College of American Pathologists
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March 31, 2011  •  Volume 27, Number 7
Next Issue: April 14, 2011
© 2011 College of American Pathologists

In This Issue:

Breaking News: CMS Releases Proposed Rule for ACOs
Tavenner: CMS Moving “Full Steam Ahead” with ACO Plans
CAP Meets with MedPAC on Proposed Payment Reform Concerns
Rep. Barney Frank (D-MA), CAP Member Discuss Self-Referral
Dentzer, Kondrake to Headline CAP 2011 Policy Meeting
CMS Halts Signature Requirement Implementation
State Insurance Legislators Craft Model Out-of-Network Law
Texas, Mass. Considering Genetic Testing Regulation Changes
CAP Teams with AHA and Surescripts for the CDC Lab Interoperability Cooperative
ONC Releases 2011-2015 Federal Health IT Strategy for Comment
Keep Up with the Latest CAP Advocacy News on Twitter

Breaking News: CMS Releases Proposed Rule for ACOs

March 31–HHS Secretary Kathleen Sebelius and CMS Administrator Donald M. Berwick, MD, this morning announced the release of the proposed rules for implementation of accountable care organizations (ACOs), as required under the health care reform law.

“These rules will help teams of doctors form ACOs…and in return, they will be able to share in savings that come from coordinating care and improving the quality of health,” said Secretary Sebelius during a telephone press event announcing the rule’s release. She added that CMS estimates ACOs could save Medicare between $510 million and $960 million over the next three years, net of provider savings payments.

Coming in slightly over 400 pages, the proposed rule will be open for comments for 60 days, and CMS officials will be gathering stakeholder feedback at listening sessions held throughout the country in the coming months. The College is currently analyzing—and will provide feedback to CMS—on the rule’s impact on pathologists. CMS is expected to publish a final rule later this year.

The proposed rule includes 65 quality measures, which Dr. Berwick detailed in a New England Journal of Medicine column, also published online this morning. In addition, the Federal Trade Commission (FTC) released an anti-trust document this morning to accompany the CMS proposed rule. In the Proposed Antitrust Enforcement Policy Statement Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, the FTC outlines certain safe harbors and related information allowing providers to form integrated health care delivery systems without conflicting with the antitrust laws.

Tavenner: CMS Moving “Full Steam Ahead” with ACO Plans

Days before CMS released the proposed rule outlining the implementation of accountable care organizations (ACOs), Deputy Administrator Marilyn Tavenner said the agency is on track to meet the 2012 launch date. “The reform law requires us to have ACOs up and running by January 2012, and we have every intention of meeting this deadline,” she explained at a March 29 healthcare forum sponsored by CQ Roll Call and Thomson Reuters.

This emphasis on momentum follows Tavenner’s March 22 remarks to the Nashville Health Care Council, where numerous press accounts reported that she indicated that the ACO implementation would take a pilot approach, rather than a broad nationwide rollout. Not so, she stated at this most recent event, where she also refuted speculation about the agency being ill-equipped to handle a large volume of ACO applications. “We are not backing away, but moving full steam ahead, while recognizing that there will be many different ACO models that we will support with the help of the CMS Center for Innovation,” she explained. “It is our intention to work with all applicants and we have the staffing to work with a large volume of applicants.”

IPAB on Track?

In addition to stating that ACO implementation was on track, Tavenner also indicated that CMS is moving forward with plans for one of the many controversial components of the health care reform law—the Independent Payment Advisory Board (IPAB). The College, as well as other health care provider groups including the AMA, has been critical about this provision of the health care reform law, as it shifts responsibility for Medicare coverage and payment decisions to an unelected body in the Executive Branch.

“While the IPAB is not in effect until 2013, the plan is still to move forward, unless there are changes from Congress,” Tavenner explained. Because the IPAB is part of the health care reform law, repeal would be necessary to halt implementation.

One repeal effort is currently underway in the House of Representatives. In February, Tennessee Congressman David P. (Phil) Roe, MD (R) introduced The Medicare Decisions Accountability Act (HR 452), which currently has at least 50 cosponsors. In addition to this proposal, Sen. John Cornyn (R-TX) is rumored to be authoring new legislation similar to the legislation to repeal IPAB that he introduced during the last Congress.

