COVID-19 Relief Bill Reverses PFS Payment Cuts, Provides More Funds for Testing

Publication Date: Jan 7, 2021

The recently enacted $900 billion COVID-19 relief and economic stimulus bill mitigates much of the sizable cuts for pathologists and clinical laboratories in the CY2021 Medicare Physician Fee Schedule (PFS). These cuts would have hit pathology with an estimated 8- percent cut in overall payments. Clinical laboratories would have seen their PFS payments reduced about 5 percent overall. In addition, the new law provides an additional $22 billion to assist states with testing, tracing and COVID mitigation programs. The measure also creates new restrictions on surprise billing and funds the federal government through the remainder of FY 2021. President Trump signed the bill into law on December 29.

The cuts in pathology payments are largely attributable to CMS’s efforts to increase payments and to change coding rules for evaluation and management (E/M) services. Per Medicare’s budget neutrality requirements, increases in payment services requires offsetting cuts elsewhere. (Click here for more information.) These offsetting cuts tends to fall hardest on those providers who generally do not provide E/M services, like pathologists, and were triggered by a 10-percent reduction in the Medicare conversion factor (used to calculate annual updates to payment rates).

While the new law does not totally wipe out the projected cuts to PFS payment rates for pathology, it significantly reduces them. It provides a 4-percent payment increase and defers a costly E/M coding change that was responsible to 3-percentage points of the 8-percent point reduction in payments attributable to the budget neutrality requirements. In addition, it takes several other actions that can potentially lessen payment rate reductions.

ASCP is relatively pleased with the new law’s impact on payment rates on to support COVID-19 testing. ASCP has urged Congress and CMS to take action to address these payment issues and to provide more public funding for COVID testing.

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ASCP ePolicy News is supported by an unrestricted grant from Hologic.

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