College of American Pathologists
Printable Version

  CAP Scan


cap today



December 2006

Feature Story

Pathology faces 11 percent cut in 2007
Final work relative value increases

Senator introduces bill to modify cytology PT

MUEs now more manageable

AMA, CAP to survey physician practices

bullet Pathology faces 11 percent cut in 2007

The Centers for Medicare and Medicaid Services on Nov. 1 issued the final rule on physician payments, and though it accepted some of the College’s recommendations, it failed to accept the recommendations of the CAP and other specialties to pay for an increase for evaluation and management (E&M) services or on budget-neutrality adjustments. But the CAP will have an opportunity to work on the practice expense issue, which will be phased in over four years. The final rule did not include self-referral or pod labs. CMS officials said they are taking comments—including those of the College—into consideration and will issue in the future a proposed notice of rulemaking on this issue.

The final rule results in an 11 percent cut for pathology, which comprises the budget-neutrality adjustment for E&M from the five-year review (–5 percent), the short-term effect of practice expense which is –1 percent, and the cut based on the flawed sustainable growth rate (–5 percent). The SGR cut was changed to five percent in the final rule instead of the 5.1 percent proposed in August.

The rule reflects the desire of the CMS to give more to primary care physicians. Family practice breaks even at zero percent despite increases in many of its codes. All other medical specialties face declines in 2007, with the following to see the most significant cuts: anesthesiology (–12 percent), interventional radiology (–12 percent), radiology (–14 percent), and pathology at –11 percent. These specialties do not benefit from evaluation and management code increases.

Without a fix, those won’t be the last cuts, as payments are scheduled to be cut by 37 percent over the next nine years based on the current flawed SGR. Because Congress will control nearly half of the overall cut to pathology through the SGR, all pathologists are urged to call their members of Congress to ask for their support of a legislative solution. This can be done by calling the American Medical Association’s grassroots hotline at 800-833-6354.

The longer-term impact on hospital-based pathologists, such as PC-only billers, remains unresolved in the final rule. Though the CMS is going forward with its proposed changes to the practice expense method, which the College believes does not fairly compensate PC-only billers for their overhead (indirect) costs, the changes are being transitioned over a four-year period and the CMS is willing to work with the CAP to better understand the CAP’s recommended approach. The CAP’s approach would ensure that indirect practice expense costs are allocated based on the share of PC- versus TC-only billers. After reviewing the College’s comments, the CMS said, “... we will retain our current methodology for the allocation of indirect PE for services with TC and PCs, but we welcome further clarification regarding this suggestion.”

The CMS did adopt College-recommended practice expense direct input modifications for codes 88304 and 88305, and it increased the probe quantity for CPT code 88367, in situ hybridization, auto, equal to that of the other two codes in the family. The CMS also finalized the updated equipment, supplies, and clinical labor for flow cytometry services.

It did accept the College’s recommended increases in work relative value units, or WRVU, from the five-year review. Final work RVU increases for codes the CAP brought forward in the five-year review are listed below.

bullet Final work relative value increases





In addition, the CAP requested earlier this year that the work RVU for CPT code 88334, Pathology consultation during surgery; cytologic examination (eg, touch prep, squash prep), each additional site, be increased to the RVS Update Committee-recommended work RVU of 0.80, as the CMS decreased the RVU to 0.59 for 2006. Based on the CAP’s comments, the CMS referred the code to the multispecialty validation panel for review. As a result of the statistical analysis of the 2006 multispecialty validation panel ratings, the CMS increased the work RVU for 88334 to 0.73.

The rule notes that the TC grandfather is scheduled to expire Dec. 31. The College, however, continues to pursue efforts to extend the grandfather beyond that date.

bullet Senator introduces bill to modify cytology PT

U.S. senator Johnny Isakson (R-Ga.) introduced legislation last month, with the support of the original cosponsor, Republican senator Saxby Chambliss of Georgia, to modify the controversial federal regulations requiring annual proficiency testing of pathologists and lab professionals who screen for cervical cancer. The legislation makes the program educational rather than punitive.

The Cytology Proficiency Testing Improvement Act, or S. 4056, suspends the current regulation that requires annual proficiency testing and instead requires annual continuing medical education that would provide opportunities for improving screening and interpretive skills. The legislation tracks the CAP’s recommendations to model federal cytology quality assurance standards after the Mammography Quality Standards Act of 1994.

The legislation builds upon the existing, stringent federal quality control requirements of the Clinical Laboratory Improvement Amendments of 1988 by providing the laboratory director with an additional tool to evaluate ongoing performance by correlating CME results with day-to-day performance and taking corrective action if necessary.

The legislation modifies CLIA, which required the secretary of Health and Human Services to establish standards for ensuring quality cervical cancer screening. The regulation, promulgated in 1992, was first implemented by the Centers for Medicare and Medicaid Services in 2004. The legislation resolves the controversy over the statutory requirement, which the CMS interprets as mandating an annual proficiency test for all professionals who screen for cervical cancer.

Rep. Tom Price (R-Ga.) in September introduced similar legislation in the House, H.R. 6133. Joining Price as cosponsors of the Cytology Proficiency Testing Improvement Act were representatives Nathan Deal (D-Ga.), Bart Gordon (D-Tenn.), Stephanie Herseth (D-SD), Charlie Norwood (R-Ga.), Sue Myrick (R-NC), and Dave Weldon (R-Fla.). In 2005, the House passed H.R. 4568, The Proficiency Testing Improvement Act of 2005, which called upon the CMS to suspend the current program and to implement changes.

bullet MUEs now more manageable

Phase two of Medically Unlikely Edits, or MUEs, was released in November, and though there are areas on which the College will comment, the list is much more manageable and reasonable than had been seen in earlier drafts.

The CAP is evaluating a few pathology codes and a number of laboratory codes. On the pathology side, there are MUEs of one for cytopathology codes with the assumption that women have only one cervix/uterus. In fact, the literature shows that uterine (including cervical and vaginal) duplication occurs in up to 1.2 percent of the female population, so there are clinical reasons when a cervical and vaginal smear need to be done together.

The laboratory MUEs are based on the nature of an analyte and are in general determined by one of three considerations:

  • The nature of the specimen may limit the units of service as for a test requiring a 24-hour urine specimen.
  • The nature of the test may limit the units of service as for a test that requires 24 hours to perform.
  • The physiology, pathophysiology, or clinical application of the analyte is such that a maximum units of service for a single date of service can be determined. For example, the MUE for RBC folic acid level would be one because the test would only be necessary once on a single date of service.

An example of laboratory codes on which the CAP would comment are 85097 (Bone marrow smear, interpretation), which limits units of service to one for that code when in fact it should be at least two units of service for those cases where bilateral bone marrows are done for staging purposes.

The College will work with pathology and laboratory groups to formulate comments on these edits by Jan. 8, 2007 for implementation in April 2007.

bullet AMA, CAP to survey physician practices

The American Medical Association, with the support of the College and more than 60 other medical specialty societies, will begin conducting a multispecialty survey of America’s physician practices beginning in April 2007.

The purpose of the survey is to collect up-to-date information on physician practice characteristics in order to develop and redefine AMA and College policy. Data related to professional practice expenses will also be collected. The AMA and the College will survey thousands of physicians over the year from virtually all physician specialties to ensure accurate and fair representation for all physicians and their patients.

Pathologists may be asked to participate in this study, and participation is encouraged because the data obtained will be a critical source of information for the AMA and the College. Participation ensures that the information collected will represent pathologists’ concerns and those of their patients to national policymakers.

Gretchen Schaefer is director, CAP Communications for Advocacy, Washington, DC.