Fee Schedule Changes in 2022 for Pathology

Pathology Fee Schedule

CMS issued the CY 2022 Medicare Physician Fee Schedule (PFS) final rule that updates payment policies, payment rates, and other provisions for services, effective January 1, 2022.  The CY 2021 Medicare Physician Fee Schedule Final Rule was published on the Federal Register on December 2, 2020. On December 27, the Consolidated Appropriations Act, 2021 modified the Calendar Year (CY) 2021 Medicare Physician Fee Schedule (MPFS) to adjust for the following:

  • Provided a 3.75% increase in MPFS payments for CY 2021
  • Suspended the 2% payment adjustment (sequestration) through March 31, 2021
  • Reinstated the 1.0 floor on the work Geographic Practice Cost Index through CY 2023
  • Delayed implementation of the inherent complexity add-on code for evaluation and management services (G2211) until CY 2024

CMS has recalculated the MPFS payment rates and conversion factor to reflect these changes. The revised MPFS conversion factor for CY 2021 is 34.8931. The revised payment rates are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched.

The chart below shows only the professional component (PC) fees for pathology for the current year and previous two years. The original fee schedule that was released in July 2021, had a 4.3% cut for pathology PC, but that was changed to a 1% decrease in the final fee schedule released in Dec. 2021. When compared to the 2020 fee schedule, rates have dropped over 5%, especially for the most common CPT codes which are highlighted in the chart.

2022 Fee Schedule Change

However, don’t assume that pathology revenue will only be affected by the fee schedule reduction. Here are some other threats to income for pathologists in 2022.

  • Sequestration cuts of 2% will return on April 1, 2022
  • MIPS bonuses are becoming more difficult to obtain and the focus is shifting toward penalty avoidance rather than income enhancement. Many physicians are finding it harder and harder to dedicate resources to achieving perfect scores in light of the reduced incentives for doing so, but on the other hand, do not want to pay the severe penalties for not participating.
  • Patient responsibility for co-pays and deductibles continue to rise each year and reduce the gross collection rate for billed charges.
  • Surprise Billing Act will force in-network payments and adjustments to be accepted by hospital-based physicians.
  • Commercial Payors are aggressively renegotiating contracts to tie them to Medicare fee schedules, which have historically been reduced each year for pathologists for at least the past 10 years.
  • The professional component of clinical pathology is being increasingly cut out by most major commercial and governmental payors, and look for more payors to drop out in 2022.
  • The lingering effects of COVID19 on in-patient volumes, scheduled surgeries, and hospital management of future outbreaks, vaccine mandates, and labor shortages.

Written by Andy Harner, Vice President of Client Services
Andy oversees Medusind’s Virginia-based service delivery for pathology organizations.

His team, like all of Medusind, delivers outstanding practice performance, streamlines the collection and reporting of quality data, and helps pathology organizations achieve their business goals, big or small.

Get a quote or learn more about Medusind’s Pathology Billing and Practice Management solutions.

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