College of American Pathologists
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October 2008

bullet CAP responds to proposed 2009 ­physician fee schedule

The CAP submitted its comments Aug. 29 on the proposed 2009 physician fee schedule, which is expected to be published in final form next month.

In the proposed rule that the Centers for Medicare and Medicaid Services issued in July are provisions to strengthen the existing physician self-referral and anti-markup laws and narrow the ancillary services exception. Also in the fee schedule proposal is a request for guidance on the public use of data from the Physician Quality Reporting Initiative.

The job of commenting on the proposed rule fell to the three CAP committees that address such issues: the Economic Affairs Committee, which addressed Medicare payment policies; the Professional Affairs Committee, which commented on the physician self-referral and anti-markup proposals; and the Patient Safety and Performance Measures Committee, which responded to the question of the public use of PQRI data.

“Favorable progress has already been made in terms of tightening self-referral laws and the elimination of pod labs,” George Kwass, MD, chair of the Economic Affairs Committee, told CAP TODAY. “However, there were several areas where the College felt further action was needed.”

One of the first actions the CAP urged the CMS to take was to strengthen without further study the anti-markup provision to include all technical and professional component diagnostic tests unless the physician who performs the pathology services is dedicated solely to that physician group. This would protect legitimate multispecialty groups that employ pathologists full time. It would also, the CAP said, “go a long way to close down the ‘in-office’ loophole where there is a lack of integration between the pathologist and the billing practice.”

The College recommended that exceptions be made for single-specialty pathology physician groups and independent labs that use pathology/laboratory CPT codes for at least 75 percent of their billings. The CAP also urged the CMS to clarify that the anti-markup provision should not apply if a pathologist orders a special stain when a physician not affiliated with the pathology practice ordered the initial underlying test. “This would clarify that dedicated pathology practices and independent laboratories,” the CAP said, “are not subject to the anti-markup provision for certain purchased diagnostic tests and interpretations or the ordering of special stains to perform better the tests ordered by outside, independent physicians.”

As an alternative, the CAP offered the following: giving an exception to any lab in which at least 75 percent of the diagnostic services performed have been ordered by physicians outside of the group, lab, or entity that performed the services. This would avoid the unintended consequences, the CAP said, of applying the anti-markup rule to legitimate lab operations. “It also would not protect other single-specialty groups that seek to bring the lab in-house,” the CAP said, because such practices would not satisfy the requirement that 75 percent of tests have to be ordered from outside the group.

Jonathan Myles, MD, member of the Economic Affairs Committee, says the CAP recommendation would “effectively put an end to pathologists going from office to office reading slides so the medical practices could collect payment for the technical component.”

In favor of CMS’ efforts to define in-office ancillary services, the CAP offered this: Ancillary services should be limited to those that can be performed and for which results can be reported while the patient is in the office. Anatomic pathology services should not be considered in-office ancillary services, the CAP said, and added: They are “very different from the routine clinical laboratory tests that were contemplated when Congress provided for the in-office ancillary services exception” to the Stark Act.

As CMS considers revising the parameters of the exception, it should bear in mind that there is no medical reason, the CAP explained, to perform a lab test in a physician office that cannot be completed at the time of the office visit. “The only reason why a practice seeks to perform such tests is to profit from the tests that the physician orders,” the CAP said.

The CMS is seeking feedback on how PQRI data may be used by physicians, consumers, and other stakeholders in a public reporting system. The CAP opposes publishing results anytime soon on the grounds that the data are insufficient.

Only two pathology performance measures are included in the program at this time, and the CMS currently does not permit pathologists who work at independent labs to participate. At first, the CMS said it was a technical problem that prevented qualified pathologists from participating, but now it says it is following the rules set down by Congress and new legislation is needed to correct the problem. The CAP is working with the CMS to find a more expeditious solution and urging that more pathology measures be added.

“These are two major problems pathologists have with this program right now,” says Patient Safety and Performance Measures Committee chair David Witte, MD, PhD. “Taken separately or together they each prevent a significant number of pathologists from participating in the program, and neither is a reflection of their performance.”

Justin Herman is CAP manager of advocacy commu­nications, Washington, DC.