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Understanding the 2018 Reimbursement Changes in the U.S. and What They Mean to your AP Laboratory

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The United States health care system is in the fifth year of reimbursement changes. We will explore the effects of these changes on the AP market and in your laboratory. At the end of this presentation, you will have a better understanding of why these changes have occurred. Lastly, we will look at solutions to help you through these market changes.

Learning Objectives:

  1. Describe how US AP laboratories are paid
  2. Review how reimbursement has changed over the past five years
  3. Explain what to expect for 2018
  4. Discuss solutions to help your lab meet these challenges

Loretta Sayles has spent the past 30 plus years working in the anatomic pathology laboratory arena in several different aspects of our business. She is currently the Managing Director of Sayles Lab Consulting which focuses on helping labs improve their quality while understanding the challenging healthcare market. Loretta is very active in histotechnology on both the national and state level and has been recognized for her dedication to the field.

Webinar Transcription

Loretta Sayles, Sayles Lab Consulting:

The learning objectives today are: Describe how the USAP labs are paid, review how reimbursement has changed over the past five years, and explain what to expect for 2018, and then we’re going to discuss solutions to help your lab meet these challenges.

Medicare patients

So, historically there’s two kinds of patients that we see: they’re the Medicare patients or they’re non-Medicare. And the Medicare patients are paid from the physician fee schedule, and that includes all the pathology codes 88104-88399. And it’s based on three things: it’s based on what we call the TC component, which is the technical component, the PC component, which is your professional component, and thirdly in the one that not everyone’s aware of, is it depends on the geographic area. The TC component is the technical time and the cost of those producing the slide that the pathologist is going to interpret. The professional component is for the pathologist’s time to make that diagnosis from that slide. And the third thing is based on cost of living; obviously it’s a lot more expensive to have a lab in New York or California than it is in Florida, where I live. And so, because of that, there are, Medicare has set up multiple regions around the country. They actually have over 50 regions now. Depending on what region you fall into would be that geographic area based on cost of living would determine what your part of what you would be paid for the CPT codes on the physician fee schedule. And when you get the fee schedule, it always comes out late in the fall so that it could be implemented in January. It always says it’s the “average” fee because they can’t set a dollar amount because of the geographic area. So, when you look at the fee schedule, you need to realize that depending on where you’re located in the country, would be, it could be a little bit less than that average, or it could be a little bit more. It’s just an “average” so you just need to be aware of that.

Non-Medicare patients

If our specimens that we get are not from Medicare patients, then we just refer to them as non-Medicare work. Non-Medicare work is self-pay, which is really very little, most of it is going to be insurance, and it utilizes the same CPT coding that is utilized from the physician fee schedule and it’s based on an individual contract that is made between the laboratory and the insurance companies. And a lot of these contracts have been in place for many years, and a lot of them are simply as simple as they say they will pay the Medicare rate or they’ll say, “We’ll pay 80% of the Medicare rate.” That was very popular for many years. A little bit later in the presentation we’re going to talk about why these contracts, when they were set up, were attractive. Now they’re not so attractive or very good for laboratories right now. And the third ones are Medicare Replacement Plans. We’re seeing more Medicare Replacement plans. They’re actually run by the insurance companies, so the insurance, they usually call it the “insurance company rules,” but some of them follow Medicare rules. You have to be very careful if you’re involved in coding or billing for Medicare Replacement plans to make sure you know which rules that particular plan follows. The way they determine the dollar amount for the CPT codes is the American Medical Association has a committee of physicians that work with CMS, which is the centers for Medicare and Medicaid services, and they determine what the dollar amount is for each of the CPT codes together. So that’s how we have been paid traditionally for many decades.

