed pathologists will increase just break even. Meanwhile, the in office labs will be able force bigger payment cuts to pathologists. They will have no problem doing this since their will be more pathologists out there looking for work than ever.

Private groups with small labs will be gone. Only the high volume players survive. The disruption to the profession even effects PC only groups. You hospital will soon know there is 50 other groups that are happy to replace you if get any part A.

Don't pop the cork on the champagne.

 

[AZpath]

I don't think that big labs will be hit that hard. The global for 88305 is up 1%. 88305-TC is down 3 % while PC is up 4 %. So overall there is net gain. TC for special stains on the other hand is down.

If you do a few standard IHCs like for HP on gastric biopsies you would be surprised on how much revenue this accounts for.

 

[2121115]

Seriously why do you think it is rare to bill global? Who is not billing global? Of course we don't bill it on inpatient specimens as the hospital gets that. But on outpatient someone has to bill it. 65% of our revenue is on outpatient. We couldn't make a decent living off the stuff out of the hospital ORs.

According to CAP data, almost half of practices bill PC-only. On outpatient cases, someone does bill it - the clinician offices doing client billing (which is essentially all of them). TC for pathologists has flat out disappeared in our area. I feel for you man. If 65% of your revenue is from outpatient TC, the next few years are going to be rough. What major city do you live in that all of the pathology groups own the labs and the outpatient specimens flow like wine with no clinician profit? Sounds like the land of milk and honey. Try to make sure none of your clinicians go to their specialty's national meetings and learn that it is pretty easy to just send the biopsies elsewhere and make mad $$.

 

[WEBB PINKERTON]

According to CAP data, almost half of practices bill PC-only. On outpatient cases, someone does bill it - the clinician offices doing client billing (which is essentially all of them). TC for pathologists has flat out disappeared in our area. I feel for you man. If 65% of your revenue is from outpatient TC, the next few years are going to be rough. What major city do you live in that all of the pathology groups own the labs and the outpatient specimens flow like wine with no clinician profit? Sounds like the land of milk and honey. Try to make sure none of your clinicians go to their specialty's national meetings and learn that it is pretty easy to just send the biopsies elsewhere and make mad $$.

I dont know of any pathologists in my area getting the TC.

There are no lands of milk and honey in the United States for pathologists. If someone is saying things are great, they are likely lying or have learned helplessness. Best thing to do is plan your escape. The future is getting bleaker unfortunantly and CAP is useless.

 

[AZpath]

I am afraid it is sour milk and rotten honey.

I have done a cost analysis on our lab. The we will loss money if this becomes the law of the land. Our largest hospital will have to run pathology and absorb any loss. Even if we cut lab staff to the bone we will likely not break even. No sense for our group to subsidize the lab with pc revenue.

 

[pathstudent]

According to CAP data, almost half of practices bill PC-only. On outpatient cases, someone does bill it - the clinician offices doing client billing (which is essentially all of them). TC for pathologists has flat out disappeared in our area. I feel for you man. If 65% of your revenue is from outpatient TC, the next few years are going to be rough. What major city do you live in that all of the pathology groups own the labs and the outpatient specimens flow like wine with no clinician profit? Sounds like the land of milk and honey. Try to make sure none of your clinicians go to their specialty's national meetings and learn that it is pretty easy to just send the biopsies elsewhere and make mad $$.

Our outpatient business is predominantly from outpatient surgery centers for which we have an exclusive contract. We recieve a handful of specimens from our colleague's offices. We bill global on everything (except of course inpatients).

 

[Path or bust]

I am afraid it is sour milk and rotten honey.

I have done a cost analysis on our lab. The we will loss money if this becomes the law of the land. Our largest hospital will have to run pathology and absorb any loss. Even if we cut lab staff to the bone we will likely not break even. No sense for our group to subsidize the lab with pc revenue.

I don't believe these cuts would affect inpatient billing, just outpatient.

 

[pathstudent]

I don't believe these cuts would affect inpatient billing, just outpatient.

Good to know my for profit hospital that makes hundreds of millions of year won't be taking hit.

I still don't understand this line "CMS proposes to limit the practice expense payments used to calculate the technical component (TC) of pathology services to the lesser of the amount paid at either the hospital outpatient amount or ambulatory surgery center payment rate."

I am hoping that there is some sort of modified to indicated an "in office lab" and that only those will be effected as that is clearly who is driving these cuts.

 

[AZpath]

Good to know my for profit hospital that makes hundreds of millions of year won't be taking hit.

I still don't understand this line "CMS proposes to limit the practice expense payments used to calculate the technical component (TC) of pathology services to the lesser of the amount paid at either the hospital outpatient amount or ambulatory surgery center payment rate."

I am hoping that there is some sort of modified to indicated an "in office lab" and that only those will be effected as that is clearly who is driving these cuts.

Not likely. They will be effected just like anyone doing business on the fee schedule.
It will stop new ones from forming. Some may close. The established ones may try to recoup their losses by cutting the pathologist fees more.

Just my guess. The only way to really end that abuse is to change the ancillary exception rules.

 

[LADoc00]

I hate being so right...we are undone.

You must be on stage when the curtain falls.
~Albert Speer, 1945

 

[pathstudent]

And for those of you who think, "this has no effect on me as I'm in academics or im in kaiser or I'm in a group that just bills PC", you are wrong. Just because you are detached from the business side of medicine/pathology, don't think you are not insulated from these cuts. Academic departments make loads of cash billing TC on outreach business. Slashing it slashes revenue for your department. That means less salary, less bonus, less money to hire, etc...

 

[Substance]

All of this is due to your oversupply problem. But what else do you expect when your professional organization's president is an MBA and the labcorps run its board? They're mass-producing your ilk to make you cheap. Pathologists are an assembly-line product, much like cars, or microwave ovens.

You are commodities, not professionals. I hope you enjoy your complimentary pizza slices on employee appreciation day. But you're only allowed one slice. Just one.

 

[Johnny Sunshine]

Oh, my academic hospital/center is seeing plenty of problems from this. Surrounding small labs were already closing due to the most recent TC cuts, and we're absorbing their work...but without any new staff, of course.

Just a year ago or so, the hospital gave my department a stern finger-wagging, saying that we were "in the red". I can only imagine what our ledger must look like now. It's getting to the point where attendings are anxious to sign out cases with multiple IHC, fearing if they do too few they'll blow a diagnosis, but if they do too many they'll come under fire from administration. We're also scaling back our molecular lab dramatically, and have recently let go almost half of our administrative and support staff.

This was before these most recent announcements about 2014's plans. I can't wait to see what new lunacy gets unleashed in response.

But don't worry...we'll be getting two more scut monkeys than usual next year! Who needs PAs, lab techs, and secretaries when you can just get more free residents? 🙄