College of American Pathologists
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November 4, 2011
© 2011 College of American Pathologists
Special Report

In This Issue:

CAP Leaders Lobby Congress on SGR, Self-Referral, TC Grandfather
CMS Issues Final Physician Fee Schedule Featuring New CAP-Developed PQRS Measures

CAP Leaders Lobby Congress on SGR, Self-Referral, TC Grandfather

November 4—With recommendations from the Joint Committee on Deficit Reduction—commonly referred to as the “Super Committee”—on trimming at least $1.2 trillion in savings due to Congress in less than one month, CAP leaders traveled to Washington, DC, this week to meet with top lawmakers—including Super Committee members John Kerry’s (D-MA) and Dave Camp’s (R-MI) offices. CAP members discussed key advocacy priorities, including removing anatomic pathology (AP) from the in-office ancillary services (IOAS) exception to the Stark Law, extending the TC “grandfather” provision, as well as the impending Medicare physician payment cut under the sustainable growth rate (SGR). This cut is now 27.4%, according to the final Medicare Physician Fee Schedule (PFS) released this week.

CAP President-Elect Gene Herbek, MD, FCAP, met with Rep. Lee Terry (R-NE) this week. This week, 11 members participated in nearly two dozen meetings (10 House and 12 Senate meetings). CAP’s President-Elect Gene Herbek, MD, FCAP, met with Nebraska lawmakers regarding self-referral and extending the TC Grandfather provision, including Rep. Lee Terry (R-NE) and Sens. Mike Johanns (R-NE) and Ben Nelson (D-NE), who serves on the Appropriations Committee.

In addition to meeting with members of Congress on key committees, the College has been focusing its lobbying efforts on the 12 members of the Super Committee who are charged with crafting a proposal by Nov. 23 to save between $1.2 trillion and $1.5 trillion. Congress then has to vote on the recommended savings by the end of December.

Super Committee Meetings

CAP members Drs. Amaker, Gang, Friedberg, and Misialek, visit with Rep. John Barrow (D-GA). Since early October, 22 CAP members have traveled to Washington, D.C., to participate in at least 60 House and Senate meetings. Specifically, the College has been talking with members of the Super Committee and other members of Congress about how closing the IOAS loophole can contribute to their savings goal while curbing overutilization of health care services. While lawmakers appear interested in the potential savings, CAP members visiting the Hill continue to encounter hesitation from members of Congress to move forward, as the issue is complex and there is considerable opposition by physician specialties engaged in these arrangements.

This week’s meetings on self-referral included a discussion with Super Committee member Sen. John Kerry’s (D-MA) office and CAP members Richard Friedberg, MD, FCAP, David Gang, MD, FCAP, and Michael Misialek, MD, FCAP. CAP members William Springstead, MD, FCAP, and James Richard, DO, FCAP, also met with staff from another Super Committee member, Rep. Dave Camp, on extending the TC Grandfather provision. Rep. Camp is Chair of the House Ways and Means Committee.

CAP members Drs, Friedberg, Gang, and Misialek, met with Rep. Richard Neal (D-MA). “In our meeting with Sen. Kerry’s staff, we emphasized that while health care reform is moving in the right direction, there is still excess spending out there,” explained Dr. Friedberg, who is the Chair of CAP’s Council on Government and Public Affairs. He is also the Chair, Department of Pathology, Baystate Health; Medical Director, Baystate Reference Laboratories, located in Springfield, Mass.

In addition to this meeting with Sen. Kerry’s staff, Drs. Friedberg, Gang, and Misialek also met with Massachusetts Sen. Scott Brown (R-MA) and Rep. Richard Neal (D-MA), who is on the House Ways and Means Committee. Throughout all of these meetings, the lawmakers and staff appeared to understand the issue and how these self-referral business arrangements are driving up overutilization of testing. “We emphasized the distinction between performing routine clinical laboratory tests in-office and allowing the IOAS exception to apply to anatomic pathology services, which cannot be performed the same day of the patient visit,” said Dr. Friedberg. “We also discussed how this was essentially fragmenting health care.”

Urgent Advocacy Concerns

Dr. Herbek discussed the TC Grandfather provision with Sen. Johanns (R-NE). The College is also continuing its focus on two advocacy priorities: extending the Medicare “TC-grandfather” provision and fixing the current Medicare physician payment formula under the sustainable growth rate (SGR). The College is supporting the AMA’s ongoing advocacy efforts to permanently repeal this flawed payment formula.