Need for Reform

Why did we need to reform our Healthcare System? Well, our spending was unsustainable. I mean our cost grew over 400% between 1990 and 2012. And in 2015, we spent, Medicare spent 8.8 billion dollars just on laboratory services; now that’s clinical and pathology together. But that’s still one big number for one year. In 2012, the US had the highest cost of healthcare of any industrialized nation without significantly improved outcomes per capita. What that means is that our healthcare, for each person in the United States, we pay more than any industrialized country, and yet we’re not ranked as having the highest quality of healthcare. Because it is based on expectancy. And in 2012 we were ranked fifth in the world. And in 2013, we were ranked seventh in the world. Hopefully we’re going in the other direction. I haven’t seen the numbers for 2016 and 2017 yet, but hopefully we’re moving in the right direction now.

But those two things were a big part of why the Affordable Care Act came into being, and when it came, it was passed in 2012 and it brought rapid change especially to us in pathology. Some of the things that besides the aggressive reductions in Medicare reimbursements which we’ve all been aware of. The other parts of it which are just now coming to the forefront and things that we’re going to be working on in the next few years, are focusing change to value and outcomes. And they want to give incentives and penalties for performance. It’s not going to be a matter of you just do the test and you get paid the same as everyone else. If you don’t provide a good value and you don’t provide a quality result for that patient, then you’re not going to get the same reimbursement as someone that does.

They’re moving towards the value based payments versus the fee for service that we have always had. It’s a difficult concept for us to get our heads around, but going forward we need to think more on being “let’s demonstrate quality and value.”

For pathology in 2013, the first year of the Affordable Care Act, we got hit really hard with our 88305, our biopsy CPT code. We had a 33% decrease in the global reimbursement, which is the technical component and the professional component combined together, and if they’re built together that’s called “global.” However, the biggest hit was 52% decrease in the technical component and a 2% increase in the professional component. Overall for the 88305, it was a 33% decrease. The reason they chose the 88305, people asked me this many times, I think there’s two thoughts on this, I think it’s a little bit of both, they feel that the 88305 was being over utilized. CMS has published that every year since 2012 that they felt biopsies were being over utilized. If you took the number of every other CPT code that we do in pathology and added the total numbers together, it would not equal half of what we get volume wise in biopsies. Because they felt it was over utilized and they can’t tell physicians they can’t order them, so the answer was to them to cut the reimbursement; and they cut the technical component basically in half for reimbursement. The other thought is that by cutting that one CPT code, they were able to save 700 million dollars in Medicare reimbursement in one year on one CPT code. It was like low-hanging fruit, instead of taking the time to go through and research each CPT code and take a little bit from each one of them, it was easier just to take that big one cut it in half and they saved 700 million dollars in one year.

This led to a 5 to 6% decrease in all AT reimbursement for 2013. We were just recovering from that when they came out in 2014 and they had told us that they were going to be looking at IHC. They always tell you a year ahead but what to plan for. The problem we had in 2014 was they came out with two sets of guidelines, and it was very complicated and the reason was that the American Medical Association committee could not agree with the CMS people on how to build IHC. CMS wanted it to be billed per specimen and the American Medical Association wanted to continue to bill it by block. Because they could not agree, they came out with two guidelines and CMS made their own G codes for billing IHC on Medicare patients, and they could only be billed per specimen; and if it was an insurance case, then it could be billed per block. This came out in the fall of 2013 and had to be implemented within a few months beginning in 2014, and this was a nightmare for labs because most middle to large labs use their laboratory information system to do this coding automatically. Now they had to be all completely re-programed so that they could determine if the patient was Medicare gets one type of code it gets a G code per specimen and if it was an insurance patient then it gets the CPT code and it’s billed by per block. It led to a lot of confusion and it wasn’t until about the middle of 2014 before labs were even able to determine how this affected their reimbursement. But by June of 2014, most of the large labs were saying, “it was an estimated 25 to 30% cut,” in IHC reimbursement because of this split in the guidelines.

In 2015, they reached an agreement on IHC and they implemented two new CPT codes: one was the 88341 and its value is 40% of the dollar value of the 88342. And then they implemented the 88344 for multiplex testing. For the original and its per specimen, they both agreed to go with specimen, so 88342 would be billed for the first IHC on a specimen, any additional IHC’s on that specimen on other blocks on the same specimen, would get an 88341. At least we were back to “playing on the same field,” and it made it easier to code and bill these specimens.