CAP Meets with MedPAC on Proposed Payment Reform Concerns

Two CAP members, along with staff, met this week with members of an independent Congressional agency to discuss proposed payment reforms to address issues related to self-referral of in-office ancillary services (IOAS). The Medicare Payment Advisory Commission (MedPAC), which advises Congress on issues affecting the Medicare program, is holding a public meeting next week to continue discussions on these draft reform recommendations, which include bundling and/or packaging as well as reducing payment for these services.

CAP members Jonathan L. Myles, MD, FCAP, and Jeffrey A. Welsh, MD, FCAP, met with MedPAC Executive Director Mark Miller and Ariel Winter, a senior analyst on self-referral. In the meeting, Drs. Myles and Welsh outlined some concerns about these recommendations. In terms of bundling/packaging, this could lead to less than medically necessary care, explained Dr. Myles, who is the CAP’s Advisory Committee member to the AMA/Specialty Society Relative Value Scale Update Committee (RUC). Packaging AP services will not achieve the efficiencies MedPAC seeks as the RUC recognized the pre- and post-service time associated with these services is “de minimus” or virtually nonexistent.

Another draft recommendation is reducing the physician work component (PC) when the ordering and performing physician are the same. This will not address pathology self-referral concerns, primarily because CLIA prohibits physicians not certified in pathology from billing for the PC. In addition, CAP staff noted that this would actually allow the proliferation of self-referral to continue.

At the February MedPAC meeting, officials indicated that if the self-referral issue is included in its next report to Congress, it will likely be in the form of payment recommendations rather than adjustments to the IOAS exception to the Stark law. Nevertheless, the College continues to advocate that AP testing services be removed from the IOAS exception.

Rep. Barney Frank (D-MA), CAP Member Discuss Self-Referral

CAP member Michael Misialek, MD, FCAP, recently met with Massachusetts Congressman Barney Frank (D-MA) to discuss several priority advocacy issues for pathologists, including the impact of self-referral of anatomic pathology services on Medicare and the pathologist’s role in personalized medicine.

“Rep. Frank is very interested in the Medicare costs and potential for unnecessary utilization related to self-referral of pathology services,” said Dr. Misialek, a pathologist at Newton-Wellesley Hospital in Newton, Massachusetts. “He mentioned that he was interested in addressing this issue.”

Dr. Misialek also highlighted the critical role of pathologists in patient care, and the need to recognize this in forthcoming coordinated care models such as ACOs and medical homes. “We discussed the pathologist’s role in ensuring appropriate test utilization in personalized medicine, and the need for our specialty to have a visible role in emerging health care delivery models, including ACOs,” explained Dr. Misialek.

Dentzer, Kondrake to Headline CAP 2011 Policy Meeting

Online registration is now open for CAP’s 2011 Policy Meeting, which will be held May 2-4, at Four Points by Sheraton in Washington, DC.

This year’s event will feature PBS NewsHour’s health care policy correspondent, Susan Dentzer and Roll Call Editor, Morton Kondracke. Speakers will also include Thomas B. Valuck, MD, JD, Senior Vice President of National Quality Forum, as well as leaders from the CMS and the HHS Office of the National Coordinator for Health Information Technology.

If you’re involved in local, state or national health care issues, or are new to politics and looking to learn more, the CAP 2011 Policy Meeting is for you. Presentation topics include pathology’s role in ACOs and other proposed health care delivery models, pay-for-performance, and the pathology’s challenges regarding HIT. Please note that the event is limited to only 100 attendees. Registration is $350 and includes all meeting materials, breakfasts, lunches, breaks and cocktail receptions. For more information on the 2011 Policy Event, contact or Melissa Stegun at 800-323-4040, x7110.

CMS Halts Signature Requirement Implementation
Agency Grappling with How to Finalize Rule Withdrawal

While CMS officials have publicly indicated support for withdrawing the signature requirement provision of the 2011 Physician Fee Schedule (PFS), the CAP has learned that the agency will continue to delay implementation as officials determine how to rescind this policy.

The signature requirement was set to go into effect on April 1. Late on March 31, however, the agency issued an update stating that it would “focus its resources for the remainder of 2011 on changing the regulation that requires signatures on laboratory requisitions”. This decision was based on input from physicians, clinical diagnostic laboratories, and related providers concerned about complying with this policy.

