College of American Pathologists
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June 21, 2012  •  Volume 28, Number 13
Next Issue: July 5, 2012
© 2012 College of American Pathologists

In This Issue:

Supreme Court Watch: Anticipation Mounts for Reform Ruling

With the Supreme Court’s ruling on the constitutionality of the health care reform law expected any day, the College joins the rest of the country in anxiously awaiting this landmark decision.

Once the decision is announced, the College will monitor any potential impact on pathologists. The College believes, however, that delivery system reforms are progressing and will continue to advance, regardless of the ruling. “The underlying issues driving reform—the need to improve patient care and reduce costs—remain as pressing today as they were before passage of the health care reform law two years ago,” said CAP President Stanley J. Robboy, MD, FCAP.

Watch for future Statline alerts for news on the ruling and continuing coverage on the future of the health care reform law.

TC Grandfather Will Expire June 30; CAP Resources Available for Members

After more than 10 years of CAP successfully advocating Congress to extend the technical component (TC) grandfather provision, the provision which has benefitted so many patients in rural and underserved areas will expire at the end of June. This means that certain pathologists and independent laboratories providing the TC of physician pathology services furnished to hospital patients may no longer bill for and receive direct Medicare payment for these services on and after July 1, 2012.

The College has prepared several online resources to help members plan for the provision’s expiration, particularly regarding service agreements (see below). It is important to note when creating and/or negotiating these agreements that CMS is currently reviewing the TC component of 88305. The outcome of this review is currently unknown and practices will want to position themselves for the outcome of this review due to be put in place for 2013.

The College advocated for the permanent extension of the TC grandfather to hospitals. However, Congress has failed to extend the provision and is not expected to revisit this issue.

State Society Leaders Collaborate on Transformation Strategies at CAP 2012 Leadership Conference

Never mind that lawmakers continue to debate the health care reform law on Capitol Hill while the Supreme Court Justices’ mull the law’s future, implementation is hitting its stride at the state level. This rapidly changing reform environment places a greater emphasis on strengthening the alliance between state societies and the College. Strategies on how to promote this alliance, as well as heighten the visibility of state societies, were the focus of this year’s 2012 CAP State Pathology Society Leadership Conference.

CAP’s Member Engagement Strategy

The CAP Member Engagement Strategy is focused on seeking new opportunities to enable members to connect at the local, state, and federal level to raise the profession’s visibility.

The Strategy’s programs include the Peer2Peer Practice Roundtable, laboratory tours for state or federal elected officials, CAP’s See, Test & Treat™ program, as well as Advocacy and grassroots mobilization activities.

For the first time, this meeting of 26 state pathology leaders was held outside Washington, DC, in Chicago. The June 9 meeting mobilized state leaders through in-depth presentations on how to partner with CAP’s Advocacy office in DC on regulatory and state legislative issues. Attendees also learned from fellow state pathology leaders about “best practices” on promoting state societies, as well as heard about how the College’s Case for Change and Transformation Initiative is working to ensure that pathologists have a clear role in new health care delivery models, such as coordinated care, and emerging technologies in the realm of genomic medicine and molecular diagnostics.

The meeting was also an important opportunity for state society leaders to network with colleagues and engage with CAP leadership and staff about their challenges. In his opening address, Richard Friedberg, Chair of CAP’s Council on Government and Professional Affairs, revealed that the three primary challenges facing state society leaders are supporting advocacy initiatives, securing new members, and communicating with members, according to results from a pre-meeting survey.

In addition to these issues, Dr. Friedberg noted that shrinking reimbursement, market consolidation, and changing technology are also exerting pressure on pathologists, pressure that will only increase as health care reform implementation ramps up at the state level. “With the implementation of the federal health care law, and state initiatives, we face many challenges to our profession,” he said. “But we also face future opportunities, and as pathologists, we need to embrace these forthcoming changes.”

