College of American Pathologists
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April 15, 2010  •  Volume 26, Number 8
Next Issue: April 29, 2010
© 2010 College of American Pathologists

In This Issue:

Congressional Lab Tour: Rep. John Barrow visits St. Joseph’s/Candler Health System
21% Physician Pay Cut Goes Into Effect
In The Weeds: Health Care Reform Implementation Timelines
CMS Issues Rule Extending Technical Component “Grandfather”
Highmark Updates its Cytogenetics LCD at CAP Urging
State Pathology Societies Advocate on Licensure of Laboratory Personnel
NY Assembly Health Committee Votes to Ease Physician Self-Referral Prohibitions

Congressional Lab Tour: Rep. John Barrow visits
St. Joseph’s/Candler Health System

Barrow Lab Tour Rep. John Barrow (D-GA) examined slides on a visit to St. Joseph’s/Candler Hospital’s state-of-the-art laboratory facilities recently, hosted by pathologist Anthony Hejka, MD, FCAP.

The tour focused on the important role of pathologists in health care, and included a demonstration of how pathologists use cutting-edge technology and laboratory tests at the Savannah laboratory to screen for cancer and precancerous lesions. Barrow saw a surgically-removed cancerous lung section and looked at it under a microscope. He also saw other methods of analyzing tissue samples. He saw the advanced blood analysis system.

“It was fascinating to witness the different diagnostic tests conducted on a daily basis at St. Joseph’s/Candler laboratory,” Barrow said following the conclusion of the tour. “I think everyone would benefit from a better understanding of the growing importance of pathologists and the clinical laboratory in the health care system.”

21% Physician Pay Cut Goes Into Effect

Congressional Action Expected Soon

Physicians can expect to see a 21% cut in Medicare payments for physician services provided on or after April 1, 2010. The cut is calculated using the Sustainable Growth Rate (SGR) formula mandated by Congress to determine Medicare physician payment. Congress has stepped in to avert a pay cut every year since 2003.

Technically, the last bill Congress passed to avert the pay cut expired on April 1, 2010, and the Centers for Medicare and Medicaid Services (CMS) instructed its contractors to hold off processing claims on or after that service date for 10 business days, with the expectation that Congress would again avert the cut through legislative action. While Congressional intervention is still likely, starting today CMS is required to reduce physician payments by 21.3%.

While some carriers have the capacity to hold claims for an additional day or two and still meet Medicare law’s prompt payment requirements, others will begin processing claims today at the reduced rates.

Importantly, claims for services provided on or after April 1 will not be processed all at once; rather, they will be processed on a rolling basis, with claims for services provided earliest completed first and later claims held for as long as possible. The American Medical Association has said it expects retroactive payment adjustments will be made for claims processed at the reduced rate once a new legislative SGR-fix is enacted.

A new SGR fix is currently included in bill H.R. 4851, which extends a number of high-profile programs including unemployment insurance. Senate Democrats made several attempts to pass this “extender” legislation before the Easter recess, but the process was slowed by Republican filibustering and points of order, forcing lawmakers to adjourn for a two week recess March 27 – April 11 without passing the bill. Now, with Congress back in session, the Senate is once again debating legislation to reverse the pay cut.

A Senate vote Monday night cleared a procedural hurdle that will allow a vote—expected this week—to put off the 21% cut in Medicare reimbursements until May 1. The House has already passed similar legislation.

Congress is expected to pass legislation within the week that retroactively restores payments to levels to where they were on March 31, 2010, and extends 2009 payment rates through May 31, 2010. Stateline will provide additional information on this and on resubmitting claims when details are provided by CMS.

Unrelated to this week’s down-to-the-wire action, the Congressional Research Service updated its report detailing the actions Congress has taken since 2003 to avert the physician pay cut mandated by the SGR formula to calculate physician payment. The SGR formula was adopted in 1997, but did not indicate pay reductions until 2002, when a 4.8% physician pay cut was enacted, and it has required Congressional action to avert additional (compounding) cuts each year since then. (Note: Since the Congressional Research Service does not “publish” its reports, Statline is linking to it via the BNA website. BNA is a highly respected publisher in this field.)