Because the signature requirement was part of a final rule—this year’s PFS—it will be more difficult to rescind. In fact, the CAP has learned the agency must first issue a notice and request for comment. After the comment period closes, CMS will likely issue a final rule rescinding the requirement later this year. In the meantime, agency officials have indicated to the College and other industry stakeholders they will extend the current enforcement delay.

This most recent announcement follows a March 11 letter from CMS Administrator Donald M. Berwick, MD, to Rep. Michael C. Burgess, MD (R-TX) reiterating support for rescinding the requirement. “We are currently researching whether a regulation rescinding the requirement could be published before April 1, 2011,” he wrote. This communication was in response to letters sent by leaders from the House of Representatives and the Senate in early February urging the agency to further delay implementing the rule as officials reconsidered the regulation. These letters were a result of efforts by the CAP and other members of the Clinical Laboratory Coalition (CLC), who asked Congress to contact the CMS Administrator regarding this issue.

Stay tuned to Statline for updates on further developments on the signature requirement.

State Insurance Legislators Craft Model Out-of-Network Law

The National Conference of Insurance Legislators (NOIL) has introduced model legislation to help state lawmakers enhance health care transparency by addressing out-of-network billing issues.

NCOIL developed the template, the Health Care Balance Billing Disclosure Model Act, based on input from a variety of provider groups, including the AMA, the College and other specialty societies. Specifically, the CAP was successful in addressing issues that may prompt concern from pathologists.

Out-of-Network Bill Watch

In related news, the College is closely monitoring recently signed and proposed out-of-network laws in Illinois and New Jersey. Earlier this year, Statline reported on the College’s work with the New Jersey Society of Pathologists (NJSP) to amend an out-of-network bill so that pathologists would be exempt from providing written cost estimates for services to patients (Statline, 1/20/11). This exemption would be an amendment to legislation passed by the state Assembly in early January, and now under consideration by the state Senate Commerce Committee.

In Illinois, Gov. Pat Quinn (D) signed legislation effective June 1 requiring insurers and out-of-network providers to negotiate reimbursement rates for services provided when a patient has made a good faith effort to use an in-network provider. If the parties fail to agree on a rate, then arbitration may be initiated by either party through the state’s Department of Insurance. Previously, insurers were required to reimburse an out-of-network provider in full for services provided in these situations.

Opposition to this new law was advocated by a coalition led by the Illinois State Medical Society (ISMS) that included the CAP and the Illinois Society of Pathologists (ISP). The ISMS coalition, ISP and the College are now working to restructure the new law and address some of the physician groups’ concerns.

Texas, Mass. Considering Genetic Testing Regulation Changes

The College is closely monitoring proposed changes to genetic testing regulations in both Texas and Massachusetts that, if passed by state legislators, could significantly change the way pathologists in those states practice medicine.

State laws vary on the extent to which physicians must obtain informed consent from patients prior to performing genetic testing. Many states exempt pathologists from obtaining this consent directly from patients when specimens are used for diagnosis and treatment. Such an exemption currently exists under Massachusetts state law. However, a proposed state Senate bill would remove this exemption. The legislation—Senate Bill 1080 (Genetic Bill of Rights)—also fails to distinguish the type of genetic testing that would be subject to informed consent regulations.

The Massachusetts Society of Pathologists (MSP)—along with the CAP—supports informed consent when patient specimens are tested for purposes other than diagnosis and treatment, such as for research. “Given existing informed consent requirements for all pathology specimens used in diagnosis and treatment, genetic testing should not be subject to supplementary and exceptional informed consent requirements that will encumber or impede the use of such testing for purposes of diagnosis and treatment of a patient,” stated MSP President C. Dean Pappas, MD, in a letter to the state’s Assistant Majority Whip of the Senate, Harriette L. Chandler. “This bill can have an especially negative impact on genetic testing for cancer diagnosis and treatment.”

Challenges in Texas

In Texas, recent legislation introduced in that state’s legislature has prompted concern from the CAP and the state’s pathology society, as the proposed bill does not contain an exemption for pathologists.

The reason cited for this informed consent provision is property rights; the patient has an exclusive right to his or her genetic material and must give consent for genetic testing to be performed on their DNA sample. In fact, under House Bill 2110, it would be unlawful for a pathologist to order or perform a genetic test on a patient sample without obtaining the informed consent of the individual, noted Texas Society of Pathologists President Michael Deck, MD, in a letter to State Rep. Lois Kolkhorst (R), Chair of the House Committee on Public Health.

