Published on September 7, 2006
U.S. House Introduces Legislation to Permanently Grant TC Grandfather
Washington, D.C.—The U.S. House of Representatives’ Rural Health Care Coalition today introduced legislation that would strengthen rural health care and ensure that rural hospitals can continue to rely on independent laboratories to provide surgical pathology services to patients without disruption and increased costs, according to the College of American Pathologists (CAP). The Health Care Access and Rural Equity (H-CARE) Act of 2006 addresses many critical health care issues facing rural communities, including allowing independent laboratories to continue to receive payment from Medicare for the technical component (TC) of pathology services provided to hospital inpatients and outpatients.
“We applaud Representatives Greg Walden (R-OR) and Earl Pomeroy (D-ND) and members of the Coalition for introducing this important legislation that would provide the stability independent laboratories and hospitals need to maintain services vital to Medicare beneficiaries,” said Thomas M. Sodeman, MD, FCAP, and president of CAP. “Without this legislation, independent laboratories will have to seek payment from already cash-strapped hospitals that would receive no new funds from Medicare to pay for these medical services. The burden will fall especially hard on small and rural hospitals, which typically cannot afford in-house pathology services and rely heavily on independent labs.”
The legislation would make permanent the current TC “grandfather,” which is scheduled to expire at the end of 2006. In 1999, CMS issued a final notice that Medicare would no longer pay independent laboratories for the TC of pathology services provided to hospital inpatients and outpatients. The “grandfather” exemption applies to services delivered to any hospital that used an independent laboratory for TC services as of July 22, 1999, which is the date CMS proposed eliminating this payment arrangement.
To date, this payment change has not been fully implemented because Congress has enacted a series of College-supported “grandfather” exemptions. Most recently, in 2003, under the Medicare Modernization Act, Congress provided a “grandfather” through 2006. However, without further congressional action, this protection will expire at year’s end, and independent laboratories will be forced to seek payment from the hospitals.
Because the “grandfather” applies to the hospital, any laboratory contracting with a “grandfathered” hospital would be able to bill and receive payment directly from Medicare for both the professional component (PC) and TC, regardless of whether they had a previous arrangement with the hospital.
Similar legislation, the Physician Pathology Services Continuity Act of 2006 (S. 3609), was introduced in the U.S. Senate earlier this summer by Senators Blanche Lincoln (D-AR) and Craig Thomas (R-WY), with additional support from Senators Jim Bunning (R-KY), Kent Conrad (D-ND), Mark Pryor (D-AR) and Mary Landrieu (D-LA).
The College of American Pathologists (CAP) is a medical society serving about 16,000 physician members and the laboratory community throughout the world. It is the world’s largest association composed exclusively of pathologists and is widely considered the leader in laboratory quality assurance. The CAP is an advocate for high quality and cost-effective patient care.