College of American Pathologists
Printable Version

  STATLINE — CAP’s Bi–Weekly Federal and
  State Advocacy E–Newsletter

January 19, 2012  •  Volume 28, Number 2
Next Issue: February 2, 2012
© 2012 College of American Pathologists

In This Issue:

SGR Tops the Agenda as Congress Reconvenes
Rep. David Price (D-NC) Discovers Cutting-Edge Pathology at Duke University Medical Center
CAP asks CMS to Delay or Revoke Palmetto’s MolDx
Pennsylvania Genetic Counselor Law Preserves Physician’s Diagnostic Role
CAP Urges CMS to Reconsider PQRS Penalties
First CMS Innovation Advisors Chosen
2012 Physician Quality Reporting System Educational Products from CMS

SGR Tops the Agenda as Congress Reconvenes

Late last year, both houses of Congress passed H.R. 3765, The Temporary Payroll Tax Cut Continuation Act of 2011, which extended 2011 Medicare physician pay rates, as well as the TC “Grandfather” provision and other Medicare provisions, through February 2012, and afforded Congress more time to work out a compromise on these and other key programs in the legislation, particularly the payroll tax holiday enacted in 2011. In passing that legislation, leaders from both chambers agreed to form a Congressional conference committee to work out the policy differences that prevented the two sides from reaching a long term agreement. The first meeting of the conference committee is scheduled for January 24, 2012.

Fixing the Sustainable Growth Rate (SGR) formula for Medicare physician payment appeared at the top of the agenda as Congress returned from its holiday recess this week. With more than one week before the Congressional conference committee meets to discuss the issue, both sides have already begun framing the debate on how to fix the SGR, and how to pay for it.

Hoping to avoid the public relations problems House Republicans brought on themselves at the end of last year by delaying passage of the bill, Politico and other hill newspapers are reporting keen Republican interest in quickly passing a short term patch, even if it just a 10-month patch. According to Politico,

“In recent days, GOP aides have been pushing the House’s yearlong extension, which passed along a mostly party-line 234-193 vote, as a starting point in the new round of talks. The legislation calls for provisions which previously have enjoyed White House support: increasing Medicare premiums for affluent Americans, spectrum auctions to boost high-speed Internet services, and extending Obama’s pay freeze for federal workers through 2013, though the president said he’ll propose a slight 0.5 percent increase in federal pay in his new budget.”

Democrats, who last year fought for the two month extension, now appear to be starting negotiations with a permanent fix in mind, paid for with savings from the Oversees Contingency Operations (OCO) fund. The OCO fund refers to the discretionary funds allocated for the wars in Afghanistan and Iraq, and similar activities, which are expected to be far less costly than budgeted.

Many Republican lawmakers have opposed using the OCO fund to offset the SGR fix. However, Rep. Xavier Becerra (D-CA), one of 20 lawmakers appointed to a joint House-Senate payroll tax conference panel, said that Democrats would open negotiations asking for a full—and fully paid for—solution to the “doc fix” problem.

The cost of permanently fixing the SGR is nearly $300 billion today, and the American Medical Association estimates a fix could cost as much as $600 billion in five years if left unchecked. The AMA supports applying the OCO surplus to offset the cost of the SGR fix. In a letter already on its way to Congress from the AMA and other medical societies including CAP, AMA wrote, “Using the OCO baseline as an offset for the SGR baseline essentially amounts to ‘cleaning up the books’ by eliminating bad fiscal policies and allowing for a more accurate accounting of future government expenditures without increasing the deficit.

CAP continues to advocate for a permanent SGR fix, and for extending the TC “Grandfather” provision.

Rep. David Price (D-NC) Discovers Cutting-Edge Pathology at Duke University Medical Center

Robboy-Price Lab TourCAP President Stanley Robboy, MD, FCAP, Pathology Chairman Salvatore Pizzo, MD, PhD, FCAP, and others at the Duke University Medical Center hosted Representative David Price (D-NC) on a tour of Duke University Health System’s core laboratory earlier this month. The tour focused on the important role that pathologists have in health care, and included a demonstration of how pathologists use cutting-edge technology and laboratory tests to screen for cancer and precancerous lesions. During the tour, Rep. Price discussed the growth of personalized health care and the need to preserve the important role pathologists can have as diagnostic consultants for patient care.

