Pathology Medicare Revenue Projections for 2016

December 9, 2015

  • Financial Impact Analyses are underway for Vachette clients
  • In aggregate, we are seeing a 1% increase across the board for 2016 revenue

We are at the year’s end again, and it is time to do our projections for 2016.  At Vachette, we take this very seriously. We look at each of our 94 clients and try to determine how the new CMS Physician Fee Schedule (PFS) will affect their income.

It is interesting this year, because there was a CMS fee schedule change in July. This was part of the Standard Growth Rate changes which determined that all providers would get a .05% increase.   This was added to the Sample Impact Analysis below, and we see that almost across the board there is a .05% increase.

A new fee schedule came out this fall for 2016, again with some changes.  For example, 88305-26 (surgical pathology, gross and microscopic examination) will go up 1.5% while 88311 (decalcification procedure) goes up 1.6%.

There are also some interesting losses: 86334-26 (immunofixation electrophoresis; serum) goes down 1.9% and 76098-26 (radiological examination, surgical specimen) goes down 0.3%. These changes are as interesting and as confusing as our federal government.

The sample analysis below was developed by looking at practices’ CPT volume by CPT code, then multiplying this versus the July 2015 PFS and the November PFS, noting the changes.  To perform this audit accurately, you must have a charge volume by CPT, preferably by date-of-service. We also included the practices’ geographic location as CMS pays differently for each area in a given state.

This table only shows our clients’ Medicare rate changes. We know their managed care plans should be following these changes as well.  Therefore, a revenue projection must also be performed on these carriers.

This process of actually predicting our practices’ incomes allows them to make decisions that help them run their practices like businesses, being proactive instead of reactive.

The next step in this whole process is to audit some payments from January 2016 dates of service to ensure both CMS and the private insurance plans have made the payment changes they were supposed to make.

This is an ongoing process, and this is why we audit our practices at least three times per year. A good 75-step detailed revenue audit helps keeps our clients on line.

Summary of 2016 Changes to Pathology Practice Revenue
Overall the CMS changes for 2016 are nominal for most practices; our example below shows a slight increase in aggregate of about +1% – not bad.  You should know how your business is going to change in 2016.  With all the payer rules and system consolidation, it is imperative that you stay on top of your payments and how they will play out.  Failing to be attentive can lead to the demise of your practice.  If you are not seeing a 1% increase across the board by March 2016, perhaps you should look into it and start auditing.



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