Both these issues were addressed in the final Medicare Physician Fee Schedule (PFS), released this week on Nov. 1 (for more information, see article on the PFS in this Statline Alert). In the final PFS, CMS decreased the SGR payment cut a bit—from 29.5% to 27.4%.

As for the TC grandfather provision, CMS did what it has done in recent years, which is propose ending this provision allowing independent laboratories to bill Medicare for the technical component (TC) of surgical pathology services for hospital patients.

However, without additional legislation, this provision will expire on Dec. 31, 2011, which will deeply impact rural hospitals, noted Dr. Herbek in his meetings with Sens. Nelson and Johanns.

“Not extending this provision will severely affect health systems like my institution, which serves 12 area hospitals in Iowa and Missouri, as well as Nebraska,” he explained to Statline. “These hospitals that we serve—as well as physician clinics—are too small to have a pathologist on staff. Without this provision, costs for these hospitals will significantly increase.”

CAP member James Richard, DO, FCAP, talks with Rep. Phil Gingrey, MD (R-GA) this week. To address this issue, Dr. Herbek urged Sens. Nelson and Johanns to support pending legislation permanently extending this provision, as the College has long advocated. The bill, H.R. 2461, the Physician Pathology Services Continuity Act of 2011, was introduced this summer by Representatives Geoff Davis (R-KY) and Mike Ross (D-AK). Last week, the legislation picked up three new co-sponsors—Reps. Vern Buchanan (R-FL), Tim Griffin (R-AR) and Rick Crawford (R-AK). Rep. Buchanan is on the House Ways and Means Health Subcommittee.

CAP Members on the Hill, Week of Nov. 1

  •  President-Elect Gene Herbek
      MD, FCAP (NE)
  •  Richard Friedberg, MD, FCAP (MA)
  •  David Gang, MD, FCAP (MA)
  •  Michael Misialek, MD, FCAP (MA)
  •  William Springstead, MD, FCAP (MI)
  •  James Richard, DO, FCAP (MI)
  •  Barbara Amaker, MD, FCAP (VA)
  •  Michael Deck, MD, FCAP (TX)
  •  Phillip Finley MD, FCAP (SC)
  •  Stylianos Lomvardias
      MD, FCAP (NY)
  •  William Poston, MD, FCAP (NC)
  •  William Springstead, MD, FCAP (MI)

Also working to drum up support for this bill were CAP members Drs. Springstead and Richard in their meeting with the staff from Rep. Camp’s office this week. “Dr. Springstead and I discussed with the Congressman how important this provision is to small rural hospitals, many of which are already struggling financially,” Dr. Richard said. “I emphasized to him that a permanent fix is what is really needed to address this issue.”

CAP members are urged to visit the PathNET Legislative Action Center to sign up for the Self-Referral Action List and find out more about the current Grassroots Fly-In, when CAP members travel to Washington, DC, to meet with their Members of Congress on this issue.

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CMS Issues Final Physician Fee Schedule Featuring New CAP-Developed PQRS Measures

The recently released CMS 2012 final Medicare Physician Fee Schedule (PFS) includes three new CAP-developed pathology measures for the agency’s Physician Quality Reporting System (PQRS), bringing the total number of pathology-related measures up to five. CAP successfully challenged CMS’s prior decision related to payment of fine needle aspirate code values, leading the agency to reverse a previous determination in the final PFS rule released on Nov. 1. In addition, CMS reversed its proposal and accepted CAP’s comments that the professional component (PC) of anatomic pathology code 88305 does not need revalued. However, CMS did maintain that the technical component (TC) of this code needs more scrutiny.

Also, CMS approved CAP-developed special stain values, which were identified for review as potentially overvalued. CMS also officially retracted the proposed signature rule policy. The College had been leading opposition to this policy change since it was initially proposed last year. According to the final PFS, the agency is reinstating its prior policy that the signature of the physician or NPP is not required on a requisition for a clinical diagnostic laboratory test paid under the Clinical Laboratory Fee Schedule (CLFS) for Medicare purposes.

SGR, TC Details

Of course, the final PFS does include some issues of concern for pathologists, including a 27.4% across-the board physician pay cut resulting from the flawed Sustainable Growth Rate (SGR) formula.