In 2016 we had a really good year because we had an 8% overall increase in oncology billing and reimbursement. And that was mainly caused from they took the 88341, which had been 40% of the value of 88342 and they raised it to 70%, and that’s where it is today. Now we all know that if we do an IHC on block A and then we do an IHC block B of the same specimen, the cost is basically the same, you do exactly the same thing to the separate blocks, but at least they’ve made it 70% of the value and that gave us a nice increase in reimbursement.

For 2017 they did go back to the 88305 much to everyone’s dismay, and they took another 17% cut out of the 88305 our biopsy code. This was on top of the 52% taken in 2013. They also cut the 19% from the 88307 and 88309, which are the more complex cases. And they cut 19% from all flows CPT codes and 19% cut on the technical component of the Prostate, which again, there’s a G code for Prostate because Medicare wants to have one code for the whole case not per specimen. Most prostates I deal with is 12 to 14 specimens in one case; that would be no matter how many specimens, it gets a G0416 if the patient is Medicare. If the patient is insurance, you still bill under the CPT code, and it would be 88305 times the number of specimens either 12 or 14.

They did increase the pathologist’s component though on all these areas that they cut the increase with the exception of flow, but the pathology ones were all increased on the professional side, so it wasn’t a large decrease if you look at the billing from the globally. Some labs bill the professional and technical components together, and some labs “split bill” as we say, because the pathologist do their own billing for the professional component; and the lab does the technical component billing. In those cases you certainly felt the cuts more if you were doing “split billing.”

They did raise the 88361 Computer Assisted Tumor IHC by 7% and they also increased outside consults.


For 2018, you’ll be very happy to hear that the vast majority of reimbursement levels are going to remain relatively unchanged. The hit biggest and only hit really for pathology, for this coming year is going to be once again prostate. This is an 18.7% cut on the technical component following last year’s 19% cut. The G416 technical component only, Medicare average reimbursement is $247.61 no matter how many specimens. If you have 14 biopsies you’re looking at about $17.00 a specimen in reimbursement. And that’s getting real low, that’s getting close to some of the clients that I work with, it’s getting close to their costs if they’re a small laboratory the costs are usually higher than they are in a large high volume laboratory.

The global cut will be 11%, so it will be $434.40 if you bill globally. The professional component will rate increase only y .3% and it will be $186.26. You need to look and see what you are getting reimbursed in your region for prostates depending on what area of the country you live in for your Medicare patients, and also you’ll be able to see if you know your cost per test, actually how much you will be making on each one of those specimens. And hopefully you do know your cost per test; I talk about it every time I talk. And plus psychometry took another cut of 18% on the technical component at 4.4% on the professional. But other than that, the fee schedule stays pretty much the same, and I think really for pathology they have massaged their pricing over the last six years. We got their big hit the first year and I think that the worst is over for us. I think that prostate and psychometry both suffer from the same problem, and that is that it’s a lot of CPT codes being billed on one case on one day of service, and so that’s why I think CMS has a problem with that; they’re wanting to bundle them and to reduce the reimbursement on those.

Over the last few years Medicare has given each of those regions that I told you about, a lot of individual power and flexibility to set their own rules. You not only need to know what region that you live in and what region you’re being reimbursed from, but if you go on the CMS website you can find out not only what region you’re in, based to where you live, but if you search, they have a search box, and if you search under L-C-D, stands for Local Coverage Determination, and these are all the local rules that have been made by the local regions and you can look through those and find any of them that would apply to you. Because they have been given a lot of flexibility and certainly we see in our region down here in Florida, but we have two regions; North Florida has one and South Central Florida has a second one. And there are some rules that definitely affect pathology and what they will pay and what they will not pay. And you don’t really know, they’re not going to send you a letter and say, “we refuse to pay that.” They just won’t pay it. It’s good to know up front what some of these rules are. I encourage you to check them out on the website and make sure that you understand what they’re saying and how these rules will apply to you and your specific laboratory.


