College of American Pathologists
Printable Version

  Feature Story


cap today

Open house: CMS welcomes lab input in fee talks

October 2002
Karen Southwick

Laboratory specialty groups praised the Centers for Medicare and Medicaid Services for how it handled its recent meeting on payments for new clinical laboratory tests. CMS went so far as to say it would reconsider previous pricing decisions, a surprising and welcome change from its traditional “black box”approach.

The CMS committee that sets Medicare payments for lab procedures held its annual public meeting Aug. 5 to take testimony on reimbursement levels for new current procedural terminology codes. The codes had been specified by the American Medical Association’s CPT editorial panel.

The committee considered the testimony, and in mid-September, CMS posted on its Web site ( the tentative payment determinations for the 12 new codes. The public had until Sept. 30 to comment on CMS’ decisions. In early November the agency will issue to its carriers and intermediaries a program memorandum containing the final payment determinations.

Until a year ago, the CMS committee set fees for the CPT codes in private, offering little recourse for laboratory groups or vendors. In August 2001 the CMS opened its process to public input, as directed by federal legislation, but that first meeting frustrated attendees. For the most part, committee members merely accepted testimony and didn’t ask questions, offering little insight into their thinking.

This year’s meeting was different.“There seemed to be genuine effort on the part of CMS to make sure they understood what was being said and to ask for clarification,”says Joan Logue, a principal with Health Systems Concepts, a laboratory consulting firm in Longwood, Fla.“I felt that CMS was very receptive and wanted to work with the lab community, where last year it appeared they were having the meeting because it was required.”

Says Stephen N. Bauer, MD, the CAP’s representative at the meeting,“There was a lot more give and take this time.”Those who testified, including laboratory groups, vendors, and consultants, made their presentations and were then cross-questioned by committee members and others.

“In the past, the biggest problem has been that policy people run these technologically oriented meetings, so they make decisions based on policy rather than medical appropriateness,”says Dr. Bauer, laboratory director at Mercy San Juan Hospital, Carmichael, Calif. This time,“they seemed to be trying to find out why we recommended what we did. This is probably the best process available to CMS to do that.”

CMS committee members asked intelligent questions, particularly with regard to testimony from professional societies such as the CAP, ASCP, and American Clinical Laboratory Association, says Lee Hilborne, MD, who represented the American Society for Clinical Pathology at the meeting. These groups appeared to establish“a sense of credibility”with the committee, he adds. “It seemed that their opinions were particularly welcome given that they were presented with a great deal of professional input and objectivity.”

Logue, who has criticized how prices are set for new procedures, was pleased by CMS’ decision to reopen pricing decisions on CPT codes from 2000 and 2001. (Anyone who objects to those reimbursement levels can send comments via e-mail to CMS policy analyst Anita Greenberg at agreenberg

New codes can be“cross-walked”or“gap filled.”(Cross-walking applies when a newly coded test is clinically or technically similar to an existing one, so reimbursement is based on the related fee schedule amount. Gap-filling is used for new procedures where no comparable test exists. In that case, each local Medicare carrier determines payment for the first year. In the following year, CMS uses those amounts to figure out a national payment rate.) Both processes, however, tend to perpetuate past pricing mistakes.

Dr. Hilborne, who is director of quality management and professor of pathology at UCLA Healthcare, says that because earlier pricing was set without public input,“it was built upon a house of cards.”

“Pricing mistakes get perpetuated into eternity, like putting a Band-Aid on top of a Band-Aid,”he says.

Adds Logue:“Reopening the previous codes is going to be interesting to watch. They [CMS] can’t change things under statute, so the basis has to be that they made a mistake in judgment."

JoAnne Glisson, vice president of government relations for the American Clinical Laboratory Association, recalls that CMS“said they’re reopening this to correct mistakes, not to reinvent everything. If we can convince them they made a mistake, they’ll correct it to a degree.”

