College of American Pathologists
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  STATLINE — CAP’s Bi–Weekly Federal and
  State Advocacy E–Newsletter

June 10, 2010  •  Volume 26, Number 12
Next Issue: June 24, 2010
© 2010 College of American Pathologists

In This Issue:

Senate Considers Two SGR Proposals—19-Month or 3-Year Patch?
Congressional Lab Tours
PECOS Enrollment Deadline Looming on July 6
IL, LA, and NY Legislators Consider Out–of-Network Legislation
Informed Consent for Genetic Testing Now Law in South Carolina
Georgia’s New Accreditation Law Maintains Licensure Provisions
Kennedy, Eshoo Introduce Long-Awaited Genomics Bill
CDC to Fund Molecular Genetic Testing Pilot Project
Call for Applications: Medicare Multi-Payer Demo
CMS Reveals Early Details on 2012 ACO Demonstration
NIH Seeking Comments on Genetic Testing Registry

Senate Considers Two SGR Proposals—19-Month or 3-Year Patch?

Congress returned from a weeklong recess to confront the unresolved 21 percent physician payment cut, which could become a reality when CMS’s 10-day claims process hold expires on June 15. Update: CMS officials have since announced a three-day extension on the hold. Unless Congress acts, carriers will begin processing claims with the 21% cut on Friday, June 18th.

As Statline went to press, the Senate continued to debate an amendment to the bill passed by the House of Representatives before the Memorial Day recess, H.R. 4213. The amendment was introduced by Finance Committee Chairman Max Baucus (D-MT). Similar to the House bill, the Senate amendment included a 19 month patch for the SGR—specifically, a 2.2% increase for the rest of 2010 and 1% increase for 2011.

In addition, an alternative SGR proposal is expected this week from Sen. Debbie Stabenow (D-MI). She is reportedly the lead sponsor of an amendment proposing a 3.5-year SGR patch. This amendment is expected to contain a 1.3% update effective June 1 for the remainder of 2010 and then an additional 1% updated for 2011. From 2012-2013, annual updates would be based on two separate payments methods, specifically one for primary care physicians and one for all other specialties. However, updates for both categories cannot be negative in either of those years. During this period, physicians in Accountable Care Organizations (ACO) may elect to establish specific spending targets in lieu of national spending targets. Following 2013, rates return to levels determined by the current SGR system. Rates will not be “hardcoded”, so Congressional action will be needed and permitted to reverse any proposed cuts.

It’s unclear, however, whether Senate leaders have the votes to pass this 3.5-year SGR “fix.” Right now, it appears that a vote will likely happen next week in the Senate. But even if a bill passes the Senate, it will have to return to the House for consideration, meaning that the law will not be signed until after the June 15 moratorium on CMS claims processing expires.

The uncertainty over the future of SGR coincides with the AMA’s 2010 Annual Meeting of the House of Delegates in Chicago, which begins June 12 and concludes on June 16. CAP and the AMA have been pushing for a permanent SGR fix. With the SGR unresolved, this issue will likely be the focus of intense debate at the meeting. Watch for reports from the AMA meeting in the June 24 issue of Statline.

Congressional Lab Tours

Sen. Isakson (R-GA) Visits Hamilton Med Center

Isakson Lab TourSen. John Isakson (R-GA) toured Hamilton Medical Center in Dalton, Georgia, where he praised its “state-of-the-art” pathology laboratory and its staff.

“The equipment is fantastic…and I was really impressed by the attitude of the lab technicians and the pride in what they do,” Isakson told The Daily Citizen, a Dalton newspaper. The lab has 64 employees, and performs an annual volume of just under one million tests a year.

Kathryn Knight, M.D., who directs the anatomic pathology testing facility, led the tour. Knight is also Vice Chair of CAP’s Federal and State Affairs Committee (FSAC).

Knight also discussed some of CAP’s legislative priorities with the senator, namely a permanent SGR formula fix for Medicare physician payments and removal of anatomic pathology services from the Stark law’s in-office ancillary services exception.

