College of American Pathologists
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February 28, 2013  •  Volume 29, Number 5
Next Issue: March 14, 2013
© 2013 College of American Pathologists

In This Issue:

Physicians Brace for Sequestration, Few Details Available

As Medicare providers brace for a 2% pay cut resulting from federal budget sequestration, details have yet to emerge from CMS on how or when the cuts will be implemented.

Modern Healthcare is reporting that the 2% payment reduction will go into effect on April 1, 2013. However, HHS has not yet alerted providers or insurers about the date of the payment cuts. Health care groups are anticipating an April 1 start date because the legislation that created the sequester specified that it cut Medicare reimbursements for services provided the month after the sequester’s start, which would be March 1. If this holds true, providers should expect to see cuts in their Medicare reimbursements in mid-April.

Other details of the Medicare sequester still have not been made public. We do not know if the cuts will be applied to allowed charges under the Medicare physician fee schedule or if it will be applied only to the physician’s Medicare claims payment. It also is not clear whether the cuts will be applied to claims with a date of service on or after April 1, or to all claims payments made on or after April 1.

Of course, there is still hope that Congress and the White House will reach agreement on budget reductions and the sequester will be averted. There is also a possibility that an agreement will be reached after the March 1 deadline, but before the cuts are felt. In this case we could expect to see Congress or CMS release further information on how the situation will be remedied.

See a thumbnail view of how the overall health sector will be impacted by sequestration in this blog from Harvard Law School.

Stay tuned to CAPDCADVOCACY on Twitter for the latest sequestration news.

AMA to Map McKesson Z-Codes Identifiers to CPT

The American Medical Association (AMA) this week announced a new licensing relationship with McKesson Health Solutions that will create a new hybrid reference product mapping McKesson Z-code identifiers to AMA’s Current Procedural Terminology (CP®) code set.

Under the agreement, McKesson will group and index its existing library of proprietary Z-Code™ Identifiers to the molecular pathology codes in the AMA’s Current Procedural Terminology (CPT®) code set. The College was instrumental in developing the 100+ molecular pathology CPT codes adopted by CMS last year. Although it is too early to know precisely how this announcement will impact molecular testing, CAP affirmed its support for continuing to involve physicians in developing CPT codes.

“CAP supports ensuring that CPT continues to utilize the knowledge and insight offered by physicians in establishing CPT codes, and in the case of molecular pathology the knowledge that we have brought to create greater transparency in this area,” CAP said in a statement. “Connecting the CPT process to McKesson Z-Code identifiers provides the potential for greater granularity for identifying and reporting molecular pathology services. CAP looks forward to working with the AMA on this new endeavor.”

According to the AMA press release, McKesson will continue adding test information to its proprietary McKesson Diagnostics Exchange™, which contains a shared test catalog laboratories and diagnostics manufacturers can use to submit information about their specific MDx tests, and providers and payers can use to understand and evaluate them. The McKesson Diagnostics Exchange issues a unique Z-Code Identifier to each test and catalogs it for reference and understanding by other stakeholders in the system. These Z-Code Identifiers cannot be used for filing payment claims. Under the agreement, AMA will use the information submitted to the Exchange to assign CPT code mappings where appropriate. Not all Z-Code Identifiers will immediately map to a CPT code, and, in many cases, multiple Z-Code Identifiers will map to a single CPT code.

The agreement between the AMA and McKesson will result in the creation of a new reference that will be available for licensing from AMA early in 2014.

“The McKesson Diagnostics Exchange provides an infrastructure that will support the AMA’s efforts to advance personalized medicine, promote access to innovative diagnostic capabilities and improve patient outcomes,” said James L. Madara, MD AMA chief executive officer and executive vice president. “The added capabilities will complement the AMA’s ongoing development and maintenance of a CPT code set for molecular diagnostic services and provide a valuable tool for physicians, hospitals, payers and the diagnostics industry that will help organize vital information about MDx tests.”

Sequestration Cuts to GME Could Impact Physician Shortages

If there is no doctor, what will you doIn just one day, $1.7 trillion in sequestration cuts are set to go into effect, unless Congress arrives at a “grand bargain”. These across-the-board cuts will reduce Medicare physician pay by 2%, and decrease federal funding for graduate medical education (GME). Both could impact physician shortages in many locations around the US.

