Urge Congress to Fix Medicare Fee Schedules

The Centers for Medicare and Medicaid Services (CMS) recently published its CY 2025 Medicare Physician Fee Schedule (PFS) Proposed Rule on the in the Federal Register. The bottom line: CMS is proposing to cut payment rates for physician services, including pathology services, by almost 3 percent. In addition, CMS is proposing cuts of up to 15 percent for hundreds of clinical laboratory services. These cuts coincide with CMS projecting a 3.6-percent increase in the Medicare Economic Index, a measure of medical practice cost inflation, for 2025. In the face of these fiscal challenges, ASCP is urging individuals to contact Congress and demand that they fix Medicare payment rates.

CMS proposes to cut the Medicare conversion factor, used to make annual adjustments to physician payment rates, by 2.8 percent. This cut is the result of the expiration of a 2.93-percent payment increase provided by Congress for 2024, coupled with the lack of a positive conversion factor update from Congress for 2025 and a mandatory -0.05 percent budget neutrality adjustment. This means that unless CMS makes specific policy changes increasing or decreasing payment rates for pathology services, the overall cut in payment rates for pathology practices and independent clinical laboratories is approximately 2.8 percent.

As it turns out, CMS did NOT propose policy changes that impact the overall calculus for pathology. In the PFS impact table, CMS outlined that the overall impact for pathology and independent laboratories is 0.0 percent. As is often the case, however, CMS will make changes in payment rates for specific services, so depending on the mix of services provided, pathologists and laboratories may find that the overall impact differs from these broad brushstrokes.

Interestingly, one of the factors that has helped pathology in recent years is the increases CMS made to the clinical labor rates for certain anatomic pathology services. Based on data from ASCP’s biennial Wage Survey, CMS increased the technical component rates to reflect increased labor costs for certain laboratory professionals—histotechnologists and cytotechnologists. For histotechnologists, CMS increased the per minute labor rate from $0.55 to $0.63, a 15-percent increase in the allowed labor rate. It also increased the clinical labor rate for services performed by cytotechnologists from $0.76 to $0.85, a 12-percent increase. These increases have helped protect pathology services from policy changes that could lower payment rates.

ASCP believes that the cuts CMS proposes are inappropriate and adversely impact patient care. Medicare’s PFS rates have been declining for years and Congress needs to address low PFS payment rates before more economic harm is imposed on pathology and other physician practices, clinical laboratories, and other entities that provide patient care. As a result, ASCP is working with the American Medical Association to lobby Congress to Fix Medicare Payment Rates. Below we will be asking you to participate in a grassroots advocacy campaign to urge Congress to fix this mess. ASCP is supporting H.R. 2474, the Strengthening Medicare for Patients and Providers Act, which would provide the PFS with regular reimbursement update tied to the MEI.

CMS Plans Cuts to CLFS
In addition to cutting pay for pathology services, CMS plans to impose cuts on the Clinical Laboratory Fee Schedule (CLFS). As part of the Protecting Access to Medicare Act, Congress tasked CMS with creating a new payment scheme for laboratory services. When CMS did so, it adopted a flawed approach, relying heavily on payment rate data from large reference laboratories. This resulted in CMS calling for massive cuts in payment rates. These payment rates were then quickly adopted by private insurers, causing a significant drop in revenues for clinical laboratories and forcing some laboratories out of the market. This negatively impacts patient access to care.

In response, ASCP and other organizations concerned about CLFS payment rates lobbied Congress to pause the new CMS payment system and fix it. While we have been successful in blocking CMS from imposing more cuts, Congress’s most recent moratorium on cutting laboratory payment rates only extends through the rest of 2024. Thus, CMS is proposing that hundreds of common laboratory services be cut by up to 15 percent next year.

ASCP has been stalwart supporter of the Saving Access to Laboratory Medicine Act, or SALSA, which is legislation intended to fix the flaws in the way CMS crafted the current CLFS payment rate system. ASCP is urging EVERYONE concerned about quality patient care and the future of pathology and laboratory medicine is encouraged to contact their legislators and urge them to support SALSA. This measure is needed not only to avoid draconian payment rate cuts for 2025, but also to help prevent these problems from happening on an annual basis.

Here's How You Can Help
ASCP has released a grassroots lobbying campaign so you can quickly urge Congress to fix Medicare payment rates. Please click on this link to use ASCP’s eAdvocacy Center to protect patient access to quality pathology and laboratory medicine services. Your actions should only take a few short minutes. Thank you.

To read more articles from this issue of ePolicy, click here. To learn more about ePolicy News and access past newsletters and articles, click here.