Reform Demands Change

State Pathology Meeting - 2012 Health care reform requires adaptation, explained Paul Valenstein, MD, FCAP, in his presentation, “The Case for Change and the Transformation Initiative.”

“As reform implementation accelerates, particularly at the state level, pathologists will need to adjust our individual practices—what we do during the day—as well as adapt our groups and departments—how we operate and are governed,” explained Dr. Valenstein, who is Secretary-Treasurer of the College, adding that this is also a priority for the CAP (see box). “Adapting to reform means assessing the services you offer and the setting in which you practice, and then expanding your scope of practice to provide new value in this evolving ecosystem.”

Adapting also means engaging the constituencies with which we interact, Dr. Valenstein reiterated. “We engage patients when we join patient advocacy groups, and we engage the public when we participate in CAP’s See, Test, & Treat Program or give a laboratory tour to lawmakers and opinion leaders,” he added. “Through these types of actions, we raise our profile and position ourselves as physician leaders.”

CMS to Begin Enforcing HIPAA Version 5010 on July 1

CMS will begin enforcing compliance with use of version 5010 of the Health Insurance Portability and Accountability Act (HIPAA) electronic transactions on July 1 when the current grace period ends on June 30. Enforcement was originally set for Jan. 1, 2012, but was delayed due to concerns that the industry was still experiencing implementation problems.

The agency has announced, however, that Medicare fee-for-service will be allowing an additional 30 days—until August 1—only to move electronic remittance advice transactions to the 5010 version.

For more information, see the AMA’s site on Version 5010 electronic transactions.

CAP to Ways and Means: Rewarding Quality, Removing HIT Barriers Key to Reform

Incentivizing pathologists for reducing costs and improving quality in coordinated care organizations, as well as removing health information technology (HIT) barriers in these models, should be central to payment and delivery system reform, the College explained in a letter sent to members of the House Ways and Means Committee on June 20.

House Ways and Means Committee members are seeking input on ways to reform and improve how Medicare pays physicians and delivers patient care. Committee Chairman David Camp (R-MI) sent a letter to physician organizations, including CAP President Stanley J. Robboy, MD, FCAP, requesting feedback on ways to reduce costs and improve quality, including development of value-driven, coordinated care models.

The CAP letter was in response to specific questions put forth by the Committee on how best to reward quality and efficiency and alternatives to fee-for-service reimbursement. The letter emphasized the role of the pathologist in driving effective use of diagnostic tools to help reduce health care costs and enhance patient outcomes. This includes providing incentives for pathologists to guide appropriate test selection, while promoting their participation as full partners in these models. “Current Medicare policy does not support this added value, creating the potential for overutilization of testing and lack of understanding about test results, optimal therapies and follow-up testing,” continued the letter.

The College also asked Congress to close the loophole in the physician self-referral law for anatomic pathology services, stressing that this is critical to addressing volume-based incentives that only run up the cost of health care for Medicare and its beneficiaries.

Senators Hear Payer Perspectives

A recent Senate hearing indicates that reforming Medicare physician payment through incentivizing providers in coordinated care models is at the forefront of lawmakers’ minds. On June 14, the Senate Finance Committee held a roundtable discussion on the private sector’s perspective on these reforms. Throughout the hearing, private payer executives—from CareFirst BlueCross BlueShield, BlueCross BlueShield of Massachusetts, Aetna, and Humana—told committee Chairman Max Baucus (D-MT) and ranking member Orrin G. Hatch (R-UT) about efforts to shift from a volume-based to a team-based approach with provider incentives for positive outcomes.

One of these efforts described during the hearing was the Humana-Norton Healthcare System ACO pilot, sponsored by the Dartmouth Institute for Health Policy and Clinical Practice and the Engelberg Center for Health Care Reform at the Brookings Institution. The Brookings-Dartmouth ACO Network, of which the CAP is a member, is an outgrowth of this collaboration. “Already, the partnership has shown significant results,” stated the testimony of Peter Edwards, Humana’s President, Provider Development. “Our most recent data, based on Year-Two outcomes, showed marked improvement relative to baseline in quality, utilization and physician visits following hospitalization.” Specific to the laboratory, diabetes-A1c testing rates are up 6.1% and cholesterol management in diabetes patients is up 8.6%, according to Edwards’ testimony.

