College of American Pathologists
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March 14, 2013  •  Volume 29, Number 6
Next Issue: March 28, 2013
© 2013 College of American Pathologists

In This Issue:

CAP Policy Meeting Update: Leading Policy Experts at the Meeting

2013 CAP Policy Meeting Leading policy experts from the public and private sector will be at the CAP Policy Meeting May 6-8 at the Fairmont Hotel in Washington DC.

Don’t miss this chance to hear policy makers and pundits share their insights and participate in discussions about the issues that impact pathologists.

Click on the graphic to read more about our confirmed guest speakers, or see more about the dynamic meeting program we’ve planned and register now.

Registration is free to CAP members. Attendees pay only travel and hotel costs.

Budget Season Has Begun in Washington

Passage of Continuing Resolution Likely as Attention Turns to 2013 Budgets

While Republican and Democratic budget proposals are dominating the news in Washington, the Senate made progress this week on averting an imminent government shutdown by introducing a bi-partisan Continuing Resolution measure to continue federal agency operations before the current funding runs out on March 27.

The bi-partisan bill introduced by Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) and Ranking Member Richard Shelby (R-AL), allocates $984 billion to fund government operations through September 30, 2013, and allows federal agencies more latitude in reallocating the across-the-board cuts from sequestration within their own programs. The House passed a similar measure last week paving the way for an agreement to avert a government shutdown.

Both the Senate and House-passed bills contain no new funding to implement President Obama’s healthcare overhaul. For physicians, this means that initiatives such as the Medicare Independent Payment Advisory Board (IPAB), which CAP, AMA and other physician groups oppose, will not be funded this year. The IPAB’s charter is to bend the curve on Medicare spending by setting Medicare spending targets that Congress would have to adopt or offer alternatives of equal savings.

Also unfunded would be the State health insurance exchanges. In addition to the cuts from sequestration, all domestic agencies other than Veterans Affairs would be subject to a 5% across the board cut; the Pentagon would face an 8% cut.

The Senate is expected to debate and pass their funding bill this week, leading to conference committee negotiations between House and Senate negotiators sometime next week. Hopefully this will be wrapped up well before the March 27 deadline.

2014 Budget Talks Commence

In the meantime, the real showdown is about to play out on the 2014 federal budget, where House Republicans, Senate Democrats and the President will each present their own budget plans. Although federal budget proposals are not introduced as bills or signed into law, they are internal blueprints that direct Congress throughout the budget/appropriations process and suggest fiscal policy priorities.

Once the House and Senate each pass their versions of the budget resolution, a conference committee will convene to work out differences. The goal of these negotiations is to come to agreement on a single version of the budget resolution, which must then be voted on again by both the House and Senate. This could set the stage for further negotiations on a larger budget package—often referred to as the “grand bargain.” Both budget proposals will be marked up in their respective Budget Committees this week with likely votes beginning in the House next week.

The House Republican budget introduced by House Budget Committee Chair Paul Ryan (R-WI), proposes to balance the budget in a decade largely by repealing the Affordable Care Act (ACA) that increase spending while keeping the law’s pay cuts to providers and revenue increases. The plan calls for fixing the Sustainable Growth Rate (SGR) formula only if it includes an offset, but otherwise reduces Medicare/Medicaid costs by setting Medicare premiums through means testing, transforming it into a voucher system and dramatically scaling back Medicaid as a block grant program to the States. However, the budget also contains language that would allow dollars to be used from other parts of federal spending to restore the $700 billion in Medicare cuts that were included in the ACA. The cost of repealing the SGR has dropped considerably. Recently, the Congressional Budget Office pegged repeal of the SGR at $138 billion—a drop of $100 billion from previous estimates, so while the budget is being debated House Committees are beginning work on a measure that could permanently repeal the SGR. Overall, the Ryan budget is estimated to save $3.8 trillion over 10 years, with $2.7 trillion cut from Medicare, Medicaid, and ACA over 10 years.

The White House has said it will release its budget proposal sometime in April. although the bi-partisan Simpson-Bowles Commission appointed by the President to recommend ways to reduce the deficit released a revised proposal last month calling for $600 billion in health care cuts by revising benefits to adjust for an aging population, reducing drug costs, means testing Medicare premiums, cutting provider payments and moving forward with other delivery system reforms in 2013.

Senate Budget Committee Chairwoman Patty Murray (D-WA) has shared parts of the Senate Democratic proposal. This plan does not balance the budget, although it calls for nearly $1 trillion in spending cuts over the next decade, $275 billion from health care; as well as $975 billion in tax increases amounting to $2.5 trillion in savings. The plan would make no changes to Medicare’s entitlement structure but proposes to save $265 billion through unspecified efficiency changes, building on the health care reform law. These savings would likely be determined by decisions on cuts and other provisions made in future legislation. Another $10 billion in savings would come from new efficiencies in the Medicaid program. Absent larger entitlement reforms, achieving such savings could put the squeeze on providers and emphasize delivery system reforms to bring down health care costs. This plan would also replace the sequester cuts.

