Uncover How the 2019 MPFS Could Be Negatively Affecting Your Path/Lab Bottom Line (and What You Can Do About It)

If you’ve noticed a small yet significant decrease in your pathology practice or clinical lab income for the first quarter of 2019, don’t be surprised. That’s because CMS estimates the 2019 Medicare Physician Fee Schedule (MPFS) changes will result in an overall two percent decrease in pay to pathologists and independent laboratories, despite an increase in the conversion factor (CF).

So, why are Medicare payments on laboratory-specific services going down in 2019? And which codes are most affected?

Why the Change?

On the surface, Medicare payments look like they should be increasing in 2019 based on a CF increase from 35.9996 in 2018 to 36.0391.

But CF increases can be deceptive. That’s because payments are based on a complex formula called the resource-based relative value scale (RBRVS), which uses relative value units (RVUs) for services. RVUs are based on the work, practice expense (PE), and malpractice insurance (MP) involved — the work component represents approximately 51 percent of the total RVUs for each service, while PE and MP represent approximately 45 and four percent respectively.

All these elements are then adjusted by geographic practice cost indices (GPCI) to reflect the cost of delivering a service based on specific geographic location. Then everything is multiplied by a conversion factor (CF) to produce a dollar value using the following formula:

Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU MP × GPCI MP)] × CF

2019 MPFS Creates 5 Big Path/Lab Winners …

Based on changes in the national non-facility payments (the RBRVS formula without the GPCI), five codes saw positive changes in excess of 15 percent:

… and 6 Big Losers

 Meanwhile, six codes offset those gains:

What Can You Do?

The news, fortunately, may not be all doom and gloom for providers of path/lab services across the country. Depending on the specific procedures and volumes you perform, you may not be negatively affected at all.

But if you are, you don’t have to feel helpless. While you may believe you have no control over procedure pricing, in reality there is much you can do to protect your bottom line. Here are three specific revenue-boosting suggestions you can implement right away:

1. Make sure you code correctly. Poor coding, not recording procedures, and even missing opportunities to provide vital services, can all help maintain, and even aid, your practice’s financial wellbeing.
2. Make sure you understand pricing and the way the RBRVS works, so that you are charging the correct price for procedures and getting paid properly.
3. Make sure you provide your input about the real cost of providing each CPT^® You can do this through any professional organizations you may belong to, or directly to CMS during the MPFS comment period.

Contributing editor: Ellen Garver

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