Medicare Physician Quality Reporting Initiative:
Begins January 1, 2008 For Selected Pathology Measures

Is Your Practice Ready to Participate?

To: PSA Affiliated Pathology Practices

Date: December 2007

We are writing to confirm your intention on whether or not your practice plans to participate in Medicare’s 2008 Pathology Physician Quality Reporting Initiative (PQRI).  Bulleted below are aspects of the PQRI which may assist in your decision making.

  • The Physician Quality Reporting Initiative (PQRI) offers pathologists a financial incentive to report quality measures for Medicare beneficiaries.

  • For 2008, there are two pathology-focused quality measures which relate to breast and colon cancer cases.  The 2008 PQRI bonus will be based on the reporting of quality measures and not on actual compliance with quality standards.  It is important to note that these quality measures will likely require little to no change in laboratory protocols, only modifications in reporting, documentation and coding protocols are required.

  • Bonus payments of up to 1.5% of total Medicare allowed charges (not just those for which quality measures are indicated) will be paid to physicians who successfully report quality measures for 80% of their eligible breast and colon cases in 2008.  It is important to note that the participation is measured by each individual physician as opposed to each practice; this is true for both computing the 80% as well as payment of bonuses on total Medicare allowed charges.  Further, it appears based on PSA data, that relatively few cases will actually be eligible for reporting which means that, proportionately, the work to enhance coding and documentation on the select cases in order to garner additional payment on all Medicare cases should yield a nice return on investment.

  • Participation in PQRI is voluntary.  To become eligible, registration with CMS is not necessary, but pathologists should begin reporting January 1, 2008 to help ensure that the 80% threshold is met.  PSA is requiring each billing client to affirm its participation intentions to aid us in effectively performing our services to support practices in obtaining a high level of compliance and to ensure that each practice is aware of its responsibilities in reporting and documentation with regard to PQRI.

  • PQRI data must be submitted to Medicare during the initial claim filing.  Claims resubmitted with PQRI information later will not be accepted by CMS.  It is important to begin participating early in the year in order to reach the 80% threshold required for bonus payment consideration.

  • Because all CPT and ICD-9 code pairs meeting this criteria for reporting will be captured by Medicare, it is important to complete the worksheet provided by PSA to determine which modifier to apply.

  • Each practice which elects to participate should assign the CPT Level II codes to all qualifying cases and must complete a PQRI worksheet for each case in which the CPT/ICD-9 code pairs will indicate inclusion in PQRI reporting.  This worksheet, along with the coding and documentation on the Pathology Report will indicate to PSA that this code should be applied and will serve as documentation in support of the assignment of the codes.

  • PQRI quality code reporting applies only to Medicare claims; however, since the pathologist or coder is not likely to have the payor information at the time the case is coded, the worksheet should be completed for all qualifying cases. For any cases where PSA determines that Medicare is neither the primary nor a secondary payor, PSA will remove the PQRI quality code prior to submitting the claim, and/or refile the claim, as appropriate to ensure proper payment from the commercial payors.

  • Cases submitted without the CPT Level II codes, where CPT/ICD-9 code pairs indicate inclusion, will count against the physician in determining the 80%.  It is the sole responsibility of the physician/physician group to assign and document these codes.


As the billing provider for your practice, PSA has implemented the following processes to support affiliated practices, who are participating in this initiative, in reporting this data:

  • PSA will provide information to practices regarding the PQRI initiative to aid practices in understanding and facilitate optimum participation.  Audio conferences were held on December 14th and 18th to explain the measures and to provide an overview of the program.  The audio files will be available on the PSA Extranet if you were unable to participate live. 

  • After January 1, 2008 (and pending final congressional approval).  PSA will begin development of certain system enhancements designed to aid in identifying those cases which may be eligible for the PQRI measures in order to assist practices in their participation.  Such programming is complex and will most likely not be ready for production use until second quarter 2008.  To the extent a case comes to our attention which is eligible and not reported, PSA will return the case to the practice for your review. 

  • PSA will provide tools including:  sample pathology report documentation, worksheets for documenting and reporting quality measures and decision trees for each measure, and will be available to answer your questions.

For additional information on PQRI pathology reporting measures and descriptions please contact: