College of American Pathologists
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August 2, 2012  •  Volume 28, Number 16
Next Issue: August 16, 2012
© 2012 College of American Pathologists

In This Issue:

MSP-CAP Set Precedent By Clarifying Pathologists’ ACO Role in Massachusetts Health Care Reform Legislation

The Massachusetts Society of Pathologists (MSP) and the CAP have successfully helped shape pathologists’ future role in accountable care organizations (ACOs). The success comes as state lawmakers on July 31 passed a major health care reform bill designed to cut health care costs in the state by $200 billion over the next 15 years. The legislation, initially proposed by Governor Deval Patrick (D) was developed in the legislature over the course of several years and then negotiated in a nearly 350-page bill by a House and Senate conference committee this week.

The recently passed legislation includes a section devoted to the promotion and certification of Accountable Care Organizations (ACOs) by the State. The ACO provisions in the bill include language advocated by the MSP and the College that expressly includes “clinical laboratory and pathology services” as part of the patient “care continuum” of services that is the goal of ACOs. In addition, the ACO provisions in the bill provide for the state to consider in its standards for ACOs “protocols for provider integration, both with providers within and outside of the provider organization, including, but not limited to, clinical integration of the medical director of the laboratory, accredited or certified under the federal Clinical Laboratory Improvement Act of 1988, providing these services to the organization.”

The MSP-CAP provision in the bill establishes a policy precedent—with national implications—to elevate pathologists’ role in the ACO environment, helping to ensure that pathologists are part of the medical and physician hub of these nascent entities. A recent white paper issued by the CAP illustrates the medical value that pathologists can deliver when properly integrated into the ACO clinical decision-making process. The language in the bill relating to the role of CLIA medical directors is one of multiple criteria that the state will use in determining whether ACOs merit official certification. Apart from providing a method of state certification, the bill also affords ACOs preferences in contracting for the provision of state health care services.

The inclusion of the MSP-CAP language follows several years of advocacy in which pathologists met with legislative leadership, policy staff and health care advisers in the Governor’s office in an effort to underscore the critical role of pathologists in the diagnosis and treatment of patients. “The legislators understood that our objective is for laboratory medicine specialists to provide guidance on optimal utilization of laboratory tests through their collaborative efforts with other medical colleagues,” stated the MSP President Stephen P. Naber, M.D., PhD, FCAP. In support of the pathologists’ role in ACOs, the Massachusetts Leukemia and Lymphoma Society wrote State legislators this March that a “pathologist’s medical judgment can enhance patient diagnosis and treatment by reducing or eliminating testing that is medically inappropriate while helping to ensure that patients with cancer receive all medically necessary testing.”

The legislation did not include language from a House passed bill, backed by CAP and MSP, that excluded pathologists from electronic health record “meaningful use” requirements that are linked to medical licensure in the bill.

The major cost control provisions in the legislation limit health care costs to the growth rate in the state’s overall economy from 2013 to 2017. For 2018 to 2022 the limit is set at slightly below the state’s economic growth rate. Governor Patrick is expected to sign the legislation into law.

New York Governor Cuomo Flooded with Letters Urging Veto of Self-Referral Bill

In a massive New York grass-roots effort, pathologists, physician groups, clinical laboratory personnel, and allied health professionals from several medical specialties are urging Governor Andrew Cuomo to veto legislation that would weaken the state’s self-referral law. A July 20 coalition letter to Cuomo from the Alliance for Integrity in Medicare (AIM) urged the veto of Assembly Bill 3551/Senate Bill 4660 noting that “the existing New York prohibition of physician self-referral, which exceeds that provided under federal law, provides critical protections against abusive business practices that demonstrate the state’s commitment to protect patients from overutilization of medical services and increased health care costs.”

The AIM coalition includes the American College of Radiology (ACR), the American Physical Therapy Association (APTA), and the American Society for Radiation Oncology (ASTRO), among others, including the CAP. The July AIM letter also noted the original 1992 self-referral law was signed by then Governor Mario Cuomo—the current Governor’s father—with the intent to end business practices that can “lead to unnecessary utilization, foreclose competition and compromise the quality of care.” A separate July 13 letter from ASTRO stated that in self-referral arrangements, “the quality of cancer care suffers” and elaborated that “physician practices will steer patients toward the services they wish to offer, rather than those that might be better for the patient.”

The CAP and the New York State Society of Pathologists (NYSSPATH) also sent a letter requesting a veto of the legislation last month and has mobilized hundreds of letters and e-mails from pathologists across the state to the Governor’s office. The Governor is expected to make a decision on whether to veto the bill this month.

CMS Peer-Reviewed Journal Publishes Mitchell Research on Self-Referral

The research conducted by Georgetown University researcher, Jean Mitchell, PhD, and published in the April 2012 edition of Health Affairs, is now the basis for a second article, Linkages Between Utilization and Prostate Surgical Pathology Services and Physician Self-Referral, published in Medicare and Medicaid Research Review (MMRR).

MMRR is a publication of the Centers for Medicare and Medicaid Services (CMS) Center for Strategic Planning. It is a peer-reviewed online journal, reporting data and research that informs current and future directions of the Medicare, Medicaid, and Children’s Health Insurance Programs.

This new article provides a “trends analysis” of the data collected by Dr. Mitchell and reported earlier this year in Health Affairs, and further demonstrates clear overutilization by self-referring physicians, as well as their growing impact on overall utilization in their counties.

Key Measures:

  • Surgical Pathology Specimen Rate – The use of prostate surgical pathology specimens (jars or 88305s) per 1,000 male Medicare beneficiaries remained flat in counties without self referral (non-self referral counties), but jumped by almost 20% in counties with predominant self-referral. In those counties, 42% of utilization was attributed to self-referring physicians in 2005, and increased to 52% of utilization in 2007.
  • Prostate Biopsy Surgical Procedure Rate – Between 2005 and 2007, the prostate biopsy surgical procedure rate declined by 9% in non-self-referral counties, yet remained stable in self-referral counties. In those same counties during that same period, the percentage of prostate biopsy utilization by self-referral physicians jumped from 28% to 40% of all prostate biopsies.
  • Regression analysis – Self-referral effect on use rate was highly significant. For every 10 percentage point increase in the self-referral share in a county, the use rate of surgical pathology specimens (jars) increased by 8.3 jars/1000 male Medicare patients.

“As with the Health Affairs publication, the findings show that self-referral of diagnostic testing results in higher utilization and higher Medicare spending,” said Richard Friedberg, MD, PhD, Chair of the CAP Council on Government and Professional Affairs. “Policy makers can and must address this problem at its root, and re-evaluate the exceptions in federal and state self-referral prohibitions.”

The CAP, one of the funding organizations for Dr. Mitchell’s recent research, has long been the leading advocate for removing the anatomic pathology services in-office exception to the Stark self-referral law. CAP believes that closing the loophole could save Medicare hundreds of millions each year wasted on unnecessary lab tests.

See the Statline coverage of Dr. Mitchell’s research published in Health Affairs.

CAP Submits New Quality Measures to CMS for PQRS

The CAP submitted three new measures to CMS for its Physician Quality Reporting System that would help its members benefit from public and private pay-for-performance programs. There are five pathology measures in the 2012 PQRS that CMS is proposing to retain for 2013, but they do not cover all pathologists. Physicians who do not successfully report on measures in 2013 will face penalties in fee-for-service Medicare beginning in 2015 at -1.5% of Medicare revenues and increasing to 2% in 2016 and beyond.

Earlier this year, the Measures and Performance Assessment of the CAP’s Economic Affairs Committee began to develop evidence-based measures that could be coded, address gaps in care and cover pathologists that do not currently have measures available to them. In developing these measures, the CAP also was responding to a request from the National Quality Forum's (NQF) Cancer Steering Committee that CAP develop measures similar to the prostate reporting measure for lung cancer.

Candidate measures were due to the Agency on August 1 in order to be considered for inclusion in the 2014 PQRS. CAP sent these measures to experts for testing prior to submitting the measures to CMS. The three new measures CAP submitted are:

  • Lung cancer (small biopsies/cytology): Pathology reports based on small biopsies/cytology with a diagnosis of non-small cell lung cancer classified into specific histologic type or classified as NSCLC-NOS with explanation included in the pathology report
  • Lung cancer (resected specimens): Pathology reports based on resected specimens with a diagnosis of primary lung carcinoma that include the pT category, pN category and for non-small cell lung cancer, histologic type
  • Melanoma: Pathology reports for primary malignant cutaneous melanoma that include the pT category and a statement on thickness and ulceration and for pT1, mitotic rate

For more information on the PQRS program see the CMS PQRS Fact Sheet; for CAP’s existing measure portfolio, see this PDF. The new measures can be found online.