I’m going to talk now about two of Acts of Congress that were passed in 2015, which are really just be coming into play this year. The first one is called PAMA, its protecting access to Medicare act of 2015. And what Congress wanted to do was to make sure that Medicare was not paying the highest rate in the Marketplace. They told CMS to, which again is the Centers for Medicare and Medicaid Services, to make sure that Medicare rates were not higher than what the insurance companies were paying. CMS required all laboratories to send in detailed information on payments from all payers. They actually started this, they wanted it by May of 2016; giving labs only six months to pull this detailed. And labs realized very quickly that they didn’t have the ability to pull from their billing systems the details that CMS wants to have. The problem is that when laboratories bill, and we bill 10 or 12 CPT codes for patient on the day of service, we get a lump sum payment. Your lab will get a lump sum payment from Medicare, but it’s not broken down by CPT code. You don’t really know how to apply it to each specific CPT code. CMS gave them an extra year to gather this detailed together, it didn’t apply to every lab. If it applied to only labs that bill under their own MPI number, and most hospital labs do not bill under their own MPI number, and hospital labs get a higher reimbursement than independent labs. Laboratories were very unhappy that hospitals weren’t included in the detail and they had a hard time even getting this material to them by 2017, May 31st. But what CMS is targeting a 1% reduction in all Medicare payments. This data that they collected over the last six months of 2017 is for the first six months of 2017, was used to set the clinical fee schedule and the physician schedule for 2018. I think the rates had been adjusted so there wasn’t any problem and we didn’t suffer any big cuts. But the clinical fee schedule had not been adjusted or cut before. Because PAMA demands that Medicare pays no more than the median of all payers, that’s not the average. Labs were very upset and have been fighting to not have this go into effect in January because hospital labs were excluded from submitting data and 90% of the data came from independent laboratories. The Center for Medicare and Medicaid Services had estimated and told everyone this past summer that they were planning to cut 390 million the first year for the clinical lab tests. But when they released the fee schedule in September, they actually are having a deduction of 670 million dollars in the first year for the clinical fee schedule. Now 10% of the current seven billion dollars is paid annually for lab tests versus 6% the market was expecting. The markets, the labs, the American Clinical Laboratory Association is fighting this rule with Congress and with CMS and they’re still continuing to fight it even though the ruling has been published. I don’t think it’s going to change. But they’re fighting it based on the fact that it didn’t include hospital labs and it wasn’t done based on the average pay; it was based on the median. And as you know when you do things that way the average is usually much higher than the median. But they will continue to fight it through the end of December. But unless things change, it will be almost a 700 million dollar cut. And what they did was that they took the most, the top 20 clinical tests that are ordered. They took all the most frequent tests that are ordered and that’s where they made the cuts. I think they’re once again taking low hanging fruit and are going to get about the same amount of deduction they got out of pathology five years ago. That’s kind of where we are and that’s the status of PAMA as of today. And I don’t think it’s going to change; as a matter of fact, there was something in the Wall Street Journal today saying that the Republicans want to continue to press on these reimbursements from Medicare.

Medicare and CHIP re-authorization Act

The next Act that was, came out in 2015 is the Medicare and CHIP re-authorization Act. And CHIP stands for Children’s Health Insurance Program. And you’ve probably read about it in the paper because Congress let it expire, but I think they passed it now. But this original Act in 2015, the way it affected us is it’s establishing a quality payment program. We are going to have Merit Based Incentives Payment system, MBIPS as you see, and pretty much everything you read applies to every physician, not just pathologists or lab people, it’s every physician is going to have a merit based incentive program. At the quality payment program-mature, CMS is likely to stun set the claims based reporting option. This means that physicians, when they see a patient in the office, there much like our fee-for-service schedule. They see a patient in the office and they bill for that service provided that day in the office. Where, when we get a test, we bill for the test that we do. That’s going to change under this new system for all of us. And they really started working this back in 2006 with the Physician’s Quality Reporting System, that’s what PQRS stands for. I don’t know if you all remember but when they came out with it at first it was just a bonus program and breast cases were the first ones. All positive breast cases that were Medicare patients and they were reported to CMS, you were given bonus points for it and at the end of the year you would get a nice little bonus from CMS. Now they’re up to eight different reporting, they added lung and they added melanoma. They have eight different measures that they track now. They’re going to carry all those over to the MBIPS program and provide those a bonus or a penalty.

