College of American Pathologists
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May 23, 2013  •  Volume 29, Number 11
Next Issue: June 6, 2013
© 2013 College of American Pathologists

In This Issue:

MoPath Interim Pricing Draws Fire from Physician/Lab Coalition

The College and a coalition of organizations representing over 120,000 medical and laboratory professionals issued a consensus statement last week urging the Centers for Medicare and Medicaid Services (CMS) to intervene with regional Medicare administrative contractors (MACs) about payment delays, claim denials, and the price determination process for the 100+ new molecular pathology CPT codes introduced this year.

CAP had recommended placing the codes on the Physician Fee Schedule and presented strong supporting documentation for PFS placement and pricing. However, the codes were published on the 2013 Clinical Laboratory Fee Schedule with payment to be determined using the gapfill pricing method. This left pricing and coverage determinations for each code up to the individual MACs. As a result there have been widespread reports of Medicare contractors denying molecular pathology test claims or paying significantly less than the former “code stacking” methodology paid for the same tests; or mischaracterizing certain tests as investigational with little or no explanation. CMS published interim molecular pathology pricing earlier this month, opening the door to a 60-day public comment period.

Specifically, the groups called on CMS to reimburse providers for tests that have been provided since January 1, 2013, and to instruct the regional Medicare contractors to share the methodologies they use to determine coverage and payment. The group also seeks to extend the reconsideration period through the remainder of 2013 to allow fine-tuning of payment levels for individual codes and recommended holding “open door forums” to allow dialogue with the laboratory community regarding the price setting process and to respond to questions.

The coalition is comprised of the nation’s leading organizations of physicians and medical laboratorians including CAP, AACC, ACLA, ACMG, AMP, ASCP, ASHI, CCLA and SIMD, whose members perform the vast majority of clinical molecular pathology testing.

CAP Lays Out HIT Concerns to Senate

Pathologists are the stewards of vast amounts of patient-specific clinical information—the very same information needed to diagnose and treat patients, and stored in their electronic health records (EHR),—yet federal initiatives promoting meaningful use of interoperable EHR systems have yet to fully recognize the vital role of laboratories in the health care delivery value equation, CAP said in comments submitted to the Senate this week.

CAP directed its comments in response to a Senate white paper titled, “REBOOT: Re-examining the Strategies Needed to Successfully Adopt Health IT”, released last month by Senators John Thune (R-SD), Lamar Alexander (R-TN), Pat Roberts (R-KS), Richard Burr (R-NC), Tom Coburn (R-OK), and Mike Enzi (R-WY). The paper outlined the Senators’ concerns with current federal health information technology (HIT) policy funded in the Health Information Technology and Clinical Health (HITECH) Act of 2009, which aimed to promote the adoption and meaningful use of HIT.

The College has been active contributor to a number of Office of National Coordinator (ONC) standards initiatives such as the Laboratory Results Interface (LRI) pilots, the Laboratory Orders Interface (LOI), Electronic Delivery of Services (eDOS) and the Laboratory Reporting Tiger Team. The senators sought feedback from key stakeholders, including CAP.

CAP’s comprehensive comments focused on the problems pathologists face from Meaningful Use (MU) requirements that were created for primary care physicians; the burden placed on laboratories that must develop interfaces between their LIS and APIS systems and multiple EHR systems; the role of pathologists as stewards of laboratory data and the need for standards that maintain the integrity of laboratory results across multiple platforms.

Meaningful Use

The MU program was established by CMS and the Office of the National Coordinator to incentivize physician adoption of interoperable EHRs. However, most pathologists could not qualify for those incentives because they could not meet the program’s one-size-fits-all, primary care-focused requirements. Now, as physicians face penalties for failing to demonstrate MU, CAP is again raising concerns about the program’s failure to account for differences in the ability of all providers to comply. CAP has already secured a hardship exception for pathologists in 2015 (the year penalties begin), but that exception is good for only one year and it is unclear what pathologists would be required to do in future years. Without flexibility built into the program, CAP is seeking a more permanent legislative fix, urging support for “The Health Information Technology Reform Act, H.R. 1309,” introduced by Representatives Tom Price MD (R-GA) and Ron Kind (D-WI). The bill excludes pathologists from receiving MU incentives or facing MU penalties.