CAP Maintains Need for POS Transmittal Delay

In July members of the CAP Economic Affairs Committee and Advocacy staff met with CMS representatives to underscore the College’s position on CMS Place of Service (POS) Transmittal 2407. The CAP previously addressed CMS Acting Administrator Marilyn Tavenner via a letter on March 21, requesting CMS take additional time to evaluate the adverse effects the policy would have on anatomic pathology practices. The CAP addressed similar concerns with lawmakers on Capitol Hill, prompting letters from Iowa and Alabama Congressman to Ms. Tavenner, resulting in a delayed implementation date of the Transmittal until October 1.

The intent of the Transmittal was to clarify the POS designation for physician practices and the correct facility and non-facility payment rates for services paid under the Medicare Physician Fee Schedule. However, the Transmittal, which relies on face-to-face service to the beneficiary as the POS, caused confusion and payment denials for anatomic pathology services, which are often performed at a site other than the patient’s location.

During the meeting, Jonathan Myles, MD, chair of the Economic Affairs Committee (EAC) and Dr. Gerald Hanson, MD, head of EAC’s Regulatory Compliance Work Group, re-emphasized CAP’s earlier request to make edits to the Medicare Claims Processing Manual that pertains uniquely to physician pathology services, and provided examples of pathology technical component services that are performed at locations unrelated to the site where the patient is located. Also, they highlighted a common misunderstanding among contractors as to which services are bundled with the ambulatory surgery center (ASC) facility fee (POS -24), particularly the technical component of anatomic pathology services, and asked CMS to publish a reminder that no professional or technical anatomic pathology services are included in the edit lists for bundled ASC services.

The CAP also recommended that pathologists be allowed to use the POS 11 code for procedures performed on archive specimens or on a confirmatory or secondary opinion consultation.

The delay in implementation of the Transmittal to October also offered some relief to providers who were affected by the expiration of the TC Grandfather Clause, which expired on June 30, avoiding confusion and unintended consequences over which place of service would be appropriate during that timeframe.

HIT Bill Continues to Gather Co-Sponsors

Legislation to exempt pathologists from being penalized for failing to meet the federally mandated meaningful use standards for electronic health records (EHRs) continues to accumulate additional support. The Health Information Technology Reform Act (H.R. 4066) was introduced by Representatives Tom Price, MD, (R-Ga.) and Ron Kind (R-Wis.), and now has 33 co-sponsors. Hundreds of CAP members have responded to a recent “action alert” by the College that has resulted in an increase of co-sponsors.

A Senate version of the bill will be introduced by Johnny Isakson (R-Ga.). Senator Isakson also is seeking a Democratic co-sponsor of the bill. The CAP has been meeting with several Democratic Senate offices to secure a sponsor.

UnitedHealthcare Reverses TC Payment Policy

Following exchanges with the College, one of the country’s largest insurers is reversing a policy that would have impacted payment for the technical component (TC) of pathology services provided at ambulatory surgical centers (ASCs).

UnitedHealthcare announced earlier this year that beginning July 15, ASCs would be treated as a facility place of service (POS 24) when reported on the CMS 1500 claim form, and that claims submitted by physicians or other health care professionals would not be reimbursed for the TC for services provided at ASCs.

The motive for this policy change was to prevent duplicative reimbursements of the TC to physicians and ASCs by aligning their policy with CMS guidelines, which United asserted did not support payment for the TC. However, the insurer reversed the policy based on additional information provided by the CAP. Specifically, the College detailed how this policy misinterprets Medicare rules outlined in the Medical Learning Network Ambulatory Surgical Center Fee Schedule Payment System Fact Sheet, Medicare Claims Processing Manual, and applicable federal regulations stating that services furnished by an independent laboratory are not included within the ASC payment.

In the near future, United has indicated it will make changes to its claims processing system to allow for the TC payment of laboratory services when reported with an ASC POS (24), and will post an announcement to their Network Bulletin when the changes are completed. The College is requesting that this system fix be applied retroactive to the intended policy effective date of July 15. Statline will continue to provide updates on this issue.

Keep Up with the Latest CAP Advocacy News on Twitter

CAP Advocacy is now on Twitter. Follow CAP Advocacy’s daily “tweets” to keep pace with regulatory and legislative news affecting pathology. For the latest health care news, be sure to check out what we are following on Twitter.


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