Sen. Ensign Tours Quest’s Las Vegas Facility

Ensign Lab Tour In early June, Sen. John Ensign (R-NV) toured Quest Diagnostic’s Las Vegas regional lab to get a frontline perspective on the vital role that pathology plays in patient care. CAP members Galen Eversole, M.D., the medical director of this Quest facility; Joseph Khoury, M.D., and David Mulkey, M.D. led the tour.

“The work being done at Quest Diagnostics is really remarkable,” said Ensign. “You are eliminating the excruciating wait times for many who may be facing a difficult diagnosis by providing lab results as quickly as possible. I thank you for the service that you provide for the people of Nevada.”

Dr. Khoury spoke with the senator about the complexities entailed in the diagnostic work-up of pathology cases, along with the rigorous system of quality controls and quality assurance.

Dr. Eversole explained to Ensign that by conducting health assessments for common conditions such as diabetes and heart disease, pathologists enable people to better manage their health. “We were very grateful to the senator for giving us the opportunity to display our advanced technologies,” he said, “and demonstrate the critical role our pathologists and laboratory play in providing diagnostic expertise to aid therapeutic decision making for optimum patient care.”

PECOS Enrollment Deadline Looming on July 6

The deadline is less than a month away on July 6 for physicians who order or refer imaging, laboratory, and specialist services to enroll in the CMS’s Internet-based provider system. While the date to enroll in the Provider Enrollment, Chain and Ownership System (PECOS) was originally Jan. 3, 2011, this date was moved up to early July under the new health care law.

CAP, AMA, and other medical specialty groups have requested that the early July deadline be applied only to physicians who refer durable medical equipment (DMEPOS) and home health services, according to a letter submitted to CMS on May 28. Federal officials are under pressure to combat fraud in these areas, but including lab and radiology service providers in this deadline does not provide sufficient time for implementation, the letter explained.

IL, LA, and NY Legislators Consider Out–of-Network Legislation

Lawmakers from several states are intent on changing how out-of-network providers can bill for services. State representatives in Illinois are considering legislation applicable to facility-based physicians like pathologists and radiologists who provide services to a patient at a contracted facility but who are unable to negotiate out-of-network reimbursement rates with insurers. Under the legislation, if negotiations fail between insurer and provider, then either party can initiate arbitration through the state’s Department of Insurance.

This bill is a departure from current state regulations, which require the insurer to reimburse the out-of-network provider who is billing a patient for the balance of charges for services provided when the patient has made a good faith effort to use an in-network provider. But under the proposed bill, a patient would have the choice to assign benefits to a provider or be responsible for an out-of-network charge. The arbitration would occur if the insurer and provider cannot agree on a reimbursement rate.

The proposed bill (HB 5085) has passed both the state Senate and House, but was amended in the Senate. Now the House needs to concur on these amendments. CAP and the Illinois Society of Pathologists have concerns with the legislation and are working with the Illinois State Medical Society to resolve them. For example, CAP proposed an amendment that would limit the bill to in-patient services, and a provision to exclude non-covered services from arbitration.

New York, Louisiana Consider Bills

CAP has also been advocating to amend out-of-network legislation in New York. The College recently worked with the New York State Society of Pathologists (NYSSPath), the Medical Society of New York, and the New York State Clinical Laboratory Association, to successfully amend a state Senate bill (SB 6320C). The amendment deleted language in the bill that would have subjected all clinical laboratories and laboratory physicians to in-network reimbursement rates. In New York, out-of-network rates are often higher than in-network rates, so clinical labs would not have benefitted from the legislation, according to a comment letter submitted by CAP. CAP and NYSSPath successfully removed similar language from a bill introduced last year.

A different aspect of out-of-network services is balance billing transparency, which is the focus of a bill that has passed the Louisiana state Senate as well as the state House Committee on Insurance. The legislation—SB 732—involves notification and disclosure provisions. The bill now goes to the full state House to await final passage.