The Affordable Care Act which ushered in health care reform, provided for the creation of a commission to investigate the impending health care work force problem and recommend solutions. However, according to a NY Times report this week, the commission has been unable to meet because it has not been funded.

Lacking the commission’s guidance, lawmakers have indicated GME funding could be on the block as a means to cut Medicare spending, with or without sequestration.

The federal Medicare program provided about $9.5 billion in GME subsidies to hospitals in 2010, in the form of direct and indirect funds. That’s nearly $2 billion (adjusted for inflation) more than it was 20 years ago. There is no oversight on how the funds are spent. Medicare's education-labeled funds don’t flow directly to residents or to individual residency programs’ administrators. Instead, the funds are included with Medicare’s lump-sum payments into the sponsoring hospital's general account. Federal law doesn’t require hospitals to document how the GME funds are spent. Directors of residency programs are left to negotiate funding needs for their individual programs with the hospital.

In an era of budget cutting, transparency, and deficit reduction, GME funding has come under scrutiny in Congress and the Obama administration.

Several deficit-reduction proposals have recommended cuts.

  • In June 2010, the Medicare Payment Advisory Commission (MedPAC), recommended converting a portion of the indirect medical education payment into a performance-based, incentive pool of about $3.5 billion to reward programs meeting certain performance standards. Unrewarded funds would go back into Medicare.
  • The presidential Simpson-Bowles Commission put forth a plan in December 2010 to reduce Medicare funding for GME by $60 billion over a 10-year period. This plan includes the reducing the indirect payments as proposed by MedPAC, but it doesn’t in create the incentive pool.
  • President Obama last year suggested a more modest cut that would still save Medicare a projected $9.7 billion over nine years.

The CAP and other medical societies are concerned about the impact of GME funding cuts could have on physician shortages, and they are participating in an advertising campaign aimed at informing lawmakers on the impact physician shortages will have on patients. AMA is urging physicians to call Congress to preserve GME funding levels.

For some, the thought of a pathologist shortage seems counter-intuitive, yet all forecasts point to moderate to severe shortages in the next 10 years. In 2008, the federal Health Services Resource Administration (HRSA) projected a shortage of 4,400 pathologists by the year 2020.

“CAP is mounting an effort to mitigate this trend; working with the Association of Pathology Chairs, American Society for Clinical Pathology, and others on new curricula and advocating funding for pathology GME,” said Dr. Stephen Black-Schaffer, vice chair of the CAP Policy Roundtable. “Pathology is changing, as described in CAP’s Promising Practice Pathways report, which discusses current and emerging opportunities for pathologists, and provides a road map for informing new training program content. We must ensure that future pathologists are equipped to meet future health care needs.”

Statline will continue to follow and report this important issue impacting the specialty. Follow CAPDCADVOCACY on Twitter for the latest news on sequestration and other policy news.

CAP Model ACO Legislation Introduced in California and Illinois

CAP model legislation to promote the pathologist’s role within Accountable Care Organizations (ACOs) was introduced this month in California and Illinois. Introduction of the legislation was a collaborative effort between CAP and the Illinois Society of Pathologists (ISP) and the California Society of Pathologists (CSP), with legislative language modeled on legislation advocated by CAP and enacted last year in Massachusetts as part of that state’s healthcare reform initiative. For more details see Statline August 2, 2012.

Illinois House Bill 2544 and California Senate Bill 264 require every ACO to establish a clinical laboratory advisory board to include a physician who is medical director of the clinical laboratory providing services to the ACO. The purpose of these boards is to advise the ACOs on “adoption of guidelines or protocols for clinical laboratory testing used for diagnostic purposes or disease management” and for “pathologist consultation on episodes of care.”

The CAP Policy Roundtable’s Whitepaper on ACOs includes the advisory board recommendation detailed in the legislation in promoting quality and in furtherance of the ACO mission in controlling cost and optimizing delivery of medical care through appropriate testing.

Both bills were referred to their respective oversight committees for further consideration.