“It was impressive to witness the scope of diagnostic tests conducted on a daily basis at Duke University,” Rep. Price said following the tour. “Our Fourth District health care facilities are world class, and they host professionals who remain on the forefront of medical research and innovation.”

Price Meeting “We were honored that Representative Price took time out of his busy schedule to visit our laboratory to see firsthand the role pathologists have in today’s medicine,” said Dr. Robboy, who is also vice chairman for diagnostic services at the Medical Center. “The tour demonstrated how laboratory services are a vital component of patient care from diagnosis to treatment, as well as the benefits of having the laboratory integral to the hospital, with close access to physicians, nurses and administrators.”

In addition to Drs. Robboy and Pizzo, the tour was attended by Duke University Hospital’s President, Kevin Sower; Director of Clinical Pathology Laboratories, Dr. Bruce Lobaugh; Chief of Surgical Pathology, Dr. Roger McLendon; and Mr. Arthur Glasgow, Duke University Health System Chief Information Officer.

The clinical core pathology facilities of the Duke University Health System staffs about 65 full-time pathologists and doctoral level scientists and other 740 personnel who are involved in processing approximately 6.7 million clinical lab tests and over 110,000 surgical and cytology pathology cases annually.

CAP asks CMS to Delay or Revoke Palmetto’s MolDx

Representatives from the College met with the Centers for Medicare and Medicaid Services (CMS) last week to express the CAP’s concerns regarding the Molecular Diagnostics (MolDx) reporting program announced by Palmetto GBA in November 2011, and asked CMS to delay or revoke the program.

Last November, Palmetto GBA, the program administrator for Medicare in Jurisdictions 1 and 11, informed providers that beginning on March 5, 2012, all claims for molecular tests in Jurisdiction 1, (encompassing California, Hawaii, and Nevada), must include a unique “Z-Code” in order to be paid. Palmetto GBA said it will use the Z-Codes to “identify the billed test, determine reasonable and necessary services, and apply appropriate reimbursement.”

The Z-codes are generated and managed using the McKesson Diagnostics Exchange, a proprietary system developed and owned by McKesson Corporation. Since each test must have a unique Z-Code, providers are required to apply for and attain a Z-code for each test from McKesson.

As of March 5, 2012, Palmetto said it will reject any claim for an affected test submitted without a Z-Code. A rejected claim would not be accepted for adjudication unless the lab submits the test to McKesson for review and a Z-Code was assigned to the test by March 1, 2012.

Before new codes were developed for 2012, labs used molecular diagnostic “stacking” codes for their component procedures when billing CMS. One problem with this approach is that not all labs use the same component procedures, so Medicare potentially paid different amounts for essentially the same test.

But Palmetto’s adoption of the Z-codes amounts to the creation of a local coding system, which violates the Health Information Portability Act (HIPAA), CAP leaders told CMS during the meeting. “By statute, local codes are not permitted,” said Jonathan Myles, MD, a pathologist at the Cleveland Clinic, and Chair of CAP’s Economic Affairs Committee, who together with Stephen Black-Schaffer, MD, led the CAP delegation at the meeting. “Palmetto’s creation and use of its Z-codes would circumvent the process of stakeholder input into changes prior to implementation,” he added.

The Palmetto Plan

Palmetto’s program, should it move forward, requires several steps before labs could receive payment for molecular tests covered by Z-codes, including those that currently use multiple methodology-based molecular diagnostic “stacking” CPT codes to identify the service as well as micro-array CPT codes, cytogenetic CPT codes, and pathology and laboratory Not Otherwise Classified (NOC) codes.

In order to obtain a Z-Code, labs must submit to Palmetto a dossier of information that includes information to support clinical tests’ validity and utility. A panel of “subject matter experts” chosen by Palmetto will assess this information and decide whether to cover the test. If the panel decides to cover a test, it will assign the test a Z-code. If the panel decides not to cover a test, that test will not be eligible for reconsideration for six months.

