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By Joseph W. Plandowski
11/15/07
The verdict is in: Professional anatomic pathology fees in 2008 are being reduced-this time by about 15%, including the highest volume anatomic pathology test (CPT 88305)-unless Congress once again steps in and halts the cut as it has for the past few years. The new fees can be found in CMS's Nov. 1, 2007, release of its "Revisions to Payment Policies Under the Physician Fee Schedule." How much lower can the fees go for pathologists? Where is the bottom to this downward spiral?
The chart below is interesting. It shows professional fees continuing their painfully slow but steady drop over the last 10 years. Meanwhile, associated technical fees have been on a continuous and steady march upward during much of the same time period, although the slowing of technical fee growth is now evident.
A simplistic way to look at this is to consider the amount of your compensation 10 years ago and compare it to your compensation today. Few of us have experienced a cut of one-third in absolute dollars over that time period. On a comparable basis, if 10 years ago you earned $60,000, you are now earning $40,000 and that doesn't consider the effects of inflation, albeit small, over the period.
Pathologists have adapted to the cuts by employing automation, computerization, and pathology assistants. Without these, the volume of testing work would overwhelm the current number of pathologists. There has also been a noticeable shift in pathologists' focus from clinical pathology to anatomic pathology, where, on a relative basis, there is money to be made. It is safe to say that pathologists are working harder than they ever have before to counterbalance fee reductions. However, there is only so far this can carry the profession.
The winners and losers in this picture can be generally defined. Winners are pathologists with their own independent laboratory who have an opportunity to bill global fees, both technical and professional. Losers are hospital-based pathologists who can only bill professional fees. And, as surmised, in the middle are hospital-based pathologists lucky enough to be at a hospital with a very active outreach program.
Why the dramatic flip between professional and technical pricing? Looking back at how the Medicare fee schedule was set provides a clue. In simple terms, Medicare initially used a charged-based method to determine its fees, including anatomic pathology fees. Heavy pathologist lobbying was employed to guide that initial split. The result was a fat professional fee for the work of a pathologist versus an ultra-thin technical fee for the work done by low-paid technicians. Looking at it from a practical side, if the pie was only going to be just so large, the goal was to get the largest piece. And, so, the pathologists did get the big piece.
As time passed, commercial laboratories as well as CMS recognized that the split was grossly unfair. Over the years a more rational split began developing. However, instead of the pendulum slowing down, it continued moving far beyond what might have been expected in favor of the technical side to the point of becoming very unfavorable toward pathologists who only bill a professional fee. As seen in the chart, the technical fee tripled over 10 years as the professional fee tumbled by a third.
Without a revolution in pathology, the current trend will continue down the current path and pathologists will be further marginalized. Pathologists are generally viewed as the technocrats, technicians hidden away in the laboratory and turning out test results. Time and time again, pathologists have been prompted at conferences by the enlightened in the profession to spend time out of their offices and away from their microscopes to interact with clinicians. However, in fairness to pathologists, with reimbursement falling year after year, they need to "push lots of glass" to earn a living.
Pathology leadership needs to take a hard look at the trend and develop strategies to improve their members' stature within medicine. Lots of self-flogging takes place, but very little gets accomplished. The message from pathologists is not united or well coordinated. This may be attributable to the various factions having different interests within pathology. The relatively small number of pathologists divided over many related but diverse interests may be a clue. There are about 13,000 active pathologists.
For example, look at the number of pathology organizations that divide up the pathology profession. Consider these: the College of American Pathologists, the American Pathology Foundation, the American Society for Clinical Pathology, the American Society for Investigative Pathology, the Association for Molecular Pathology, the Association for Pathology Informatics, and the Society for Toxicologic Pathologists. Getting these disparate pathologists on the same page is a Herculean challenge. And, consider that about 1,000 pathologists are employed by the two largest commercial laboratories in the country, Quest Diagnostics and LabCorp, with many others employed by specialty pathology laboratories such as CBL Path, GI Partners, and so on.
A further division takes place between the haves and have-nots in the profession. The haves are those with their own independent pathology laboratory. They are weathering the storm because they bill global fees. The have-nots are hospital-based pathologists without an active hospital outreach program. These physicians have been hit hard by fee cuts and, importantly, by specimens escaping the hospital for freestanding surgery centers, endoscopy centers, etc.
Once specimens are outside the walls of the hospital, the hospital-based pathologists have little means to snag them back into the hospital laboratory. To do so requires a sales representative, a courier system, an in-office data entry and results reporting system, a responsive non-hospital billing system, rapid turnaround times, and the latest technology in testing that is generally too low in volume to set up in-house for a non-reference laboratory, among others.
Will the profession survive? Besides professional fee cuts, hospital-based pathologists face the never ending battle to retain their Part A fees. In addition, their efforts at billing clinical testing professional fees are challenged at every turn. Over the past two years, many speakers at national meetings have planted the notion that the time may have arrived for radiology and pathology to possibly unite into one organization. These may be the sages of the future and this may be a way out of the bind. Pathologists will be helped or pushed along this path by industrial behemoths, such as Siemens and General Electric, who are putting together businesses to capitalize on the convergence of pathology and radiology.
With molecular pathology also lurking in the background mix, expect to see some major changes in the pathology profession in the relatively near term. It's long overdue.
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