Management of Pathology Practices

April 2008

Management Home Page


Dissecting the Physician Quality Reporting Initiative (PQRI)

Laura Edgeworth, HTL (ASCP), CPC

Manager, Coding Compliance, PSA, LLC – A MED3OOO Company


The pathology industry became eligible for participation in the newest phase of the Centers for Medicare and Medicaid Services (CMS) Physician Quality Reporting Initiative (PQRI) as of January 1, 2008.  The overall goal of the program is to promote improved reporting mechanisms of histologic grading and pathologic staging [pT (primary tumor) and pN (regional lymph nodes) categories] for breast and colorectal cancer cases.  Medicare is providing incentive for improved reporting mechanisms by reimbursing physicians 1.5% of all Medicare-allowed charges for the 2008 calendar year.  Only those pathologists performing evaluations on breast and colorectal cancer cases are eligible for participation.  The incentives are applied by provider rather than by practice, so there is a possibility that specialized pathologists (dermatopathologists, cytopathologists) will not participate.    


Criteria for Bonus Collection

It is important to note that all participants will not meet the criteria for collecting the PQRI bonus.  Medicare has established a baseline volume of total cases that must be reported to qualify for the measure, but the actual number of cases required has not been determined.  In addition, those with qualifying volume must report the PQRI measures in 80% of the eligible cases in order to be included in the measure.   This is determined by dividing the number of cases meeting the reporting requirements (numerator) by the total number of eligible cases (denominator).  The CMS identifies qualifying (denominator) cases by cross-referencing CPT-4 and ICD-9-CM codes and they have been monitoring the eligible cases since 1/1/2008.  Medicare does not require practices to register to participate in the program; therefore, their data system identifies all PQRI eligible cases for all providers.  Physicians cannot bill the PQRI reporting measures retrospectively, so it is imperative to begin reporting measures as soon as possible, if you wish to participate in the PQRI program. 


Reporting Eligible Cases

Eligible breast cases are reported with codes from either the 174 (Malignant neoplasm female breast) or 175 (Malignant neoplasm male breast) diagnosis code series in addition

to the 88307 or 88309 CPT code.  Eligible colon cases are reported with codes from either the 154 code series (Malignant neoplasm of colon) or codes 154.0, 154.1 and 154.8 (Malignant neoplasm of rectum, rectosigmoid junction) in addition to the 88309 CPT code.  In order to qualify for the numerator, the applicable level II CPT code, with or without modifier, must be indicated.  The chart below outlines the codes and the determination for use:



The pT and pN category and histologic grade are documented.


The pT and pN category and histologic grade are not documented, but medical reason(s) for exclusion is documented in the pathology report (ex: re-excision without residual tumor).


The pT and pN category and histologic grade are not documented, and reason for exclusion is not documented in the pathology report.



Identifying Ineligible Cases

PSA has assisted clients in preparing for the PQRI program and has instituted an internal quality control measure to identify the applicable cases.  While a manual review is currently being performed, computer updates similar to the CMS system are being installed.  To date, this review process has identified multiple instances in which cases are submitted for PQRI inclusion, but actually do not meet PQRI criteria.  In each of the cases, the diagnosis code precludes the case from eligibility.  The examples below represent the most commonly excluded cases: 


·                     In-situ carcinomas are listed separately from primary cancers in the ICD-9 classification.  For example, ductal carcinoma in-situ and lobular carcinoma in-situ of the breast are coded as 233.0 (Carcinoma in situ of breast and genitourinary system; breast).  The 233.0 is not included on Medicare’s list of eligible codes, so the 3260F is not reportable in these cases.  The 3260F is reported if the specimen is diagnosed with invasive cancer in addition to the in-situ component.


·                     Metastatic cancers are also listed separately from primary cancers in the ICD-9 classification.  Metastatic cancer is diagnosis coded based on the site of the secondary neoplasm rather than the primary cancer.  For example, an axillary lymph node with metastatic breast cancer is diagnosis coded as 196.3 (Secondary and unspecified malignant neoplasm of lymph nodes; Lymph nodes of axilla and upper limb), thereby bypassing the PQRI requirement. 


·                     Malignancies of the small bowel are coded with the 152 code series (Malignant neoplasm of the small intestine, including duodenum), which is not a PQRI-covered diagnosis code.



Identifying Non-qualifying but Eligible Cases

There are also a few circumstances in which the PQRI measure will identify non-qualifying cases as eligible.  The pathologists’ diagnosis is submitted as the ICD-9 code when diagnosis coding for pathology.  When the pathologist’s findings are normal, the coder should report the signs and/or symptoms leading to the specimen evaluation.  Suppose a liver biopsy (CPT code 88307) is submitted for evaluation and the only clinical information provided is “invasive right breast cancer.”  The pathologist renders a diagnosis of “negative for malignancy.”   The coder would report code 174.9 (Malignant neoplasm of female breast; Breast (female), unspecified) as the diagnosis code, making the case eligible for the PQRI denominator.  However, it was never the intent of the PQRI program to capture data on liver specimens.  The best way to prevent these cases from affecting the PQRI denominator is to provide more thorough clinical information in the pathology report.  For example, clinical history documentation such as “liver lesion” or “PET scan positive” directly relates to the liver biopsy and provides the medical necessity for biopsy and pathologic examination.


Reference Material and Tools

PSA has implemented the following processes to support affiliated practices in reporting this data:

·                    Audio conferences were held on December 14th and 18th to explain the measures and provide an overview of the program. The audio files of these conferences are available.

·                    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.   

·                    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.

·                    February 2008 Coding Challenge providing pathologists an opportunity to test their PQRI skills.

The information referenced above is available on the PSA Extranet at 


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

·                    Contact PSA or your billing service provider

·                    CMS website:

·                    CAP website:



For more information on the Physician Quality Reporting Initiative, please contact PSA at 800-832-5270 or  PSA provides billing, marketing, and business solutions to pathologists nationwide.