College of American Pathologists
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November 18, 2011
© 2011 College of American Pathologists
Special Report

In This Issue:

Cantor Predicts SGR Fix, No Shortage of Ideas
CAP Advocacy Keeps the Pressure On as the Clock Winds Down
Super Committee Stalemates on Taxes and Entitlements
Highlights From the AMA Interim Meeting

Cantor Predicts SGR Fix, No Shortage of Ideas

November 18—House Majority Leader Eric Cantor’s (R-VA) prediction to reporters this week that the House will attempt to reform the Medicare Sustainable Growth Rate (SGR) formula this year, regardless of what happens in the Joint Select Committee on Deficit Reduction, aka the Super Committee, is welcome news. Or is it?

Everyone agrees that a fix is needed, the sooner the better, but the cost of a fix is at least $300 billion, and no leading proposal has emerged to indicate how Congress will finally address the issue. With the current patch set to expire on December 31, 2011, Congress must act quickly in order to avoid the 27.4% Medicare physician pay cut mandated for 2012. The question is what will Congress do?

Among the proposals circulating in Washington this week is the MedPAC proposal from October 6, which CAP and most physician groups oppose, as previously reported in Statline. There is another proposal, The Medicare Physician Payment Innovation Act, introduced in the House of Representatives by Congresswoman Allyson Schwartz (D-PA). Some primary care physician groups have shown support for this proposal.

Medicare Patient Advisory Committee (MedPAC) Proposal

Introduced this fall, the Medicare Payment Advisory Commission’s (MedPAC) 10-year proposal called for replacing the SGR with 5.9% payment reductions to specialty physicians in each of the first three years, totaling nearly 18% in cuts, followed by a freeze in payment rates for the remaining seven years. Medicare payment rates for primary care physicians would be frozen for 10 years. In addition, MedPAC offered a list of offset options, should Congress decide to offset the costs of the SGR repeal. This list includes reducing clinical laboratory service payments for 10 years, which is estimated to yield $21 billion in savings.

The CAP, AMA, and other physician groups do not support this approach. In a letter to MedPAC on Oct. 3, the College and 41 other physician groups wrote, “In view of the very significant payment constraints that physicians have already absorbed over the past decade, however, we respectfully disagree with the suggestion that SGR repeal should be funded in large part by cuts in payments to physicians.”.

The CAP also recently joined the AMA and other physician groups in a letter to Joint Select Committee on Deficit Reduction Co-Chair Sen. Patty Murray (D-WA), urging for SGR repeal in the group’s final legislation. “As the Committee begins its deliberations, it is important to note that the current budget baseline assumes that massive physician payment cuts will be implemented,” stated the letter. “In fact, Members of Congress from both sides of the aisle have stated that the current law baseline does not reflect the policies that Congress has operated by in recent years. Any effort to stabilize our nation’s finances must be based on a true assessment of future expenditures.”

Schwartz Proposal

Reps. Allyson Schwartz (D-PA) and Phil Roe (R-TN) sent the Super Committee a six-year proposal in October to repeal the SGR and further increase pay for primary care physicians. The plan calls for stable payments in the first year, followed by a five-year transition period with a 2.5% increase for primary care and a 0.5% increase for specialties in subsequent years. By 2015, CMS would be required to issue at least four new payment models to replace the old formula. Physicians would be able to choose a new model or stick with the existing fee-for-service model, with disincentives starting in 2017.

“For years, the cost of this failed policy has been hidden by short-term fixes,” Schwartz said. “There is overwhelming bipartisan support, coupled with tremendous fiscal urgency, to finally enact a long-term SGR fix.”

The proposal is supported by 113 House members, and by the American College of Physicians, American Osteopathic Association, American Academy of Family Physicians, American College of Obstetricians and Gynecologists, the Society of Hospital Medicine, and the Association of American Medical Colleges, and the American Geriatrics Society. As of press time, the American Medical Association had not weighed in on the proposal.

Another option has Congress again postponing a long-term SGR fix, and passing a short-term patch as it has done a dozen times since 2001. One possibility circulating on the Hill this week calls for a two-year fix

Do Your Part

While Congress continues to weigh these and possibly other proposals, the AMA is encouraging physicians to send your message to Congress about the need to repeal the SGR. Visit the AMA’s Physicians’ Grassroots Network. Or call the AMA’s toll-free grassroots hotline at (800) 833-6354.

Also, view the AMA’s Medicare Physician Payment Action Kit and learn more what's at stake and state-specific impacts of the 27.4% cut.

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CAP Advocacy Keeps the Pressure On as the Clock Winds Down

The College is keeping the pressure on Congress, with CAP fellows from Tennessee and California meeting with members of Congress on fixing the SGR, and addressing rural health issues, including the Technical Component (TC) “grandfather” provision.

