College of American Pathologists
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January 7, 2010  •  Volume 26, Number 1
Next Issue: January 21, 2010
© 2010 College of American Pathologists

In This Issue:

Congress Lets TC “Grandfather” Expire, If Only Temporarily
Healthcare Reform Update: Democrats Struggle to Agree
HHS Proposes Criteria for Electronic Health Record Incentive Program

Congress Lets TC “Grandfather” Expire, If Only Temporarily

Despite the College’s efforts to avoid disruption of payment for pathology services by successfully including an extension of the Medicare Technical Component “grandfather” in both the House and Senate Healthcare Reform bills, the TC “grandfather” provision has expired, leaving many pathologists wondering how to proceed given the likelihood the “grandfather” will be extended retroactively when healthcare legislation is signed into law later this year.

Anticipating Congress would not pass healthcare reform before the provision’s December 31, 2009 expiration date, CAP worked with members of Congress to request the Centers for Medicare and Medicaid Services (CMS) extend it “administratively”. This request was not granted. In a transmittal released late last week, CMS claimed as of January 1, it lost the statutory authority to make direct payments to independent laboratories for the TC of anatomical pathology services with dates of service on or after January 1, 2010.

Claims for service provided before January 1, 2010 are unaffected by the expiring provisions.

Earlier this week, a CMS official described two options open to affected pathologists: continue to submit claims (which may be reprocessed at a later date if/when new legislation extends the expiring provisions); or avoid reprocessing by holding onto claims for a period of time to see whether the legislation is enacted.

The CAP cannot recommend which action, if any, individual practices should take. Statline will continue to monitor this issue and report as more information becomes available.

Comment On This Article

Healthcare Reform Update: Democrats Struggle to Agree

Now that both houses of Congress have passed their versions of healthcare reform legislation, all eyes and ears are on Congressional Democrats who must reach a compromise on a number of divisive issues in order to get the legislation passed.

In addition to the high profile controversies, the House and Senate bills differ on two key issues specifically effecting pathologists:

Equal Treatment for All Labs

The Senate bill contains a provision that will allow a handful of laboratories to bill Medicare directly for some highly specialized diagnostic tests. Through CAP’s efforts, improvements have already been made to the provision, including limiting the program to be a $100 million, 2-year demonstration, and broadening the criteria to allow more laboratories to participate. However, the narrow definition of the types of molecular tests that can qualify ensures only a handful of commercial laboratories will be able to participate. The House bill contains no such provision. CAP continues to advocate for broadening the provision or having it removed.

Improve PQRI Program and Remove Penalties

The Senate bill also includes a troubling provision that would reduce payments to physicians who fail to participate in the Physicians Quality Reporting Initiative (PQRI) by 2015. Currently there are two pathology quality measures on which pathologists can report. CAP has been working to have several more pathology measures added, but challenges in the development and approval process have caused delays. CAP continues to work on adding measures and advocates for developing alternative methods for establishing quality.

Speedy Extension of TC Grandfather

As reported earlier in this issue, the TC “grandfather” provision also continues to concern pathologists. While both the House and Senate bills include provisions to extend the “grandfather”, ongoing delay in enacting legislation could cause significant disruption in payment to some pathologists.

The American Medical Association earlier this week identified the broader issues that would need to be reconciled between the two bills:

Public Plan

Senate: Multistate private plans sponsored by the federal Office of Personnel Management.
House: A national health insurance plan offered by the federal government.

Federal Taxation

Senate: 40% tax on so-called Cadillac health plans for individuals and families.
House: 5.4% tax on individuals with incomes exceeding$$500,000 and on families with incomes of more than $1 million.

Employeer Mandate

Senate: Larger employers not offering enough coverage would pay a $750 penalty per worker.
House: Larger employers not offering enough coverage would pay a tax of up to 8% of payroll.

Individual Mandate

Senate: Would require, starting in 2014, individuals to obtain health coverage or pay a phased-in annual penalty of at least $750
House: Would require, starting in 2013, individuals to obtain health coverage or pay an annual penalty of 2.5% of income higher than a certain amount.

Medicaid Expansion

Senate: Expand Medicaid to cover everyone earning up to 133% of the federal poverty level.
House: Expand Medicaid to cover everyone earning up to 150% of the federal poverty level.

Abortion Funding

Senate: Bar the use of federal subsidies to pay for abortion coverage but allow subsidy recipients to choose a plan covering abortion if it were paid for with segregated, private funds.
House: Bar the use of federal subsidies to pay for abortion coverage but allow women to purchase separate coverage with their own money.

Source: American Medical Association

In addition, and of continued concern to all physicians, is the unresolved issue of replacing the SGR formula for determining physician payment. If left unchanged, physicians face a 21.5% cut in 2010. Neither bill replaces this formula, although the House did pass separate legislation that would permanently repeal it. Congress has until the end of February to prevent the 21.5% pay cut from taking effect.

HHS Proposes Criteria for Electronic Health Record
Incentive Program

The government’s move to incentivize widespread use of Electronic Health Records (EHR) and interoperable Health Information Technology (HIT) throughout the medical community is moving forward with two regulations released for public comment by different offices in the U.S. Department of Health and Human Services at year’s end.

The two rules propose to define criteria and standards for incentive payments to physicians and hospitals funded through the American Recovery and Reinvestment Act (ARRA), which in part was enacted to spur widespread adoption of HIT. They are the first regs of a 3-phase implementation plan. Phase 1 of the incentive program, and related regulations, are scheduled to begin in 2011, with payments ending in 2015. Eligible providers who comply with all three phases of the program can receive the maximum total amount of incentive payments of $44,000.

One of the new regulations is a proposed rule defining “meaningful use” of electronic health records, issued by the Centers for Medicare and Medicaid Services (CMS). Once finalized this regulations would establish the criteria physicians and hospitals would have to meet to be eligible for the incentive payments. The proposed regulation currently on display will be officially published in the Federal Register on January 13, and will open for public comment for 60 days.

In the proposed regulation, CMS has identified a number of complex requirements healthcare providers would have to meet in order to establish their “meaningful use” of electronic health records and qualify for government incentives. Groups like the American Medical Association and American Hospital Association have begun to criticize the requirements as being overly complex and creating barriers that could discourage adoption by the medical community. CAP is currently reviewing the rule and will submit formal comments to CMS as part of the public comment process.

The second rule also released on December 30, 2009 and to be published on January 13, is an interim final rule drafted by the Office of the National Coordinator for Health Information Technology. The interim final regulation, which also provides a 60 day comment period, attempts to define the technical standards, implementation specifications, and certification criteria for Electronic Health Record Technology. In order for professionals and hospitals to be eligible to receive the incentive payments they must be able to demonstrate meaningful use of a certified EHR system that meets the requirements of both regulations, since the standards and certification criteria in this rule are fundamentally linked to and specifically designed to support the first phase of implementing the meaningful use criteria. CAP is also reviewing details of the rule and will submit formal comments to ONC as part of the public comment process.

Statline will continue to closely monitor and report on this important emerging issue.


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