In The Weeds: Health Care Reform
Implementation Timelines

The recently passed health care reforms include numerous provisions to reform the health care delivery system, as well as expand access to health insurance for all Americans and introduce new revenue provisions. The Commonwealth Fund, a private foundation, has developed three very useful timelines, one for each aspect of reform, with detailed summaries of each provision.

Follow the links below to the Commonwealth Fund’s Health Care Reform Timelines

CMS Issues Rule Extending Technical Component “Grandfather”

CMS issued a transmittal last week detailing implementation of the provision included in the Patient Protection and Affordable Care Act, to retroactively extend the technical component (TC) “grandfather” from January 1, 2010 through December 31, 2010.

While extension of the TC grandfather was reported previously in Statline, the CMS transmittal communicating the implementation of the extension to the Medicare carriers was released just last week.

According to the transmittal, CMS will resume payment to independent laboratories that submit claims to Medicare for the technical component of physician pathology services furnished to patients at grandfathered hospitals, effective for claims with dates of service on or after January 1, 2010 through December 31, 2010.

Medicare Administrative Contractors (MACs) are required by July 10, 2010 to initiate an education program to notify qualifying independent laboratories of the extension.

The &38220;grandfather” provision applies to services delivered to any hospital that used an independent laboratory for TC services as of July 22, 1999, which is the date CMS proposed eliminating this payment arrangement.

Highmark Updates its Cytogenetics LCD at CAP Urging

Pathologists practicing in Jurisdiction 12 who have been denied payment for CPT Code 88342 under Highmark’s LCD #30538 which became effective March 3, 2010, can now resubmit their Medicare claims to Highmark for reprocessing. Following efforts by local CAP members and the CAP, Highmark agreed to drop CPT code 88342 from its recently implemented policy which caused denial of claims for the commonly used surgical pathology CPT code 88342.

The decision by Highmark to amend its Cytogenetics Local Coverage Decision will impact physicians in Pennsylvania, New Jersey, Delaware, Maryland and the District of Columbia.

The April 7 update came after CAP members and CAP’s LCD program staff contacted Highmark to make them aware of the problem. CAP’s LCD program provides comments to Medicare contractors on proposed LCDs, and offers assistance to CAP members whose claims are denied.

State Pathology Societies Advocate on Licensure of
Laboratory Personnel

  • State Pathology Societies in Minnesota and Missouri have reached agreement with proponents of laboratory personnel licensure legislation. Following year long negotiations in both states, proponents have agreed that licensure bills would now include the model language recommended by CAP and the State Pathology Soceities. Model criteria for licensure legislation were released by CAP in December 2008. Both bills remain under consideration in the committees with jurisdiction; although as the sessions wind down, it is possible neither bill will be passed during this session.
  • On a separate front, CAP and Georgia Association of Pathologists were successful in amending legislation that sought to remove Georgia’s laboratory licensure law, including its requirements for personnel qualifications. The amended version of the bill would retain the laboratory program, and personnel qualifications, but includes a provision to recognize national accreditation of laboratories in lieu of state inspections. CAP and GAP are working with the State on details of this provision.
  • In Louisiana, the CAP and the Louisiana Pathology Society joined forces to oppose a bill that would require clinical laboratory scientists to carry medical liability insurance. CAP President Stephen N. Bauer sent a letter urging the legislators to oppose the measure.

NY Assembly Health Committee Votes to Ease Physician Self-Referral Prohibitions

The NY Assembly Health Committee favorably reported legislation on April 13th that would weaken the State’s restrictions on physician self-referrals. The legislation is being backed by the New York State Bar Association. CAP and the New York State Society of Pathologists have been in talks with the Health Law Section of the NY Bar Association, to modify the legislation which CAP and the State Pathology Society oppose. If enacted the bill would end certain New York State prohibitions against self-referral by allowing all safe harbor arrangements specified under (federal) Stark law, but it would not explicitly recognize Stark law prohibitions.

CAP sent a letter to the Chairman of the Health Committee of the NY State Assembly this week, urging him to defer consideration of legislation on the grounds that it would alter the State’s long standing anti-self referral prohibitions and could allow financial arrangements designed to maximize profits and unnecessarily increase utilization. The letter requested a delay until both sides are able to agree on the consumer protections included in the legislation. The Chairman of the Assembly Health Committee has indicated he will continue to work with pathologists to address concerns with the legislation.

See Assembly Bill: A9933, and Senate Bill: S6955.


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