Statline will continue to follow the issue.

CAP Mobilizes For Accurate Molecular Pathology Payments

As disparate local Medicare pricing and coverage policies for the new molecular pathology molecular pathology CPT codes continue surfacing, CAP recently issued an appeal to pathology representatives from each state’s Contractor Advisory Committee (CAC) to educate their Medicare contractors on national resource-based values and other supporting rationale developed when the new Molecular pathology codes were first proposed.

The CAP is encouraging all providers to give timely feedback to their Medicare contractor to assist them with establishing gap fill pricing for molecular pathology services. In addition, CAP is reminding pathologists of new rules for professional molecular pathology interpretation services provided to Medicare beneficiaries. The Medicare contractors have until April 1, 2013 to set their initial pricing for 2013 under Medicare’s gap fill process.

Carrier Pricing Disparities

On November 1, 2012, the Centers for Medicare and Medicaid Services (CMS) announced that the molecular pathology codes developed through the AMA Current Procedural Terminology (CPT) process would replace the existing molecular diagnostic “stacked” codes, and would be placed on the 2013 clinical laboratory fee schedule (CLFS) using the gap-fill pricing method.

With gap-fill or carrier pricing, local Medicare contractors are setting fees for 2013 based on local pricing patterns. In practice, reimbursement can vary significantly among carriers, and there can be inconsistency on which services are covered. After a year of each Medicare contractor setting its own pricing, CMS will set pricing for 2014 by calculating a national reimbursement rate for each code based on the combined local gap-fill amounts.

Gap-filled pricing is meant to take into account charges for the tests; discounts on the charges; required resources; payment amounts determined by other payers; and charges, resources, and payment amounts for tests that may be comparable. However, the CAP is concerned with the establishment of local payment rates by the individual Medicare contractors because it is unlikely that the individual contractors can duplicate the extensive, detailed and highly accurate process that the AMA Resource-Based Relative Value Scale Update Committee (RUC) used to recommend resource-based values for each molecular pathology code. These detailed direct cost analyses for each service, developed by CAP with AMP and other professional societies through the AMA RUC process, supersedes any other data source available for pricing these services. CAP believes that this data should be used to develop prices for the molecular Pathology codes.

Also, local coverage determinations may overlook the defined criteria used by the CPT Editorial Panel in establishing Category I CPT codes for each of these services, which require that:

  • the service is consistent with current medical practice
  • the clinical efficacy of the service is documented in literature that meets the requirements set forth in the CPT code change application
  • the service is performed with frequency consistent with the intended clinical use

For more information on the resources available for Molecular pathology coverage discussions, contact Nonda Wilson.

New G-code for Medicare Molecular Pathology Physician Interpretation

Read more about the MoPath G-code on the new CAP members-only online community—CAPconnect.

Register now and join the conversation.

In a separate but related matter, CAP reaffirmed that Medicare physicians who interpret molecular tests and prepare written reports above and beyond laboratory results should already be billing for that service using the physician fee schedule (PFS) HCPCS G-code G0452 (molecular pathology procedure; physician interpretation and report).

CMS announced the creation of the G-code in the 2013 PFS, to be used when physician interpretation of a molecular pathology test is medically necessary to provide a clinically meaningful, beneficiary-specific result. However, there have been reports that some institutions still have not added the G-code G0452 to their billing system.

CMS’ announcement in the 2013 final rule also included specific instruction and criteria associated with the new physician interpretation code:

This professional component-only HCPCS G-code will be considered a “clinical laboratory interpretation service” which is one of the current categories of PFS pathology services under the definition of physician pathology services at §415.130(b)(4).

Section §415.130(b)(4) of the regulations and section 60 of the Claims Processing Manual (IOM 100-04, Ch. 12, section 60.E.) specify certain requirements for billing the professional component of certain clinical laboratory services including that the interpretation (1) must be requested by the patient’s attending physician, (2) must result in a written narrative report included in the patient’s medical record, and (3) requires the exercise of medical judgment by the consultant physician.

We note that a hospital’s standing order policy can be used as a substitute for the individual request by a patient’s attending physician. The current CPT code for interpretation and report, 83912-26, is included on the current list of clinical laboratory interpretation services but will be deleted at the end of CY 2012.

For those providing molecular pathology physician interpretation services for Medicare beneficiaries who meet the above CMS criteria, G0452 should be reported.

“We encourage anyone performing these services to consult with your billing personnel to ensure the G-code is being used where appropriate,” said Economic Affairs Committee Chair Jonathan Myles, MD, FCAP. “CMS has indicated that it would monitor utilization of the code and reassess the need for the code based on utilization. It’s important to capture this information as accurately as possible.”

