College of American Pathologists
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  Press Release


Published on August 29, 2008

Contact: Jodi Greenblatt
Phone: (202) 354-7102

CAP Responds to Proposed Physician Fee Schedule

Washington, D.C.—The College of American Pathologists submitted comments to the Centers for Medicare and Medicaid Services today on the proposed Physician Fee Schedule for 2009, supporting CMS’s efforts to end financial incentives for ordering lab tests, while cautioning on Physician Quality Reporting Initiative public reporting until independent labs can participate.

In the proposed rule CMS-1403-P, “Medicare program; Revisions to Payment Policies Under the Physician Fee Schedule and other Revisions to Part B for CY 2009,” CMS offered two alternative approaches for revising the current anti-mark-up provision—which aims to limit the ability of an ordering practice to profit from laboratory tests.

The College strongly urged CMS to adopt the approach that applies the anti-markup provision to all technical component and professional component diagnostic tests that are ordered by the billing physician or other supplier unless the physician who performs and supervises the pathology services is dedicated solely to that physician organization.

The College urged CMS to except from application of the anti-markup provision single specialty pathology physician groups and independent laboratories, however, who generally do not order tests and utilize pathology/laboratory CPT codes for at least 75 percent of their billings. The CAP also asked CMS to exclude anatomic pathology from the in-office ancillary services exception to the physician self-referral regulations.

This method would both protect legitimate multi-specialty group practices that employ their pathologists on a full-time basis, while closing down the “in-office” loophole that allows for financially exploitative “Pod labs.”

The College applauded CMS for proposing substantive changes to the Reassignment Rule and the Physician Self-Referral Regulations to address a number of the existing abuses in the billing and payment for pathology services, and urged prompt action to finalize bright-line tests specifying the level of involvement in laboratory testing required before a referring practice can bill for lab tests that they order.

CMS also requested feedback on how PQRI data may be used by physicians, consumers, and other stakeholders in a public reporting system—the CAP believes, however, it is premature to report PQRI performance data in a public reporting system for reasons including the inability of independent laboratories to participate until at least 2010.

Pathologists employed by independent laboratories have been told by carriers that their computer systems cannot accept the necessary quality data from the labs required for reporting, a glitch which CMS reports was not a policy decision but an oversight—a problem the College is working with CMS to resolve.

As a result of the passage of Medicare legislation earlier this year, CMS will be required to implement in its final 2009 physician fee schedule rule the legislative fix that requires the budget neutrality adjustor be applied to the conversion factor rather than the Work RVUs.

In the comments, the College praised this change and urged CMS to also remove the Budget Neutrality adjustor from the work RVU indirect practice expense formula to ensure the intent of the law is carried out. CMS’s initial 2007 implementation, which was opposed by CAP and the American Medical Association, resulted in reduction in payment to pathologists—with the greatest impact faced by hospital based pathologists.

The complete comments are available on the CAP Website:

The College of American Pathologists (CAP) is a medical society serving about 17,000 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.