2012 Nat’l ACO Summit Report: Mass. General’s Pathology-Endocrinology Collaboration Results in Improved Cancer Outcomes

Collaborations among primary care and specialty physicians, including pathologists, that result in appropriate utilization and improved outcomes are key strategies for effective accountable care organizations (ACOs), explained speakers during a June 8 panel discussion on the role of specialty providers in coordinated care at The National ACO Summit in Washington, DC.

CAP ACO White Paper Details Pathologists’ Roles, Opportunities

The CAP Policy Roundtable’s recently released white paper, Contributions of Pathologists in Accountable Care Organizations: A Case Study recounts the contributions pathologists are making at three leading health systems: Geisinger Health Systems in Danville, Pa.; the Accountable Care Alliance in Omaha, Nb.; and Catholic Medical Partners in Buffalo, N.Y.

The paper also looks at the challenges—particularly related to payment and HIT issues—that are hindering pathologists from fully contributing to these delivery models.

These collaborations are fundamental to achieving the core ACO goals of improving patient care while reducing costs, said CAP Member and panel moderator Stephen Black-Schaffer, M.D., FCAP. “This is the nature of coordinated care,” he explained during his introductory presentation. “We are all responsible for decreasing the total medical expense to the community, regardless of our specialty.”

Appropriateness of Testing, Surgery

As Associate Chief of Pathology at Boston’s Massachusetts General Hospital (MGH) and Partners HealthCare, a Medicare Pioneer ACO, Dr. Black-Schaffer was part of a team of pathologists who partnered with their endocrinologist colleagues in seeking ways to improve management and control the costs of caring for patients with thyroid nodules of indeterminate malignancy. He is also on Partners HealthCare’s ACO Governing Council.

The physicians were looking at appropriate utilization of a new molecular diagnostic test that, while expensive—approximately $3,000-$4,000 per test—had shown in study populations a 96% negative predictive value for ruling out cancer. This was of interest because, to avoid missing cases of cancer, standard practice involves some surgery being performed when it is not clear whether the patient has cancer. “Thyroid surgery is not without its complications,” said Dr. Black-Schaffer. “As much as possible, we want to avoid unnecessary operations.”

The endocrinologists consulted with the pathologists on how best to define an algorithm for the possible use of this test, to ensure this wouldn’t result either in missed cancer diagnoses or in excess medical expense. To address these paired concerns, the pathologists tapped into their comprehensive database of prior cases, with its stable long-term known sensitivity and specificity for cancer. In addition to helping to evaluate appropriate test utilization, this data analysis provided a basis from which to assess success in reducing surgery for benign conditions while not missing cancers.

Decreased Send-Outs

Through this partnership, the pathology-endocrinology team established an approach for narrowing this new testing down to those cases in which the physicians could not determine for sure whether cancer was present, explained Dr. Black-Schaffer. “This significantly decreased the number of prospective send-outs for the test, and potentially the number of unnecessary operations,” he added. He cautioned, however, that this change in practice from that in the study populations would inevitably affect the negative predictive value of the test seen in those studies. Therefore, ongoing monitoring against the historical baseline would be absolutely necessary to ensure that the goals of this new testing algorithm were achieved.

Of course, reducing costs is rarely simple, because it usually means a loss of revenue somewhere in the system. Dr. Black-Schaffer observed that through their partnership with MGH endocrinologists, they had developed a way to potentially save money and improve outcomes, and there was no direct impact on their revenue streams. But this not always the case. “In most instances, changes in practice will impact your own revenue stream,” he explained. “We need to set up a payment system so providers are not disincentivized. As we allocate resources—one of the challenges and opportunities of practicing in an ACO—we need to incentivize while encouraging more cost-effective processes.”

