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Industry Insights

Cuts for Labs, Pathology again proposed for 2024 Medicare Fee Schedule

The 2024 Medicare Physician Fee Schedule Proposed Rule released July 13 is already generating pushback from lab and pathology advocates, such at the College of American Pathologists (CAP), who contend these services and the physicians who provide them cannot sustain further rate reductions.

In summary, the proposed rule includes overall payment reductions of -2% for pathology and -1% for independent labs. Additionally, the proposed 2024 conversion factor (CF) used to calculate payments is $32.75, a roughly 3.4% decrease from the 2023 CF.

Most services/codes will see reductions. For example, both 88305 (tissue exam by pathologist) and G0416 (prostate biopsy, any method) are set for -2% cuts, dropping their proposed payment amounts to $70.41 and $168.32, respectively.


What’s driving proposed reductions in the 2024 MPFS?

These reductions, according to analysis from CAP and others, are largely being driven by budget neutrality requirements spurred by the introduction of a new add-on code for evaluation and management (E/M). According to CAP’s July 13 Special Advocacy Update:

“The CMS proposed to implement a new evaluation and management (E/M) add-on code, G2211, for ongoing, longitudinal patient care. This is an add-on code that physicians may list separately in addition to office/outpatient visits for new or established patients (ie, codes 99202-99215). This code may be added even when the E/M visit is done via telehealth because the CMS has permanently added the code to the Medicare telehealth list.

The CMS is not restricting the code’s use to certain specialties but assumes some physicians will utilize the services more than others. In fact, once fully adopted the CMS assumes physicians who rely mainly on office/outpatient E/M visits will report G2211 with 54% of those visits. Primary care specialties will have a higher utilization of the add-on code than other specialties. This increased spending for primary care results in across-the-board cuts to all physician payments. Specialties that do not utilize the new code see larger cuts as a result of its implementation.”

Public comments on these proposed changes will be accepted for 60 days. In the meantime, don’t hesitate to reach out to us if you’re seeking to analyze the impact of these reductions on your lab or practice.


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