College of American Pathologists
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April 29, 2010  •  Volume 26, Number 9
Next Issue: May 13, 2010
© 2010 College of American Pathologists

In This Issue:

SGR Update: House Proposal Could Extend Physician Pay Cut Freeze Until Sept. 30
Recent Meetings Prompt MedPAC to Take a Closer Look at Self Referral Issues
Statline Focus: Forthcoming Kennedy Bill Gives CMS Prominent Role in Genetic Testing Reimbursement Determination
Imminent Supreme Court Decision Could Complicate Gene Patent Case
Direct Billing Legislation Passes in Tennessee
CAP Joins Medical Groups in Urging Joint Commission to Rescind Physician Definition Revision
Former CMS Head Mark McClellan, PBS NewsHour’s Mark Shields to Headline CAP’s 2010 Policy Meeting

SGR Update: House Proposal Could Extend Physician Pay Cut Freeze Until Sept. 30

The next deadline to reverse the impending 21% physician payment cut is coming up fast on May 31. However, there is a bill that would extend the freeze on the sustained growth rate (SGR) reduction until Sept. 30. The American Workers, State, and Business Relief Act of 2010 (H.R. 4213) was passed in the Senate on March 10, but the House of Representatives has yet to act on the legislation.

CAP, the AMA, as well as other medical societies have been pushing for a permanent repeal of the SGR formula in favor of a new payment system as defined in the Medicare Physician Payment Reform Act of 2009 (H.R. 3961). This legislation—currently stalled in the Senate—would provide a Medicare Economic Index update rather than a 21.2% cut. In addition, the bill would eliminate all SGR-associated debt accumulated after years of temporary fixes, as well as establish two new updates with different spending targets.

Recent Meetings Prompt MedPAC to Take a Closer Look at Self Referral Issues

In mid-April, CAP met with Medicare Payment Advisory Commission (MedPAC) Deputy Director Jim Matthews to discuss the impact that improper anatomic pathology (AP) arrangements can have on overutilization of testing services. As a result, the MedPAC staff requested information on certain AP CPT codes that should be excluded from CMS’s in-office ancillary services (IOAS) exception. While the Stark law prohibits physicians from making referrals to facilities where the physician or a member of the physician’s immediate family has a financial relationship, there are certain exceptions to this law. The IOAS is one exception, which was originally intended to provide patient convenience for simple clinical laboratory tests.

CAP was joined at the April meeting by other members of the In-Office Ancillary Services (IOAS) Coalition. Because AP testing cannot be completed in time to aid in the physician’s diagnosis while the patient is in the office, the Coalition is urging its removal from the IOAS exception. The Coalition’s position is also supported by various other state pathology groups, including the Connecticut Society of Pathologists, who also recently met with MedPAC officials.

The self-referral issue will appear in MedPAC’s summer report; however this report will not include any recommendations on changes to self-referral regulations and the IOAS exception to Congress. The earliest these would occur would be in March and June 2011.

Statline Focus: Forthcoming Kennedy Bill Gives CMS Prominent Role in Genetic Testing Reimbursement Determination

Critics Warn Expert Agency Panel Could Circumvent AMA-CPT Workgroup

A draft of Rep. Patrick Kennedy’s (D-R.I.) forthcoming Genomics and Personalized Medicine Act of 2010 establishes a new public-private expert panel that would make recommendations to the CMS Administrator on reimbursement rates and coverage policies for genetic tests and genomic testing services. This group is expected to be comprised of 18 individuals—including one pathologist specializing in molecular genetics—who are appointed by the HHS Secretary. Their primary task is to encourage CMS to approve new CPT codes for genetic tests through the Healthcare Common Procedures Coding System (HCPCS).

The creation of this public-private expert panel, as well as some other provisions of the bill, has prompted concern from CAP. The establishment of this panel is significant because reimbursement levels have historically been determined by an AMA-CPT workgroup. CAP opposes this aspect of the bill, as the CMS panel would circumvent the current CPT and HCPCS process. There is also concern that unlike the current AMA-CPT workgroup, all relevant stakeholders—including pathologists—might not be included in the CMS panel. This exclusion could lead to unfavorable coding and reimbursement decisions for pathologists.

Call for Genetic Test Registry

Kennedy’s legislation also calls for a public, voluntary registry of genetic tests that would provide information directed to patients and providers on analytical and clinical validity, as well as clinical utility of this testing technology. In addition, the bill directs the HHS Secretary to establish a committee to conduct comparative analysis of laboratory review requirements under CLIA, FDA, and non-federal laboratory certifying entities. Throughout the next year, this committee would then hold public meetings and report on its findings to the Secretary.