They gave bonuses for the first couple of years and then after that they started giving penalties. If you don’t do anything, you get a penalty. If you do partially what you’re supposed to do, you might just break even. But if you get a penalty, like for quality guidelines you would get a 4% penalty on all your payments for the following year. That’s how they do it. The doctors have to make sure that they are sending this data in and keeping track of it.

The scoring system of the MBIPS is going to be: Quality, Improvement Activities, Advancing Care Activities and Cost Containment. They have to demonstrate that they are managing the cost in their practice; or for pathologists in their laboratory.

The CAP, the College of American Pathology, they really went out and advocated for the pathologists, and were all non-patient facing specialties that just pathology because some of those guidelines are very difficult when you don’t see patients on a daily basis. CAP was able to secure additional flexibility for pathologists under MBIPS. For 2018 for instance, they only are going to have to show quality 85%, and improvement activities 15%. Now what’s going to be interesting to me is I don’t know how this is going to flow down to us in the laboratory but certainly I think it will and it should because we should be working with the pathologists to help them meet these guidelines and it will meet guidelines for the lab also. And 2017 is a transition year and pathologists will only have to submit one quality measure to prevent a 4% penalty. It’s very easy the get that percent in one thing and they don’t get a penalty. I’m sure that, I hope that all of them will be able to get that done.

CAP launched a quality registry at their National Meeting this year at CAP-17. They worked and assisted pathologists and with meetings and teaching how to meet these guidelines. CAP will be helping the pathologists to make sure that they meet all the guidelines that are going to be required.

What’s next?

Medicare says they’re going to continue to focus on increase quality and decrease cost. CMS says they’re going to continue to push down on reimbursement on over utilized tests by lowering reimbursement and by bundling. I think we’ve seen the worst in pathology; I think we might see more and more bundling, but I don’t think we’re going to see the large cuts as we have. I think we’re over the hump; we’ve survived it and made changes to adjust to it. I think that’s good news for us. We will see increase consolidation in Healthcare systems and laboratories. As a matter of fact, the front page of Wall Street Journal today had an article that two of the largest Catholic Health Systems in the country are talking about merging, which will make the biggest healthcare system in the US. It will be larger than HCA. I think we’re going to see more of that and more partnering. I think partnering is a good way to control cost because that’s what we really need to do is to control cost, and you can do that with just partnering without having to do full consolidations.

10 years ago even if there were insurance companies said, “all the work should go to one of the large nationwide laboratories,” because they have labs everywhere. They would still pay if it went to one of the other local independent laboratories, they could still get paid the labs. What we’re finding is more and more they’re declining to pay those and they’re requiring that if you have a certain insurance, you need to make sure that your specimen is going to the preferred laboratory or it will not be paid and then the patients going to get stuck with the bill. We’re seeing more of that happening.

What can you do?

The most important thing for labs to do right now is get their “financial house” in order. PAMA bought the realization that labs do not have the indebt accounting detail on pairs that CMS is demanding. CMS has told public labs in 2018 and private labs by 2019 must be able to meet these complex PAMA reporting because this reporting was not a one-time thing, it will be done, I don’t know if it will be done annually, but probably at least every two years or so, as well as the new accounting standard for revenue recognition. For the last 30 years, we have focused in the laboratory in new technologies and improving our services, improving our turn around time, reducing errors, especially in pathology has come such a long way. We’ve done a great job in this area, but I think laboratories have neglected what we refer to as the “back office.” We need to be that brought up to date within the next two years.