Ben Davis MD, FCAP, with Rep. Phil Roe (R-TN). CAP members Ben Davis, MD, FCAP, and Julia Mooney, MD, FCAP, met with nearly a dozen members of Congress and staffers this week to discuss how the Medicare TC grandfather provision impacts community hospitals and patients in their districts.

Dr. Mooney’s practice, Shasta Pathology Associates in Redding, CA, employs seven pathologists and serves six small community hospitals. Most of these hospitals rely on the TC-grandfather to pay for laboratory services.

Julia Mooney MD, FCAP with Rep. Tom Price, MD (R-GA). “We couldn’t afford to provide all the services we provide to these rural hospitals without technical component billing,” Dr. Mooney said. “If the TC grandfather were to end, some of those hospitals would not be able to offer anatomic laboratory services to the surgical team, which would impact our ability to provide clinical lab services to the emergency room. What kind of hospital would that be without surgical or emergency room services?”

Dr. Mooney with Rep. Wally Herger (R-CA). Dr. Mooney met with Rep. Wally Herger (R-CA), Chairman of the House Ways and Means Health Subcommittee; and the staff from Sen. Dianne Feinstein’s (D-CA) office. Sen. Feinstein is a member of the Senate Appropriations Committee. Dr. Mooney also met with staff from the offices of Rep. Mike Thompson (D-CA), a member of the House Ways and Means Health Subcommittee.

Dr. Davis’s practice, PathGroup in Brentwood, Tenn., employs 64 pathologists and serves over 70 urban, suburban, and rural hospitals, more than half rely on the TC Grandfather.

“The TC Grandfather is directly tied to patient access to care, and the ability of hospitals and physician practices to offer all patients the same level of care,” Davis said. “I would urge my fellow pathologists not to be complacent about the TC-grandfather extension in this budget cutting environment on Capitol Hill. Do not underestimate the impact your personal contact has on policy makers who represent you and your patients,” Davis said.

Dr. Davis with Rep. Marsha Blackburn (R-TN). Dr. Davis met with Rep. Marsha Blackburn (R-TN), a member of the House Energy and Commerce Committee, and Rep. Phil Roe, MD, (R-TN), a member of the House Education and the Workforce Committee, and chair of Subcommittee on Health, Employment, Labor, and Pensions. He also met with staffers from the Senate Finance Committee and other Hill staff and legislative aides.

Since October, the CAP fall “fly-in” campaign has brought 25 CAP members to Washington, D.C., to participate in meetings with dozens of lawmakers and Hill staff including 10 Super Committee members.

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Super Committee Stalemates on Taxes and Entitlements

Partisan differences continued to derail congressional Super Committee negotiations this week, raising doubts it would produce a plan to trim at least $1.2 trillion from the federal deficit by the November 23 deadline. The 12-member Congressional “Joint Select Committee on Deficit Reduction” will continue to meet over the weekend in hopes of resolving differences on two key issues, tax reform and entitlement reform.

All parties agree reforms are needed, but panel members from both parties have put forward very different proposals. The Democrats’ plan released this week identified $2 trillion in savings, targeting $1 trillion in spending changes, including total cuts of $350 billion to Medicare, with $250 billion coming from providers; plus another $50 billion in savings from Medicaid and other health programs. It also proposed fixing the Medicare physician payment system’s sustainable growth rate (SGR) formula with funds from the overseas contingency operations (OCO) budget. The proposal also included $1 trillion in tax/revenue changes that would allow the Bush-era tax cuts to expire, but leave the top individual income tax rate at 35%. Under the Democrats’ plan no entitlement cuts could go into effect before tax reforms are enacted.

Republicans argue the proposal fails to deal with the structural crisis that has resulted from entitlement costs.

The Republican plan, released by Sen. Pat Toomey (R-PA) and endorsed by the GOP last week, identified $1.2 trillion in savings. It would make the Bush-era tax cuts permanent, and raise $290 billion over the next 10 years by limiting itemized income tax deductions to 2% of income, while lowering the overall tax rate for families at every income level. The top rate would fall from 35% to 28%, and the lowest rate drop from 10% to 8%.

The GOP proposal would also cut spending by about $700 billion, including cuts to Social Security, Medicare and Medicaid operating budgets, lower cost of living increases for Social Security beneficiaries, and increasing Medicare premiums

Democrats argue that such big reductions in tax rates would result in large tax cuts for the rich, which would be paid for by eliminating tax breaks that primarily benefit the middle class.

Looking Ahead

If the Super Committee presents a package to Congress by November 23, each chamber will consider it in an up-or-down vote, with no amendments or filibusters, and only simple majorities required for approval by Dec. 23. If legislation is not enacted, then sequestration will be triggered on Jan. 15, 2012 to go into effect in 2013. Under the sequestration scenario, Medicaid, SCHIP, Social Security and veterans’ payments would be exempted, but Medicare would be cut by 2%.