While policymakers norm on standards for laboratory orders and reporting, providers and hospitals already rely on pathologists and their laboratories to report required data for the MU program, according to CAP. Often it is up to the laboratory to develop the interfaces between the highly specialized LIS and Anatomic Pathology Information Systems (APIS) they use and the referring physician’s EHR system. However, LIS/EHR interfaces are not covered in MU incentive payment program. Placing this burdensome requirement on laboratories without providing funding assistance creates barriers to implementing interoperable systems, particularly for smaller labs, as most laboratories must provide testing data and reports to multiple EHR systems. CAP’s letter urged Congress to work with ONC and CMS to identify funding streams to cover the costs of laboratory interfaces, particularly for smaller labs.

Pathologists are also taking on new roles where HIT intersects coordinated care. ““As EHRs and HIEs become more common, a key role for pathologists is to design the format for laboratory results in the EHR and HIE, making the format as actionable as possible,” CAP wrote.

“As laboratory data stewards, pathologists in these new payment models either have taken or are looking to take on, a leadership role in making data more accessible and more actionable by other physicians throughout the care team.” CAP believes HIEs must be multi-directional and interoperable, and the pathologist viewed not only as a source of the data but also as recognized member of the patient care team. See the CAP White Paper, Contributions of Pathologists in Accountable Care Organizations: A Case Study.

Integrity of Laboratory Results and Patient Safety

Ensuring the integrity of laboratory results across systems is another aspect of HIT policy that CAP members are working on. CAP recommends having one “official source of truth in the EHR” (e.g. one official laboratory report) that is verified by the laboratory, and from which other parts of the EHR can take necessary laboratory data. CAP believes ONC should explore certifying or verifying the functionality of receiving systems to ensure results moving from an LIS/APIS to an EHR or through an HIE are not compromised.

Read CAP’s full comments.

MedPAC Revises SGR Proposal; Lowers Pay Cuts to Specialists

As the cost of repealing the Sustainable Growth Rate (SGR) formula hovers at a bargain $139 billion, the Medicare Payment Advisory Commission (MedPAC) said it would revise its proposal to pay for repealing the SGR by making it less painful for specialists.

In 2011, MedPAC proposed funding appeal of the SGR with a 10-year pay freeze for primary care physicians, and a 5.9% pay cut for specialists each year for three years, then frozen for seven years. In written testimony submitted to the Senate Finance Committee last week, MedPAC Executive Director Mike Miller said the Commission would propose cutting specialists’ pay by 3% or less (each year for three years) based on the lower cost of SGR repeal.

“To be clear, we still believe it is necessary to have a differential between primary care services and other service in order to redress the imbalance between fees for primary care and other services,” Miller said. “However, while our 2011 recommendations included reductions for services other than primary care of 5.9 percent each year for three years, our preliminary estimate is that each of those reductions could now be 3 percent or less.”

MedPAC’s May 14, 2013 written testimony proves very interesting reading and reiterates the Commission’s previous recommendations to both Congress and CMS that the physician fee schedule must be rebalanced to shift money away from specialists towards primary care by increasing the level of payment scrutiny of services performed by specialists. MedPAC notes current efforts but calls for increased oversight “to achieve equity of payments between primary care and other specialties.” This effort has already resulted in CMS calling for the revaluation of high volume pathology services starting with payment reductions in 88305 TC earlier this year and calls to revise payments next year and beyond for immunohistochemistry, enhanced cytology, and in situ hybridization services.

Statline will continue to report on SGR reform as events unfold.