While CAP is not opposed to a voluntary public registry, it is opposed to a mandatory registry. In addition, the College is concerned that the Laboratory Review Requirements Committee and its analysis report would be duplicative of the organization’s ongoing effort to create a laboratory-developed test policy with FDA and CMS.

The creation of a voluntary registry was just announced by the National Institutes of Health (NIH) in mid-March. This registry will be developed and maintained by the NIH’s National Center for Biotechnology Information at the National Library of Medicine.

Many groups, including Johns Hopkins University’s Genetics & Public Policy Center (GPPC; Washington, DC), have called for a genetic testing registry. However, GPPC has been pushing for a mandatory registry; one with which all that testing manufacturers and laboratories offering these tests would be required to comply.

One of the lead NIH officials behind the voluntary registry is Kathy Hudson, PhD, who was formerly Director of the GPPC. Hudson is now Chief of Staff in the NIH’s Office of the Director. In an e-mail to Statline, she said that she recognize that some stakeholders (such as her former initiative) feel that a mandatory registry is needed. However, she feels that most test providers will be eager to list their test in this registry. “We expect it to become ‘the’ resource for physicians and patients considering genetic testing,” Hudson wrote. When asked about what tests the registry will contain, she said that the NIH will be seeking input from all of the key experts and stakeholders, and will be putting out a request for information asking for input on this issue.

While GPPC’s Director Joan Scott said that the NIH initiative is a good start, she is concerned that a voluntary registry will contain significant gaps for patients and providers. “But this is a good beginning, because part of the difficulty is getting a backbone and structure together, as well as the informatics muscle established to get it off the ground,” Scott told Statline. In an article the August 2009 issue of Public Health Genomics entitled “Developing the Blueprint for a Genetic Testing Registry”, Scott and attorney Gail Javitt indicated that the NIH would be the ideal agency to oversee a mandatory genetic test registry.

However, it’s unclear whether there is an incentive for getting testing manufacturers and providers to participate in a voluntary registry, particularly if providers are concerned about publicizing proprietary information about their testing products. Scott said that while the registry can’t be too onerous, there must be a mechanism in place to protect proprietary information. “There has to be enough transparency to convey information on clinical validity and utility to patients and providers, but provide proprietary protection,” she explained. “I think there’s a way to meet all of these needs, and this voluntary effort at NIH is a good beginning.”

Genetic Testing Defined

Another key issue in Kennedy’s proposed bill is how the legislation defines genetic tests. The language follows the definition in 2008’s Genetic Information Nondiscrimination Act (GINA), but makes no differentiation between genetic and somatic tests (genetic refers to DNA composition established prior to birth; somatic refers to any changes to DNA that occur after birth). Many health care provider organizations, including CAP, believe that these distinctions must be defined in the legislation. However, other stakeholders worry that any change in definition could ultimately weaken the protections offered under GINA. In addition, CAP is working to ensure that testing using immunohistochemistry technology is not excluded from the definition.

Stay tuned—Statline will continue to closely follow this developing story.

Imminent Supreme Court Decision Could Complicate Gene Patent Case

Certain aspects of the recent federal court decision invalidating some of Myriad Genetics’ patents claims on genes BRCA 1 and BRCA 2 could be challenged depending on a forthcoming ruling from the U.S. Supreme Court on Bilski v. Kappos.

The Supreme Court will be looking at the method issues involved in this patent case. Prior to issuing this most recent decision, one aspect that Judge Robert Sweet of the U.S. District Court for the Southern District of New York considered was Myriad’s patent on its testing method. Sweet ruled that this patent did not pass the “machine or transformation” test that is currently applied to patenting method claims. In order to pass this test, the method must be tied to a particular machine or bring about a tangible transformation of some sort. Salt Lake City-based Myriad is currently appealing this decision to the Federal Circuit Court.

This machine or method test comes from the Bilski case, which is currently under review by the Supreme Court. Therefore, the court’s ruling on this case is likely to impact Myriad’s appeal. Or not, according to Dan Vorhaus, Editor of the Genomics Law Report blog and an attorney specializing in genomic and biotechnology issues at Robinson, Bradshaw & Hinson, in Charlotte, N.C. “Bilski may not impact Myriad at all if the Supreme Court rules narrowly and restricts its opinion to business methods, as the patent in Bilski is for a method of commodities hedging, not biotechnology,” he explained. “If the Supreme Court rules more broadly, one possibility is that it would decide to tighten–or loosen—the machine or transformation test in a way that would impact biotechnology patents, particularly therapeutic and diagnostic method patents.”