I think everyone, and even if you’re a tech, whatever your job is in the laboratory, management, tech on the bench, you need to understand your business and the lab that you work in because every lab is different. If you understand what’s going on in the lab business, you can help your lab be successful. If you’re in management, you need to know your cost per test. I’m always shocked very few people do in pathology know the cost per test. We have to focus on improving quality, improving efficiency, reducing errors and really all these things and improve patient safety. These are things that we’ve been doing but we really need to be able to demonstrate them going forward.

I think utilizing automation that increases efficiencies. We have to reduce our cost per test and your two biggest cost are labor and supply costs. Those are the questions you need to ask your vendors, “is this going to reduce the labor in my laboratory, is it going to increase my supply cost or is it going to reduce it?” I think utilizing automation really increases efficiencies and that improves quality and reduces errors. Errors have a tremendous cost to them and I think if we work it the right way it’s a great benefit and have as much automation as we can. Implementing Lean processes, you reduce your cost when you reduce waste. I go into labs all over this country and most of them are stall labs and they need help and that’s why they have asked me to come and I just see so much waste and so much inefficiency and that can really reduce your costs and grow your revenue to increase volume efficiencies. I know we always talk about Lean, but I think it’s imperative now. We just have to do more with less and be better at it and have the quality to go with it. And that adds value to what we do. It’s very important what we do, and we need to do it right. I see over production in labs all the time; people put extra slides just in case somebody might order something. I mean all these things go on. We need to have more standardization. Duplication or repeating of procedures do to defects. Errors cost a tremendous amount of money and they’re not good for patient care either. We have to get rid of them and we have to do things right and do it the first time. One of the things that I’m really, kind of my pet peeve is skill utilization. I still go into small pathology labs and they’ll say, “We don’t hire anybody but techs. Everybody in here has to be a tech working here.” And I just think that you should be using your techs. We have a shortage of techs in this country and we should be using them for the technical duties and we should be using lab aids for filing blocks and slides, cleaning and there are a lot of duties that can be done, and you could make better utilization of your techs than I see currently in many labs.

Think outside the box. Finding new ways to show value, this is big. How do we show the value, we know we’re valuable, those techs in that lab. And we’re valuable to the pathologist because if we don’t do our job right they’re not going to be able to do theirs right. But we need to find new ways to show value. There’s a group of large health systems around the country that have formed an organization called Clinical Lab 2.0. Their value proposition is finding new ways to deliver value to hospitals, patients, physicians and payors. It’s a great program, there’s been a lot written about it. When you see something on it, check it out. I think it’s great for hospitals, I’m struggling with how independent pathology labs can demonstrate that same value to work that closely with the clinician. But somehow pathology labs, because we are important at part of the process, and our challenges to find and develop our valued proposition. What can you do? You need to stay abreast of what’s happening. Become active in your state in National societies, that’s all we talked about at the National Society meeting. We talk about it at State meetings, follow websites, because the changes are going to keep coming and they may not be reimbursement cuts but they’re going to demand quality and value, which is all good, it’s good for us and it’s good for the patient. Stay up with what’s happening.

Just to summarize, everything is changing in Healthcare in the US. AP certainly has been affected but we’re all in this together and we have to work together. Increase efficiencies, reduce costs, improve quality, and determine our value. It’s a requirement now and I think it’s great and we’re going to do it, we’ll do a great job with it.

I’ll leave you with Winston Churchill says, “To improve is to change, and to be perfect is to change often.” We have been changing often. We need to be innovative, we need to try change in our laboratories so that we can met these guidelines. I know most of you feel like you should be perfect now as much changes as we’ve had but we can always try to improve, and we have to change no matter how difficult we sometimes find it.


First, will any of the top 20 clinical tests being cut by PAMA in 2018 affect the anatomic side of labs, that is 88305 again?