If the state enacts this bill, insurers must notify patients that they will be billed for the balance of services provided by out-of-network physicians, including pathologists. Under the disclosure aspects of the bill, health care facilities must notify patients whether the facility is a participating non-emergency provider contracted with their insurer. If an out-of-network facility-based physician bills a patient for a covered service, the physician must provide the patient an itemized list of services, including date of service and related charges.

Whatever the future for each of these bills, this issue continues to capture the attention of state legislators. In March 2010, the National Conference of State Legislators proposed a balance billing disclosure model legislation. Stay tuned—Statline will continue to follow this developing issue in states.

Informed Consent for Genetic Testing Now Law in South Carolina

South Carolina’s Gov. Mark Sanford (R) has signed into law a bill (SB 1224) featuring provisions requiring treating physicians ordering genetic tests to obtain informed consent from the patient. These informed consent provisions are part of a larger bill focused on health insurance coverage for minors and dependents.

Some of the bill’s original informed consent language concerned CAP, because it would have made the performance of the genetic test unlawful without possession of informed consent by physicians, like pathologists, who perform genetic tests but do not directly see patients. The signed law includes an amendment developed by CAP, the South Carolina Society of Pathologists, and the Medical Society of South Carolina, that includes an exception if the test is performed by a clinical laboratory that has received a specimen referral from the patient’s treating physician or another laboratory.

Georgia’s New Accreditation Law Maintains Licensure Provisions

Gov. Sonny Perdue (R-GA) recently signed into law (HB 994) an accreditation bill including an amendment preserving the state’s laboratory licensure law and requirements for personnel qualifications. Certain language in the original bill sought to remove the licensure and personnel requirements. However, CAP and the Georgia Association of Pathologists (GAP) worked on amending language that retains these requirements, and includes a provision to recognize national accreditation of laboratories in lieu of state inspections. The College and GAP are working with state officials on the provision’s implementation.

Prior Georgia law recognized accreditation of laboratories to satisfy that state’s licensure requirement, but the authority was never exercised. However, a new agency—called the Georgia Department of Community Health—will now manage the laboratory licensure program. Pursuant to this new law, this agency will begin formally recognizing accreditation entities this summer. The College anticipates applying for recognition under these regulations.

In related news, last year California passed a law (SB 975) establishing a formal process for state recognition of laboratory accreditation in that state. The law provides a statutory deadline of Jan, 1, 2011, for the Department of Public Health to begin accepting applications of laboratory accreditation organizations for formal recognition, provided the standards of such organizations are “equal to or more stringent than, state requirements for licensure and registration.”

Kennedy, Eshoo Introduce Long-Awaited Genomics Bill

At the end of May, Representatives Patrick Kennedy (D-RI) and Anna Eshoo (D-CA) introduced the Genomics and Personalized Medicine Act (H.R. 5440), a bill with broad implications on diagnostic testing and the advancement of personalized medicine. The bill was referred to the Committee on Energy and Commerce.

While CAP leaders are currently reviewing the legislation, a preliminary analysis reveals that the bill has two main goals: generating recommendations for effective, rational regulation of genetic tests, including laboratory developed tests; and promoting research, development and use of genetic tests, including workforce and training.

While the bill does not mandate any particular regulatory model for genetic tests, it establishes a process that could lead to regulation that is more comprehensive by requiring reports from certain government agencies, the Institute of Medicine (IOM), and advisory committees to Congress and HHS on how to promote and regulate genetic tests. In addition, the bill also establishes a new Office of Personalized Healthcare (OPH) within HHS, a Committee on Evaluation of Genomic Applications in Practice and Prevention (CEGAPP), and a Committee on Public Engagement (COPE). These new entities are designed to provide recommendations on a vast array of genetic testing issues, including coverage and payment policies, clinical and analytic validity, research and workforce challenges, along with the eradication of unnecessary and overlapping genetic testing regulations, including regulations affecting laboratory developed tests. Finally, the bill creates a national biobank and provides grants to accelerate genetic testing research and workforce training.