The CAP is also concerned about the lack of transparency in how the panel members are chosen, and that Palmetto’s process may not be compliant with the Federal Advisory Committee Act, which covers advisory committees and conflicts of interest. In addition, the CAP believes that Palmetto’s proposed modified gap-fill payment policy is inconsistent with existing payment rules and that the existing payment mechanisms should be used instead to develop payment amounts for laboratory services.

New Molecular CPT Codes

In response to concerns about variation in billing and payment for molecular tests, the American Medical Association’s CPT Editorial Panel developed and issued single CPT codes for the vast majority of molecular pathology tests.

In contrast to the Z-codes, which are to be developed privately without input from stakeholders, the new CPT Codes for Molecular Pathology were devised during a 2½ year process that included CMS, other payers, providers, and several organizations including CAP. The more than 100 codes cover 90% of existing molecular tests. However, CMS delayed implementation of the new molecular codes for Medicare use until it decides whether they should be placed on the physician fee schedule or on the clinical laboratory fee schedule.

“CAP continues to advocate that there is professional work involved in molecular pathology and the codes should be placed on the physician fee schedule,” Myles said. The College urged CMS to publish the developed relative value units on the physician fee schedule and allow them to gain momentum.

CMS is expected to respond to CAP’s request to revoke Palmetto’s Molecular Diagnostics program in the next couple of weeks. Statline will continue to follow and report on this issue.

Pennsylvania Genetic Counselor Law Preserves Physician’s Diagnostic Role

On December 22, 2011, Pennsylvania Governor Tom Corbett signed into law a bill amending the State’s Medical Practice Act that provides for the licensure of genetic counselors and defines their scope of practice. (PA HB333 (PDF, 50 K) | HB332 (PDF, 55 K) )

The CAP and the Pennsylvania Association of Pathologists worked with the Pennsylvania Medical Society to amend the scope of practice language in the bills, and ensure it conforms to the genetic counselor scope of practice (PDF, 155 K) agreement reached between CAP and the National Society of Genetic Counselors in 2011.

Specifically, the law’s scope of practice empowers genetic counselors to provide a broad range of consultative and coordination services to patients but does not include interpretation of test results.

CAP Urges CMS to Reconsider PQRS Penalties

In a letter to the newly appointed Acting Administrator for the Centers for Medicare and Medicaid Services (CMS) Marilyn Tavenner, the College laid out its concerns regarding the ACA-mandated penalties set to take effect in 2015, on physicians who do not report into the PQRS program.

The College’s letter was sent by Emily E. Volk, MD, FCAP, Chair of the CAP Measures and Performance Assessment Workgroup. Chief among the CAP’s concerns was the number of pathologists who cannot report on any of the five existing pathology measures because they practice in an area of pathology such as cytogenetics, toxicology, clinical microbiology or other subspecialties for which no measures exist, and for which there will be no applicable measures in the PQRS in 2013 or the foreseeable future, the letter said.

“The measure development and endorsement process is long, complex, and costly,” Volk said. “The CAP has been working on developing measures since 2007, and though we have made significant progress, many pathologists still do not have measures in the program.”

The letter described the important contribution laboratory data and pathologist laboratory directors have on measuring outcomes and influencing the delivery of health care, and highlighted the difficulty of capturing the contributions of pathologists through current performance measurement reporting mechanisms, including supposed universal measures.

Dr. Volk urged CMS to take pathologists’ issues into account as it begins to draft the 2013 Medicare physician fee schedule proposed rule, and asked CMS to exercise its discretion and exclude from payment adjustments those eligible providers—such as pathologists—who are unable to participate in the PQRS program.

First CMS Innovation Advisors Chosen

CMS has selected the first participants in its new Innovation Advisors Program.

Funded with $6 million from the Patient Protection and Affordable Care Act, the program is intended to drive improvements in the care of Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries and help reduce costs.

The 73 named participants from 27 states and the District of Columbia are expected to help accomplish this goal in their own institutions and communities, and to form partnerships to help drive delivery system reform. The participants will work with the Center for Medicare and Medicaid Innovation (CMMI) to test new models for delivering care within their own organizations, see what works, and share the results regionally and across the United States, says CMS.