Dr. Deck noted that there are practical impediments for pathologists receiving informed consent directly from patients. “Beyond this logistical hurdle, in some cases, the need for genetic testing may not be evident when the initial patient sample is obtained by the ordering physician or during a surgical procedure,” he added.

The informed consent provision of this proposed bill also involves retention of a patient’s DNA sample. Under CLIA, clinical laboratories are required to retain patient specimens for certain time periods—sometimes as long as 10 years, depending on the specimen. However, HB 2110 seeks to prohibit laboratories from retaining DNA samples without informed consent of the patient.

CAP Teams with AHA and Surescripts for the CDC Lab Interoperability Cooperative

The College is partnering with the American Hospital Association (AHA) and health information network provider Surescripts to launch the Laboratory Interoperability Cooperative (LIC) as part of a recently awarded grant from the Centers for Disease Control and Prevention (CDC).

The focus of the LIC is to facilitate electronic reporting of public health laboratory results between hospitals and public health agencies—a key component of the HHS Office of the National Coordinator for Health IT’s Meaningful Use of EHR program.

The two-year CDC grant requires the AHA, the CAP, and Surescripts to recruit, educate and connect a minimum of 500 hospital laboratories to the appropriate public health agencies. The LIC will provide the necessary technical assistance to enable these hospital laboratories to begin electronically transmitting laboratory results within six months.

For the CAP, the goal is to help hospital laboratories establish electronic connectivity with public health agencies, which will also help them meet Meaningful Use requirements, said Debra Konicek, a Managing Director of the College’s STS (SNOMED Terminology Solutions) division. “Right now, we are focusing on recruiting the 500 hospitals as part of the first phase of this program,” she explained. “Our responsibilities will expand in phase two, which is set to get underway in approximately six months. During this phase, we will launch the pilot programs, which will involve laboratory data readiness and preparing the framework for the hospital laboratories to transmit the appropriate data to the agencies.”

In addition, CAP’s STS staff will provide expertise and implementation guidance to selected laboratories for mapping and encoding the reportable lab tests to Logical Observation Identifiers Names and Codes (LOINC) standardized terminology for Meaningful Use.

Aggregation Key to Post-Analytical Improvement

The College initially became aware of this CDC grant opportunity from member Donald Connelly, MD, PhD, FCAP, Professor of Laboratory Medicine and Pathology and the Institute for Health Informatics at the University of Minnesota. Dr. Connelly told Statline that he views the College’s participation in the LIC as valuable, as it will help to aggregate laboratory testing data from many hospital labs resulting in important public health synergy. This can help define the pathologist’s role in health IT while improving the quality of care delivered to patients.

“Coming from a lab aggregation perspective the CAP improved the preanalytical process of labs across the nation through its accrediting program, and the analytical process through that and it’s proficiency testing services,” said Dr. Connelly. “By helping to aggregate laboratory testing data, the CAP helps the nation gain important public health synergy from the post-analytical process.”

The CAP is currently assisting with the recruitment of eligible hospital laboratories to participate in the LIC, which will continue through July 2011. For more information, please visit

ONC Releases 2011-2015 Federal Health IT Strategy for Comment

HHS’s Office of the National Coordinator for Health Information Technology (ONC) has released its Federal Health IT Strategic Plan: 2011-2015, which will be open for public comment until April 22. The Plan reflects ONC’s strategy, developed in collaboration with other federal partners, over the next five years for realizing Congress and the Administration’s health IT agenda.

Specifically, this plan describes how ONC will work collaboratively with federal and private stakeholders to facilitate the forthcoming phases of Meaningful Use that will allow the health care system to harness the power of health IT to bring information to bear in new ways to improve care and transform the health care system.

The College is currently analyzing the plan, which ONC will finalize later this year, just as eligible professionals and hospitals demonstrating Meaningful Use of certified electronic health record (EHR) technology can receive incentive payments under incentive programs authorized by the HITECH Act.

Keep Up with the Latest CAP Advocacy News on Twitter

CAP Advocacy is now on on Twitter. Follow CAP Advocacy’s daily “tweets” to keep pace with regulatory and legislative news affecting the pathology industry. For the latest health care news, be sure to check out the what we are following on Twitter.


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