Previous editions of Statline highlighted the College’s lobbying efforts on certain key provisions that prompted concern in earlier versions of the bill:

  • Ensuring that the bill’s definition of “genetic test” appropriately differentiates between genetic and somatic mutations.
  • Maintaining voluntary participation in a genetic test registry.
  • Eliminating the expert, public-private panel to advise CMS on appropriate ways to reimburse genetic tests.

As a result of CAP’s lobbying efforts, Representatives Kennedy and Eshoo revised the definition of genetic tests to reflect the differences between genetic and somatic mutations, as well as completely eliminated provisions that would have created a voluntary registry and a new CMS panel.

CAP’s Advocacy Office in Washington, D.C. continues to work closely with Rep. Kennedy’s office and the Personalized Medicine Coalition (PMC) to ensure that the College can support the legislation.

CDC to Fund Molecular Genetic Testing Pilot Project

The CDC is looking for applicants for a molecular genetic testing pilot project to improve clinical and/or laboratory practices in health care delivery systems.

The agency will provide funding to laboratories to evaluate an existing clinician-friendly molecular test report. The lab will determine whether changes in clinical and laboratory practices might improve the quality of patient care within a healthcare delivery system. This system can be a fee-for-service network, health maintenance organization, academic medical center with outreach clinics, or similar entity with a diverse but defined patient population. The project will produce clinical and laboratory practice recommendations and a feasible implementation plan for targeted health care delivery system.

The application deadline is July 7. Additional information can be found here.

Call for Applications: Medicare Multi-Payer Demo

CMS officials invite states to apply for a patient-centered medical home demonstration project under the direction of the Center for Medicare and Medicaid Innovation that was authorized by the health care reform law. The center must be in place by Jan. 1, 2011.

This demonstration, called the “Multi-Payer Advanced Primary Care Practice Demonstration”, will involve at least six states. The project is focused on bringing Medicare, Medicaid, and private insurers together to assess the effect of advanced primary care practice—more commonly referred to as the medical home. Medical home, as well as models such as accountable care organizations or ACOs, are currently being touted by the Obama administration as a way to reform health care delivery systems.

Applications are due to CMS no later than Aug. 3. Comprehensive information is available in the Demonstration’s solicitation document.

CMS Reveals Early Details on 2012 ACO Demonstration

Medicare officials from the Office of Legislation recently released preliminary details on the participation requirements and shared savings qualifications for the government-sponsored accountable care organization (ACO) demonstration planned for a Jan. 1, 2012 launch. Congress charged CMS with implementing an ACO under the health care reform law.

In the question-and-answer memo, CMS officials define an ACO as “an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.” To participate in the demo, facilities must serve a minimum of 5,000 Medicare beneficiaries with an adequate number of primary care professionals and agree to participate for the duration of the program—a minimum of three years.

Of course, sharing in cost savings is one of the primary drivers of reforming health care delivery systems through models such as ACOs. For the Medicare program, participating ACOs that meet specified quality performance standards are eligible to receive a percentage of any savings if the beneficiaries’ expenditures are below a specified benchmark amount. Calculations for each ACO’s benchmark will be based on the most recent available three years of Medicare beneficiary expenditure data for Parts A and B services.

CMS officials also announced plans to hold a listening session this summer to hear stakeholder ideas on ACOs. Details on the listening session are expected to be posted on on June 11.

NIH Seeking Comments on Genetic Testing Registry

The 30-day comment period for the NIH’s voluntary Genetic Testing Registry is now open through July 10. In a request for information notice posted in the Federal Register on May 28, the agency stated that it was looking for comments on what types of tests should not be included in the registry, some of the potential uses of the registry, the potential risks and benefits associated with facilitating public access to this type of information, and many other issues. For more information on the registry, visit the NIH website.


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