The first participants were chosen from more than 900 applicants, according to CMS spokeswoman Ellen Griffith. Eligible participants include clinicians, allied health professionals, health administrators, and others.

“We’re looking to these Innovation Advisors to be our partners,” said CMMI Director Richard Gilfillan. “We want them to discover and generate new ideas that will work and help us bring them to every corner of the United States.”

No pathologists are among this first group, although advisors were chosen from three organizations represented in the CAP ACO Network. These include Carilion Clinic in Roanoke, VA; Massachusetts General Hospital in Boston, MA; and Montefiore Medical Center in Bronx, NY.

CMS intends to select a total of 200 advisors in the program’s first year, and pathologists are encouraged to apply. When making selections, CMS looks at career achievements and skills relevant to transforming healthcare delivery, including expertise in health care economics and finance, population health, systems analysis, and operations research. CMS also aims to make awards to individuals from different professions and regions of the country.

The Innovation Advisors program includes six months of orientation, participation in national and regional meetings, virtual training sessions, and seminars and presentations by healthcare experts.

CMS expects to accept more applications in the Spring and to select more participants by June 2012. Applicants who were not selected for the first group do not have to reapply and will automatically be considered when applications are reopened for the remaining Innovation Advisors slots.

CMMI and funding for the initiative were authorized by the Patient Protection and Affordable Care Act. Each Innovation Advisor’s organization will receive a stipend of up to $20,000.

2012 Physician Quality Reporting System Educational Products from CMS

The Centers for Medicare & Medicaid Services (CMS) announced the posting of 2012 Physician Quality Reporting System (PQRS) educational products on the CMS website. The list of products includes:

  • 2012 PQRS Measures List
  • 2012 PQRS Quality-Data Code (QDC) Categories
  • 2012 PQRS Single Source Code Master
  • 2012 PQRS Measure Specifications Manual for Claims and Registry Reporting of Individual Measures
  • 2012 PQRS Measure Specification Release Notes
  • 2012 PQRS Implementation Guide
  • 2012 PQRS Measures Groups Specifications Manual
  • 2012 Physician Quality Reporting Measures Groups Release Notes
  • Getting Started with 2012 PQRS of Measures Groups
  • 2012 Physician Quality Reporting Measures Groups Single Source Code Master
  • 2012 PQRS Measure-Applicability Validation Process for Claims-Based Reporting of Individual Measures
  • 2012 Physician Quality Reporting Measure-Applicability Validation Process Release Notes
  • 2012 PQRS Measure-Applicability Validation Process Flow
  • Group Practice Reporting Option Requirements for Submission of 2012 PQRS Data
  • 2012 PQRS Group Practice Reporting Option Measures List
  • 2012 Physician Quality Reporting GPRO Narrative Measure Specifications and Release Notes
  • 2012 EHR Direct Vendor Qualification Requirements
  • 2012 EHR Data Submission Vendor Qualification Requirements
  • 2012 EHR Documents for Eligible Professionals—this zipped file contains the following:
    • 2012 PQRS EHR Measure Specifications
    • 2012 PQRS PQRS EHR Measure Specifications – Release Notes
    • 2012 EHR Downloadable Resource Table
    • 2012 EHR Downloadable Resource Table - Release Notes
  • 2012 EHR Documents for Vendors – this zipped file contains the following:
    • Data Submission Specifications Utilizing HL7 QRDA Implementation Guide Based on HL7 CDA Release 2.0
    • Updated EHR Data Submission Specifications Utilizing QRDA – Release Notes 2012 EHR Downloadable Resource Table
    • 2012 EHR Downloadable Resource Table – Release Notes
    • Updated EHR Data Submission Specifications Utilizing QRDA Header Errors and Edits
    • Updated EHR Data Submission Specifications Utilizing QRDA Body Errors and Edits
    • 2012 CMS EHR QRDA Data Submission Specifications and Errors Edits Release Notes

Visit the Spotlight page on the CMS website for the listing of educational products and the corresponding section page where they can be found.


202-354-7100  •  202-354-7155 (fax)  •  800-392-9994


Related Links Related Links

Customize CAP Ads with your laboratory’s logo