Loretta: No. The clinical lab most common tests, I actually haven’t seen the list of what they are but I imagine they’re CDC’s and all those kind of things. All of our tests are off the physician’s fees schedule and not the clinical fee schedule. We do not have to worry about that.

Are any of the companies that provide reagents and instrumentation getting hit by any of these regulations?

Loretta: I think that getting hit by them, they don’t get hit by the regulations. I think that their goal was to be aware of them so that they can help you meet your goals. And I think that’s really important that they understand what is happening in the Healthcare system and they know that they need to work on providing products and instrumentation that’s going to help you meet those guidelines as we go forward in our value and quality expectations.

The flu test actually is an example of that isn’t it? Are any of the companies that provide—what is the best way to figure cost per test? Is there a specific formula that we could use?

Loretta: The easiest way is to depict, if you have the simple way, but it’s not going to give it to you specifically by test, is going to be, if you took all of your cost if you have access to that. You’re not supposed to take fixed cost like rent and electricity and things, these are just the cost of supplies and reagents and labor and all of the equipment and so forth, and divide that by the number of CPT codes that you did or billed, that would give you your average cost per test in your lab. If you’re going to get more specific, it is a lot more detailed then you have to break it down per test. I generally tell people the easiest way I think is to separate it by take IHC and do IHC separately because those are higher cost antibodies and higher cost tests, but they get a higher reimbursement too. If you take that out of it and keep primary staining, and just divide it, in that way it’s not a very difficult thing. It would be the, your costs over the month divided by the CPT codes that you billed for those primary staining. That would be your 88305’s and so forth. It’s the simplest way. I believe that on the national histology block, the block has some data and one of their libraries about how to really, specifically, if you want to do a deep dive into each one of the CPT codes and how to determine cost.

For the CAP scoring system measures, what kind of documentation is needed to show quality measures and improvement activities?

Loretta: I think that CAP requires you to have a Quality Management system. That’s one of the documents that you put together and in that document you should be, if you’re a CAP certified lab, you put all the things that you measure. Most people do measure turn around time, they measure errors, and you can have very specific things that you choose to measure in your laboratory. But that should all be listed in your quality program and I’m sure that CAP has some guidelines that help to set that up.

Next, what changes are expected for molecular testing in 2018?

Loretta: There was no changes in reimbursement. We have so many new molecular testing, and that’s a great question because what I’m finding from clients, especially some of my clients that are small or medium size independent labs also have an independent clinical lab. They’re worried about how this top 20 tests are going t affect them and what they can do to offset that loss of revenue. And a lot of them are looking at bringing new molecular tests, new molecular micro-biology testing and there are so many new things out there that they could bring in and I just tell them “be sure to do your homework” because with these new molecular tests coming out so fast they don’t have CPT codes for them yet. You really need to dig and find out if you’re going to get reimbursed, number one, and how they’re going to do the reimbursement, that they do what is called “cross-walking” and “gap-filling.” If they don’t, if they accept that this new test, they’ll pay it, but they don’t have a CPT code and a dollar amount to go with that, what they will do is what they call “cross-walk” it, that means they’ll look for another CPT code that’s similar. And that’s what they call “cross-walking” and “gap-filling,” and they will tell you to use this specific CPT code even though it’s not really for that test but it’s the closest they have.

There’s a lot of that going on and so you have to really dig deep to make sure that these new tests, that you’re going to get reimbursed enough to cover your cost. I think it’s wonderful they’re coming out and they’re coming out quickly and they’re automated, it’s fabulous, but we just need to be careful on our timing on getting them into your lab and making sure that your regional Medicare site will pay you for them.

Is there a possibility of deep cuts to the clinical lab fee schedule for 2019 as well as 2018?

Loretta: What the law says in the Act that was passed set by Congress says they could do no more than 10% a year for three years. They did 10% the first year. They could do 10% again next year, but I think it will be a “wait and see” thing. They have the first three years, the law gives them the ability to do up to 10% a year for three years. I don’t know the answer, but it could.

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