BRCA Testing Included as Essential Health Benefit

The Department of Health and Human Services announced that genetic counseling and BRCA testing will be covered as “Essential Health Benefits” (EHB) provided through the state and federal health insurance exchanges created under the Affordable Care Act (ACA). The exchanges will offer insurance coverage to all citizens.

The provision was included in the final rule on essential health benefits released this week, which defines what must be covered in exchange plans, determines levels of coverage, and addresses other aspects of administering the insurance exchanges in each state.

The vast majority of the provisions do not directly impact pathologists, however the proposed rule had not explicitly included BRCA testing as an essential benefit. The FAQs included in the rule make clear that if is appropriate as determined by the patient’s health care provider, genetic counseling as well as testing will be covered.

In December 2012 comments on the proposed rule, CAP had sought to have medically necessary ‘genetic and genomic testing’ expressly included under “laboratory services,” which is one of ten mandated essential health benefits under the ACA. HHS opted to not define the scope of “laboratory services”. Rather, HHS will rely on the state benchmarks in each state’s base benchmark insurance plan that has been selected by the State. Alternatively, HHS has also stated that the default base-benchmark plan for states, Puerto Rico and the District of Columbia that do not exercise the option to select a benchmark health plan would be the largest plan by enrollment offering the largest product by enrollment in the State’s small group market.

The essential health benefits include ambulatory patient services; emergency care; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and rehabilitative services and devices; laboratory services; preventive and wellness services, and chronic disease management; and pediatric services, including dental and vision care.

Health Policy Expert Nancy-Ann DeParle to Speak at CAP Policy Meeting

Nancy-Ann DeParleNancy-Ann DeParle, President Obama’s former deputy chief of staff for policy, and a former director of the Healthcare Financing Administration (now CMS) under Bill Clinton will be among the health policy leaders featured at the CAP 2013 Policy Meeting May 6, 2013.

Until recently, DeParle was the most senior female member of the Obama administration. A nationally recognized expert on the Affordable Care Act, she served as the director of the White House office of Health Reform, leading the law’s development and passage into law. DeParle’s presence at the CAP Policy Meeting is sure to provide an insider’s look at the political landscape and the role of the White House in the current legislative climate.

Also confirmed to speak at the meeting will be Sean Cavanaugh, Deputy Director, Programs and Policy, in the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services, and Charlie Cook, Editor and Publisher of the Cook Political Report and a political analyst for NBC News and National Journal.

Visit the Policy Meeting Registration page for more information on speakers, panels and registration for this premier CAP event.

CAP and NYSSPATH seek to remedy State Law Blocking Lab-Patient Contact

CAP and the New York State Society of Pathologists (NYSSPATH) are seeking amendments to state legislation (Senate Bill 634) that would remove legal impediments to laboratories sharing test results with patients and reverse prohibitions on patients conferring with pathologist laboratory directors on the meaning of test results.

The Senate legislation introduced by Senator Toby Ann Stavisky, would require laboratories to provide patients access to their laboratory test results. The CAP-NYSSPATH amendments would require labs to make test results available to patients after the results have been provided to the ordering clinician except in an emergency; and they would explicitly permit patients to contact or confer with the pathologist who performed or supervised their test.

The CAP and NYSSPATH position is that patient care is best served when patient test results are first received by the patient’s ordering physician or ordering health care practitioner, allowing the patient to be able to immediately confer with the ordering health care provider, and eliminating any confusion or anxiety caused by such testing. “Test results, especially with complex medical testing, including anatomic pathology reports, may be difficult for the lay person to put into context and proper perspective,” according the organizations’ joint letter proposing the amendments.

With respect to the second provision, current New York regulations are a legal impediment to pathologists&#$8217; ability, in their capacity as laboratory medical directors, to confer with patients.

“There is no sound medical reason for placing any such legal barrier, as currently exists in New York, between pathologist laboratory directors and their patients,” the CAP/NYSSPATH letter stated. “Advances in medicine may catalyze even greater need for pathologists’ conferral with patients on interpretation of medical test results based on molecular or genetic markers of clinical or therapeutic significance.”

The bill was referred to the NY Senate Health Committee on January 9, 2013.


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