College of American Pathologists
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November 2007
Feature Story

bullet Pay-for-performance measures ready for '08

Two pathology pay-for-performance measures may be applicable for pathologists reporting on quality measures with their 2008 Medicare claims.

The measures received final approval Oct. 18 from the AQA, a multi-stakeholder payer-supported organization, and should be included in the final 2008 physician payment rule from the Centers for Medicare and Medicaid Services.

"The College is pleased to lead development of pay-for-performance measures for the specialty of pathology," said CAP president Jared Schwartz, MD, PhD. "We are confident our first two measures are based on sound science and promote high-quality health care."

The pathology measures were developed by the College and the American Medical Association Physician Consortium for Performance Improvement, based on CAP breast and colon cancer protocols. The AMA designated the College in 2006 as the lead organization for the development of pathology measures.

Members of various College committees convened a working group in 2006 for ongoing development of measures. Proposed measures undergo an internal review and final approval before they are submitted to the AMA consortium.

From there, the measures are submitted for various external reviews, with final approval sought by the AQA. The CAP working group is developing measures now for 2009 and beyond.

Though the bonus in 2008 will be based on reporting on the measures, not performance, the CMS plans to make the performance data publicly available.

"The College will continue to proceed with cautious optimism while it develops further measures for consideration," Dr. Schwartz said.

bullet In Mass., opposition to licensure of lab personnel

The Massachusetts Society of Pathologists, with the CAP's support, voiced strong opposition to legislation that would establish state licensure of clinical laboratory personnel during a hearing Oct. 10 before a joint State House and Senate committee on public health.

No person or organization provided testimony in support of the legislation. Donald Ross, MD, president of the Massachusetts Society of Pathologists, testified that the Clinical Laboratory Science Protection Act would substantially limit entry into, and advancement within, the clinical laboratory workforce and have a negative impact on laboratory quality and patient care in Massachusetts.

"There is no justification for licensure based on a dispassionate review of workforce facts from states with licensure, and the quality data that is available," Dr. Ross said. "There is, however, a growing body of documented evidence that licensure is detrimental in that it can exacerbate clinical laboratory workforce shortages and, consequently, degrade and jeopardize laboratory quality."

In its testimony, the MSP highlighted a 2005 state licensure law passed in New York̵the only state in the 15 years since CLIA was implemented to enact laboratory personnel licensure—as a warning against unnecessary regulation.

The New York State Department of Health assailed the licensure law in 2006 comments to the New York Department of Education, which is the agency that administers the law. The health department cited the law's negative impact on laboratory operations and diminished flexibility for lab directors in hiring qualified staff.

The CAP is united with the Massachusetts pathology society in condemning the legislation. Others in opposition are the Massachusetts Medical Society, Massachusetts Hospital Association, American Association of Bioanalysts, and American Clinical Laboratory Association.

bullet Final fee schedule could end pod labs

The final 2008 physician fee schedule from the Centers for Medicare and Medicaid Services includes a CAP recommendation that effectively puts an end to pod labs.

The CMS adopted the recommendation on the anti-markup provision of the rule by focusing on where the service is performed, regardless of who performs the service. If a physician or group orders a test and bills for a service not performed in the physician's office, then the anti-markup rule will apply to the technical and professional components. This will effectively end pod labs.

However, because the provision does not apply to independent contractors performing services in the physician's office, problems remain with other abusive contractual joint ventures. The CMS has committed to working with the College to address such CJVs in a separate rulemaking.

Under the final rule, all physicians will face a 10 percent decline in Medicare payment because of the flawed sustainable growth rate formula the CMS uses to calculate payment to physicians. The College is working closely with the American Medical Association on a legislative solution to repeal the SGR.

Pathologists will face an additional two percent reduction owing to the five-year review and the impact of changes to CMS' method for estimating practice expense. Hospital-based pathologists will see the largest negative impact due to the practice expense formula and could experience declines of up to four percent next year and 18 percent by 2010, over and above the SGR effects.

The PE method was first implemented this year and will be transitioned over four years. The College will continue to work with the CMS on a separate rulemaking to address PE changes.

bullet Fight to preserve AFIP continues

The College and coalition partners continue to fight to preserve key functions of the Armed Forces Institute of Pathology, located now on the campus of the Walter Reed Army Medical Center.

Recent efforts culminated in language in the House and Senate versions of the defense authorization bills for fiscal 2008 that essentially renames AFIP as the Joint Pathology Center and relocates it to the National Naval Medical Center at Bethesda.

As the defense authorization bills head to conference, the coalition sent a letter Oct. 4 to Senate and House Armed Services Committee members urging that the Joint Pathology Center be created and that AFIP functions critical to military and veteran health care be preserved.

The letter contained these recommendations: o Mandate the establishment of the Joint Pathology Center as provided for in the House language. o Ensure the preservation and modernization of the existing AFIP Tissue Repository as provided for in the Senate bill. o Clarify that diagnostic pathology consultative services referenced in both House and Senate provisions include secondary consultative services to members of the civilian, veteran, and Department of Defense communities.

bullet Calling for public release of MUEs

The CAP reiterated its call for the Centers for Medicare and Medicaid Services to publicly release medically unlikely edits in response to the agency's request for comment on current policy restricting distribution.

In its Sept. 25 letter, the College shared the concerns it has about nonpublic release, including the inability of medical societies to educate members on MUEs and modifiers and the policy's inherent contradiction of CMS' goal of transparency. The College also signed on to an AMA letter sent to the MUE contractor, echoing similar concerns about the need for transparency and public disclosure.

In support of restricting public release, the CMS has said the potential exists for providers to game the system. The College disagrees because the units of service are driven by the specimens or test requests that referring physicians submit. General financial incentive does not exist for providers to change the number of test requests or specimens sent to labs based on MUEs.

bullet California governor signs direct billing law

The governor of California signed legislation Oct. 13 to expand the scope of the state direct billing law from cytological to anatomic pathology services.

The bill, spearheaded by the California Society of Pathologists and supported by the College, will prohibit clinicians from billing patients and third-party payers for anatomic pathology services they don't perform or supervise directly.

Current law in California prohibits clinicians from billing patients or third-party payers for cytological services relating to the examination of gynecological slides. Additionally, current California law, which will remain in effect even with enactment of S.B. 661, prohibits markups on all other clinical laboratory services.

Justin Herman is CAP manager, Communications for Advocacy, Washington, DC.