ACO Pioneers Push Back on CMS Quality Benchmarks

The CMS Innovation Center (CMMI) may have to delay plans to transition the Accountable Care Organization (ACO) Pioneer program in year 3 from pay-for-reporting to performance based pay, due to concerns from the program’s participants about the 2013 quality benchmarks.

A letter to CMMI Director Richard Gilfillan from 30 of 32 Pioneer ACOs hinted they may leave the program over concerns about flat percentage benchmarks in 19 out of the 31 quality measures, which they believe lack actual underlying ACO data. The Pioneers want CMMI to continue collecting data from the Medicare Pioneer and Shared Savings programs in order to arrive at more empirical benchmarks.

The letter also noted that the CMMI’s proposed benchmarks are higher than standards set in commercial contracts, and do not take into account that best in class performance, even for mature measures with proven track records, is often no higher than 70%. They argue that a richer ACO database would help determine best in class performance and set percentiles from actual ACO data.

This is not the first time a group of Pioneer ACOs sought changes in the program. Correspondence from February shows several organizations had even more specific ideas in mind, including that they be paid for reporting and improving performance rather than having to meet fixed goals; that CMS weigh metrics differently depending on the population served; and that the agency fix measures based on insufficient data or with incorrect denominators.

The Pioneer ACOs include some of the nation’s leading health system ACOs like the Beth Israel Deaconess Physician Organization in MA; Dartmouth-Hitchcock Healthcare ACO of Vermont; Healthcare Partners of CA; Monarch Healthcare in Orange County; and Montefiore in NYC. They have asked CMMI to respond to their request to delay pay for performance using the proposed quality measures by April 2, 2013, in order to determine their continued participation in the program. A meeting with CMS acting Administrator Marilyn Tavenner is planned this month.

CMS Issues Guidance on Sequestration

CMS confirmed late last week that Medicare fee-for-service claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment due to the federal budget sequestration which took effect on March 1. With no signs that it will be lifted anytime soon, providers will likely see the new lower payments begin in mid-April.

The claims payment adjustment will be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction. CMS is encouraging Medicare physicians who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare’s reimbursement.

Providers are advised to direct questions about reimbursement to your Medicare claims administration contractor.

Justice Dept Seeks Input on Strengthening Forensic Pathology

The Justice Department is moving forward on recommendations to strengthen forensic science, including exploring formal relationships between academic pathology departments and local medical examiner and coroners offices, based on a draft report from the Scientific Working Group for Medicolegal Death Investigations (SWFMDI).

The Department of Justice, through its National Institute of Justice, created the SWFMDI to implement recommendations from a 2009 National Academy of Sciences’ report Strengthening Forensic Science in the United States, that found serious deficiencies with the nation’s forensics systems. One specific recommendation was that federal resources be allocated to support research, education, and training in forensic pathology. The SWFMDI draft report, based on a survey of pathology department chairs, explores ways to increase the number of forensic pathologists and advance forensic science by strengthening the relationship between academic pathology departments and medical examiner offices.

The report summarizes various ways to address the shortage of forensic pathologists by advocating more of a relationship between medical examiner/coroner offices and academic pathology departments and also specifies the details of those arrangements (e.g. contracts, pay etc.) It also encourages increased awareness and opportunities to experience forensic pathology by medical students.

The CAP joined the National Association of Medical Examiners (NAME), the American Society of Clinical Pathology (ASCP), and the Association Pathology Chairs (APC) in providing feedback to the draft report.

Tennessee AG Clarifies State Law Prohibiting EHR Donation

Tennessee Attorney General Robert E. Cooper, Jr., issued an opinion last week confirming that the Tennessee Medical Laboratory Act prohibits a clinical laboratory from making an electronic health record donation to a referring physician that would otherwise be permitted under the current Federal safe harbor and that the federal safe harbor for EHR donations does not preempt the state’s anti-kickback law.

“A medical laboratory licensed by the State of Tennessee may not lawfully make a monetary donation to a physician to cover the cost of software designed to manage a physician’s electronic health records (EHR) when the physician’s office that receive the EHR donation either continues an existing referral arrangement with the donating laboratory or subsequently initiates an arrangement for referral of specimens to the donating laboratory for analysis,” the AG wrote.

The AG issued the opinion in a letter to Tennessee State Senator Doug Overbey. The CAP and the Tennessee Society of Pathologists appealed to the Senator for assistance after the Tennessee Clinical Laboratory Board, which held two hearings on the matter, indicated it would not issue an opinion.

The CAP has worked with other state pathology societies to strengthen local anti-kickback laws. So far, seven states, TN, WV, NY, NJ, PA, MO and WA now limit or forbid EHR donations. The federal safe harbor for EHR donations is scheduled to sunset December 31, 2013.


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