Although most of the 12 new codes considered at the meeting were routine, there was disagreement on four of them. Specialty societies such as the CAP generally are more likely to recommend gap-filling for new procedures, while vendor organizations prefer cross-walking because it’s more predictable.

For example, for CPT 8388X, natriuretic peptide, the ASCP and CAP recommended a gap-fill, but ACLA and other vendor groups suggested a cross-walk to 84588, vasopressin (antidiuretic hormone, ADH). “We thought it should be gap-filled because although there are some similar analytes, they’re not used the same way clinically,” says Dr. Bauer.“Vasopressin is done in reference labs, while BNP is often a point-of-care test used in emergency rooms. We didn’t think that cross-walking it would reach an appropriate level of compensation.”

Two procedures for liquid-based, automated cytopathology, grouped under 8817X, had similar issues. ACLA recommended cross-walking these to higher percentages of an existing code, 88142, cytopathology, any reporting system. Again, the CAP and ASCP suggested gap-filling.

“A number of organizations came up with recommendations for a percentage increase from a certain code,”Dr. Bauer says, “but we couldn’t come up with any rational way to do that.” He says the combination of thin-layer technology and automated screening is new and shouldn’t be forced into a cross-walk.

“The whole process has changed with automated, thin-layer cytopathology,” Dr. Hilborne adds.“There was a difference of opinion as to how these could be related to the old codes.”In some cases, “you might be able to cross-walk to pieces of this and that,” but the ASCP considered gap-filling a better approach, he says.

Logue disagrees.“Assignment of inappropriate low pricing for automated cytopathology is quite possible if the codes are gap-filled,” she says.“If at all possible, the codes should be cross-walked because of the uncertainty of the gap-fill process. However, if a vendor is recommending cross-walking with a percentage increase, then comparative cost data should be submitted that supports the recommendation. If this is not possible, then gap-fill is probably the only other option.”

Glisson says ACLA’s recommendation for a percentage increase based on cross-walking“harked back to the way CMS had made the decision on thin-layer, nonautomated tests.”Manufacturers“don’t want to deal with a gap-fill,”she adds,“because it’s based on whatever the separate medical directors decide to do. Then you take an average of that and shoot out a number. It’s not the most scientific method.”

Finally, for code 8538X, fibrin degradation products, D-dimer; ultrasensitive, qualitative or semiquantitative, the CAP and ASCP objected to the descriptive language attached to the code.“We determined that the test described in CPT 2003 is the less common testing strategy for ultrasensitive D-dimer,”Dr. Hilborne says. There are really two different tests, he adds, the more common quantitative D-dimer (not described by the new code) and the qualitative one captured by 8538X.“We realized where the differences were, and the ASCP will submit a request for a second code for fibrin degradation products, D-dimer; ultrasensitive, quantitative this coming year,” he says.

The College planned to comment on CMS’ preliminary decisions through the CAP Professional and Economic Affairs Committee, chaired by Mark S. Synovec, MD, president of the Topeka (Kan.) Pathology Group. Although he did not attend the CMS meeting, Dr. Synovec says he got a full report from participants and staff who attended.

Regarding BNP and the cytopathology codes, he says,“We’ll have to wait until we hear the final word from CMS”before deciding whether to comment further. Even if the CAP disagrees with the rationale for establishing pricing, if the reimbursement is sufficient,“we’ll likely live with it,”Dr. Synovec says.“Why throw yourself on barbed wire and get involved in a political process to achieve the same goal?”

The ultrasensitive fibrin degradation code, 8538X,“will likely come back next year for re-evaluation,”Dr. Synovec says. Already it is scheduled to be reviewed by the CPT editorial panel in November. “Depending on the panel’s decisions, we very well may be discussing this again in 12 months,”he adds.

The CAP Professional and Economic Affairs Committee is also planning to review the 2000 pricing decisions to see if further comment is warranted. Of the decisions made in 2001, Dr. Synovec says, “We don’t have any serious disagreements with the decisions the CMS committee came up with last year.”

Karen Southwick is a writer in San Francisco.