CMS Innovation Center Opens Funding For New Projects

CMS announced it will spend as much as $1 billion on new innovation awards for projects that show strong potential to reduce costs and improve care for Medicare, Medicaid and Children’s Health Insurance Program (CHIP) patients outside hospital environments.

CMS is seeking proposals that:

  • rapidly reduce costs for Medicare, Medicaid and CHIP in outpatient and post-acute settings;
  • improve care for populations with specialized needs;
  • improve clinical and financial models for specific provider types, including physician specialists and sub-specialties;
  • improve care through population-based approaches

See the official funding announcement for more details. Letters of intent will be accepted June 1 – June 28, and applications may be submitted June 14 – August 15. Innovation awards will be announced in January 2014, and the 3-year award period begins April 1, 2014.

Governor Signs EHR Donations Law in Washington State

On May 20, 2013 Governor Jay Inslee signed into law SB 5601 in Washington State which ensures that EHR donations by hospitals are allowed under state law while upholding the ban on such donations by clinical laboratories resulting from the November 2012 opinion of the State Attorney General (see Statline April 25, 2013.) The opinion of the Attorney General was successfully secured under a joint effort of the College and the Washington State Society of Pathologists (WSSP). In light of the opinion, both WSSP and CAP opposed an initial effort by the Washington State Hospital Association (WSHA) to entirely void the 2012 Opinion of the Attorney General by deferring state law to federal. After intense negotiation at the start of the legislative session, the WSHA agreed to legislation (SB 5601) that expressly ensures that all provisions of the Washington State anti-kickback law, including those forbidding such donations, continues to apply to clinical laboratories. Other provisions allow hospitals and other entities to be covered under the federal anti-kickback law and avail the current federal safe harbor for such donations, that is scheduled to expire December 31, 2013, but that may be extended under an April 2013 proposed HHS rule.

North Dakota Genetic Counselor Law Preserves Physicians’ Diagnostic Role

On April 30, 2013, North Dakota Governor Jack Dalrymple signed into law a bill (SB2131) that provides for the licensure of genetic counselors in that state that conforms to the scope of practice agreement reached between CAP and the National Society of Genetic Counselors.

The bill introduced in January of this year initially authorized a scope of practice for genetic counselors to diagnose patients for genetic conditions and interpret complex genetic tests. The CAP, in collaboration with North Dakota pathologists and the medical society, worked with the sponsor of the legislation to amend the scope of practice and remove the authority of genetic counselors to diagnose and interpret genetic tests.

North Dakota’s licensure law does empower genetic counselors to provide a broad range of consultative and coordination services to patients.

Missouri Board Denies Petition on Markups, Retracts Misstatement

The Missouri Board of Registration for the Healing Arts, whose denial of a petition from CAP and the Missouri Society of Pathologists (MSP) to outlaw markups on anatomic pathology services was based, in part, on opposition by some physician groups, has retracted its finding that the Missouri State Medical Association was among the groups opposed. In fact, the MSMA adopted a strictly neutral position on the issue.

The issue arose when the College and the Missouri Society of Pathologists (MSP) petitioned the Board to outlaw markups on anatomic pathology services, issuing a formal request for rulemaking under §536.041, RSMo Supp. 2012, RSMo. Prior to holding a hearing and gathering input from other physician groups, the petition request was reviewed and summarized by Counsel to the Board in a publically released report. On May 14th the Board communicated its decision in a letter to MSP denying the request. The Board noted opposition from other physician groups, and said further action would not be necessary since current statute would permit it to prosecute a physician who was unethically ‘marking up’ bills. Pursuant to requirements of the petition law, the Board reported its finding to the Legislature’s Joint Committee on Administrative Rules.

The CAP and MSP have partnered for several years to advocate an end to physician markup of anatomic pathology services in the state. Although these efforts have to date been unsuccessful, both organizations agreed that misrepresentation of MSMA’s neutral stance was important enough to future advocacy efforts to seek and get a written retraction from the Board.


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