Also, as anticipated, the final rule calls for the sunset of the technical component (TC) Grandfather provision on December 31, 2011. Unless Congress acts to extend the TC-Grandfather as it has done in the past, independent laboratories may not bill Medicare for the TC of physician pathology services for Medicare beneficiaries who are inpatients or outpatients of a covered hospital. The CAP continues to advocate for extension of the TC-Grandfather provision because it ensures the delivery of necessary laboratory services in largely rural areas.

As in years past, the CAP is advocating with the AMA and other physician groups to permanently replace the SGR. This fall, CAP is sponsoring fly-ins each week for pathologists to lobby Congress on SGR repeal and other issues important to the specialty such as extension of the TC-Grandfather (see related article in this Statline alert).

Additional Information

Below are some additional details, including some background information on these elements of the final 2012 PFS:

Fine Needle Aspirate Code Values – In February 2010, the CPT Editorial Panel approved CAP’s recommended revision to CPT code 88172 and created a new code, CPT code 88177 Cytopathology, evaluation of fine needle aspirate; immediate cytohistologic study to determine adequacy for diagnosis, each separate additional evaluation episode, same site), to report the first evaluation episode and each additional episode of cytopathology evaluation of fine needle aspirate. Subsequently, CAP made physician work and practice expense recommendations to the RUC for both 88172 and 88177 which were forwarded to CMS for CY 2011 implementation. CMS rejected the CAP developed and RUC approved value of 0.69 work RVUs for 88172 and implemented a value of 0.60 in 2011. CAP challenged this decision in its comments on the 2011 final physician fee schedule rule and subsequently testified before a CMS refinement panel defending the RUC approved value for this code. As a result, CMS has assigned a work RVU of 0.69 to CPT code 88172 as a final value.

PQRS – The three new pathology related measures developed by the CAP are Radical Prostatectomy Pathology Reporting, Immunohistochemical (IHC) Evaluation of HER2 for Breast Cancer Patients, and Barrett’s Esophagus. CAP has repeatedly expressed concern about how CMS will handle penalties for eligible physicians who do not have applicable measures in the 2013 PQRS. However, the 2012 rule did not address these concerns.

Anatomic Pathology (88305) – In its proposed rule, CMS asked for the review of both the direct practice expense (PE) inputs and the work RVUs of 88305, based on a stakeholder claim that the typical cost of 88305’s technical component (TC) is $18, whereas current reimbursement is $69.95. In the final rule, CMS noted the RUC’s review of the physician work component in April 2010, removing the need to revisit the physician work RVU. However, CMS continues to require review of the direct practice expense inputs which are used to calculate the TC.

Molecular Pathology – The CAP developed physician work RVU recommendations, as well as PE direct inputs for medical supplies, equipment and clinical staff for approximately 100 new codes, the majority of the new molecular CPT codes developed by the American Medical Association (AMA) CPT Molecular Pathology Workgroup.

However, CMS did not include these new CPT codes in the 2012 PFS, therefore they will not be valid for Medicare purposes for CY 2012. For CY 2012, Medicare will continue to require the current "stacking" codes for the reporting and payment for molecular pathology services. CAP will continue to advocate for CMS’ acceptance of the RUC recommendations and the use of these new CPT codes. CAP continues to work to secure proper Medicare reimbursement for the new molecular pathology codes on the physician fee schedule.

Misvalued Code Initiative, Specific Codes for Review – CMS did identify certain pathology services that represent high Medicare expenditures under the PFS as potentially misvalued and proposed the AMA RUC to review the codes.

These are; 88342 Immunohistochemistry, 88112 Cytopath, Cell Enhance Tech, 88312 Special Stains Group 1 (recently reviewed, see below), as well as In Situ Hybridization (88365, 88367 & 88368). CAP will be working through the RUC Advisory Committee in its role representing pathology as the RUC takes action on these requests.

For the special stain codes, however, CAP submitted a CPT coding proposal to revise the current descriptors of these services to clarify the appropriate use of these codes, and developed RVUs recommending retaining the work RVUs associated with these services. CMS agreed with the CAP developed RUC recommendations for work and practice expense for the special stains codes in the 2012 final rule.

For the in situ codes, CMS has requested review of the physician work and practice expense for all three codes. In addition, CMS is maintaining RVUs of 1.20 for CPT code 88120 and 1.00 for CPT code 88121 on an interim final basis for CY 2012.

The final rule with comment period will appear in the Nov. 28 Federal Register. CMS will accept comments on the provisions that are subject to comment until December 31, 2011.

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