Vorhaus went on to explain that these types of patents are important to many biotech companies, including Myriad, so the Bilski ruling could impact the validity of such patents moving forward. “Whatever the outcome in Bilski, it is likely to play a role in how the Federal Circuit reviews Judge Sweet’s ruling on Myriad’s diagnostic method patents when it hears the appeal,” he added. “However, because the Bilski litigation does involve method patents, it is highly unlikely to have any bearing on Myriad's gene patents.”

Becerra to Reintroduce Gene Patent Ban Bill

Shortly after Judge Sweet issued the Myriad decision, Rep. Xavier Becerra (D-Calif.) announced that his office would be reintroducing legislation to ban prospective gene patents. The bill is expected to be introduced in the House before the Memorial Day recess. “I will once again introduce legislation banning gene patenting to ensure patients’ access to their own medical information, reduce the costs of gene tests, and increase scientific research into personalized medicine,” he said in a statement.

The legislation’s primary supporters include scientific and profession associations, as well as civil rights, environment, and patient groups. The primary opponent is the Biotechnology Industry Organization, or BIO, whose members include biotechnology and pharmaceutical firms. Many of these firms have existing patents and want to continue patenting DNA, as well as develop diagnostic tools and therapies based on these patents.

Direct Billing Legislation Passes in Tennessee

Direct billing legislation that will protect patients against “markup” charges by physicians who order but who do not perform AP services has been passed by the Tennessee legislature. Following a technical reconciliation between the state House and Senate versions, the legislation will be on its way to the desk of Gov. Phil Bredesen (D), who is anticipated to sign the bill into law.

The bill (H.B. 2367/S.B. 1204) prohibits a physician who orders AP testing services from marking up charges performed or supervised by another physician by specifically requiring the physician or laboratory that performed or supervised the service to bill directly to the patient or payer. For the uninsured, referring physicians are able to bill for AP services if they provide a written disclosure of actual charges to the patient and provided that the physician does not, directly or indirectly, markup or increase the actual amount of such charges. In addition, following a negotiated compromise, gastroenterologists have until July 1, 2014, to comply with the direct billing law for AP services.

CAP and the Tennessee Society of Pathology have been advocating for this legislation over the past seven years. This most recent bill follows the passing of a disclosure law of AP services in 2004, as well as enactment of direct billing lfor cytopathology services in 2006. .

CAP Joins Medical Groups in Urging Joint Commission to Rescind Physician Definition Revision

The CAP, AMA, as well as numerous other medical societies are pressuring The Joint Commission to rescind its July 2009 revision that expands the accrediting body’s definition of who is defined as a physician.

The Joint Commission changed its physician definition to align more closely with CMS’s definition. However, critics argue that the revision is likely to cause confusion among patients, hospitals, and administrators. There is also concern that this shift could have ultimately have a negative impact on reimbursement and coverage decisions related to providers. CAP, AMA, and a number of provider groups recently expressed these concerns in a letter to The Joint Commission President Mark R. Chassin, MD.

“We strongly believe the term “physician” is a descriptor that should be limited to individuals who have received a Doctor of Medicine or a Doctor of Osteopathic Medicine degree, or an equivalent degree of medicine following successful completion of a prescribed course of study from an international school of medicine,” reads the letter. “There is a movement among many healthcare providers to refer to themselves as ‘doctor.’ In a healthcare environment, our patients understand the terms ‘doctor’ and ‘physician’ to be synonymous. We owe them every effort to recognize this perception and to minimize, not increase, misleading nomenclature.”

Former CMS Head Mark McClellan, PBS NewsHour’s Mark Shields to Headline CAP’s 2010 Policy Meeting

Navigating health care reform implementation challenges for pathologists will be one of the central themes of the upcoming Annual Policy Meeting, to be held May 10-12, in Washington, DC. The meeting’s keynote speakers will include former CMS Administrator Mark McClellan, MD, PhD, who is now the Director of The Brookings Institution’s Engelberg Center for Health Care Reform; The Hotline’s Editor-in-Chief Amy Walters; and PBS NewsHour’s Mark Shields. Current CAP President Stephen N. Bauer,MD, will deliver a dinner keynote on Monday, May 10, about the College’s transformational role during this time of monumental change in health care.

In addition to the keynote sessions, there will be breakout sessions addressing state presidents and grassroots advocacy issues.

While registration is now closed for this event, Statline will be reporting on news from the meeting in the May 13 issue, or readers can follow us on Twitter @CAPDCAdvocacy. For press registration, please contact Jodi Greenblatt at 202-354-7102, or by e-mail.


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


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