New Analysis Finds Contradictions and Flaws in CMS Rationale for Cutting Anatomic Pathology Services for Medicare Beneficiaries

Today the American Clinical Laboratory Association (ACLA) released a report prepared by The Moran Company, a research firm with expertise in Medicare, that found serious contradictions and flaws in a recent proposal from CMS to drastically cut Medicare reimbursement for anatomic pathology services. On July 8, CMS issued a rule proposing to cut some anatomic pathology (AP) services by as much as 75%. The Moran Company report analyzed CMS data and surveyed clinical laboratory companies about direct and indirect costs.  It found that CMS’ proposal to use OPPS data would not result in accurate payments for anatomic pathology services due to imperfect, incomplete claims data, substantial overlap in the cost findings between care settings, and cost data from hospitals that do not capture the differences in the way hospitals allocate costs as compared to other care settings.  It also concluded that the data were insufficiently granular to be reliable at the level of individual codes for anatomic pathology services. Further, the analysis points out that for years CMS has described the procurement of OPPS data as an “imperfect” system, in which relative weights and payments are based on often flawed hospital reports and claims data. The current position taken by CMS directly contradicts repeated assertions in prior comments published by the agency.