As Super Committee members continue their work, they are also exploring ways of extending the process into December. Under one such plan, the Super Committee would set a dollar amount for entitlement cuts and tax-code reform, but leave it to the standing House and Senate committees to draft and put forward legislation, which is the normal process a bill follows to become a law.

Statline will continue to report on Super Committee’s progress. Due to the Thanksgiving holiday, Statline will be published next week on Wednesday, November 23.

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Highlights From the AMA Interim Meeting

The House of Delegates of the American Medical Association held its Interim meeting last week, with representatives from CAP and other pathology medical groups participating in policy setting on a range of topics. The issues with the most potential impact on pathology include:

Development of Standardized Laboratory Results Reporting – Referred

AMA Delegates Meeting. The AMA House of Delegates voted to refer a resolution from the Indiana delegation that would have AMA produce a single standardized format for presentation of laboratory results; improve the terminology used in radiology reports, and recommend to the federal government that it set future standards for all electronic health/medical records, with an option for physicians to choose a standardized set of menus and medical information regardless of vendor. The CAP opposed this resolution as written. The Pathology Section Council, with representatives from CAP, NAME, USCAP, ASCP, and ASC believes it is premature to require a single standard, particularly for anatomic pathology, but clinical pathology as well, on the grounds that laboratory data can be extraordinarily complex, and there are various types of data and various methods of displaying lab data, as well as a variety of ways to contextualize the data. The committee felt that as a result of these complexities, lab data requires a great degree of freedom in its creation, transmission, storage, display and use, and that it is premature to mandate a single format.

Stop the Implementation of ICD-10

The AMA House of Delegates voted to work vigorously to stop implementation of ICD-10 code set for medical diagnoses. ICD-10 has about 69,000 codes and will replace the 14,000 ICD-9 diagnosis codes currently in use.

̴The implementation of ICD-10 will create significant burdens on the practice of medicine with no direct benefit to individual patients’ care,” said Peter W. Carmel, M.D., AMA president. At a time when we are working to get the best value possible for our health care dollar, this massive and expensive undertaking will add administrative expense and create unnecessary workflow disruptions. The timing could not be worse as many physicians are working to implement electronic health records into their practices. We will continue working to help physicians keep their focus where it should be—on their patients.”

Increase Patient Support for Medicare Patient Empowerment

The AMA House of Delegates voted to sponsor a grassroots campaign to gain patients’ support for Medicare to allow “private contracting”, that would pay Medicare benefits to patients who choose to see physicians who do not accept Medicare. Currently, patients have to pay for the entire visit out of their pocket if their physician does not accept Medicare.

The AMA has long sought to allow physicians to engage in private contracting with Medicare patients, and supports legislation sponsored by Rep. Tom Price, MD (R-Ga.) that would allow private contracting. The Medicare Patient Empowerment Act (H.R. 1700) was introduced in May; a companion bill was introduced in the Senate the same month by Lisa Murkowski (R-Alaska).

Pathology Delegates to the AMA 2011 Interim Meeting

Rebecca L. Johnson, MD (CAP), Chair
Edmund R. Donoghue, Jr. MD (ASCP), Vice Chair
William V. Harrer, MD (CAP)
Nicole D. Riddle, MD (CAP Delegate from the RFS)
Jack P. Strong, MD (USCAP)
Mark S. Synovec, MD (CAP)
W. Stephen Black-Schaffer, MD (ASC)

Alternate Delegates
James L. Caruso, MD (CAP)
Jean E. Forsberg, MD (CAP)
Fred H. Rodriguez, MD (ASCP)
Bruce R. Smoller, MD (USCAP)
Susan M. Strate, MD (CAP)

AMA Resident and Fellow Section
Sara C. Acree, MD (ASCP Delegate)
Christopher H. Cogbill, MD, (ASCP Alternate)
Xiaoyin Sara Jiang, MD, (CAP Alternate)
Lauren C. Scott, MD, (CAP Delegate)
Phillip Stephenson, DO, (CAP Alternate)
Crystal J. Trujillo, MD, (CAP Delegate)
Andrew Turk, MD, (CAP Delegate)
Daniel B. Wimmer, DO, (CAP Alternate)

AMA Young Physicians Section
Daniel C. Zedek, MD, (CAP Delegate)

Leadership Representatives/Staff
Stanley J. Robboy, MD, FCAP, CAP President
Gene N. Herbek MD, FCAP, CAP President-elect
C. Bruce Alexander, MD, FASCP, ASCP President
E. Blair Holladay, PhD, SCT(ASCP)CMASCP, EVP
John Scott (CAP)
Jeff Jacobs (ASCP)
Katherine Dolan (CAP)
Pamela Johnson (CAP)
Melissa Stegun (CAP)

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