New York Lawmakers Vote to Dismantle Self-Referral Restrictions

New York State lawmakers passed legislation in June to repeal provisions of that state’s anti-self-referral law. In absence of these state restrictions, federal (Stark) law over self-referral of physician services would apply. If enacted, New York would become the first state to dismantle state-based protections and limitations on physician self-referral.

The New York State Bar Association supports the legislation (A 3551; S 4660); the CAP and the New York State Society of Pathologists are opposing this legislation as part of a broader laboratory coalition, which will be urging the Governor to veto the legislation.

Opposition to the bill also includes the New York Blue Cross Blue Shield plans. In an opposition memorandum, the Plan’s legal counsel stated that the financial abuses that prompted New York lawmakers over 20 years ago to enact the current restrictions continue to proliferate. “New York enacted the provisions this bill would repeal in 1992 specifically to confront financial abuses caused by collaboration between healthcare providers ordering tests and the laboratories performing them. And these abuses are very real and continue today,” stated the letter.

The letter goes on to cite a recent CAP-funded study by Georgetown University researchers published in the April edition of the health care policy journal Health Affairs, which found that urologists who referred prostate biopsies to pathology laboratories in which they had a financial stake billed Medicare for 72 percent more pathology specimens compared to physicians who did not have a financial conflict of interest.

“These statistics clearly show that reducing the level of oversight on the relationship between providers and clinical laboratories is a dangerous proposition,” the letter concluded.

CAP Working with Lawmakers to Promote Pathologist’s Role in ACOs Under Mass. Reform Bills

Massachusetts lawmakers passed sweeping legislation this month that will overhaul the delivery of health care by imposing state controls on the overall increase in health care costs. Among other provisions, the legislation encourages Medicaid providers to shift from fee-for-service to alternative payment methods, and establishes a state process for the promotion and oversight of Accountable Care Organizations (ACOs).

The CAP, along with the Massachusetts Society of Pathologists (MSP), has been working with both state Senate and House members on amendments to promote the pathologists’ role in ACOs, as well address pathologists’ inability to meet federal “meaningful use” criteria.

Specific to ACOs, the CAP-MSP-supported amendment, included in both bills, authorizes the state to evaluate ACOs on the level of clinical integration afforded to the laboratory medical director providing services to the ACO. In addition, a House bill amendment addresses a proposed medical licensure requirement relating to “meaningful use” of EHR systems by physician applicants. If enacted, this amendment in the House bill would exempt pathologists from the requirement given their reliance upon laboratory information systems and the inability to meet federal “meaningful use” criteria established under federal law.

Both the Senate and House bills (H 4155; S 02270) will need to be reconciled in a conference committee in July. This legislation, if enacted, is expected to cut health care spending by $160 billion over 15 years.

New Jersey Pathologists Oppose Proposed HIT Rule

The New Jersey Society of Pathologists (NJSP), with the support of the CAP, is opposing a proposed state rule related to electronic submission of test results, arguing that the regulation exceeds statutory authority and is arbitrary in its use of the prompt pay law that discriminates against providers electronically submitting laboratory tests.

This rule is proposed by the New Jersey Department of Banking and Insurance, Division of Insurance, Office for the Development, Implementation and Deployment of Electronic Health Information Technology. Under the proposed rule, pathologists would need to include proof that they electronically submitted laboratory test results to the ordering provider with their laboratory test reimbursement claims. If the provider is not able to receive the data electronically, proof of the non-electronic submission of the test results to the medical provider who ordered the tests must be provided. The proposed rule would amend New Jersey’s Prompt Payment Law by requiring the proof of submission of electronic laboratory tests by a provider as part of a clean claim to carriers.

The NJSP also stated in its recent comment letter that the proposed rule exceeds federal requirements for HIT and EHR.

“The proposed rule would penalize providers of laboratory tests by linking reimbursement of claims to electronic submission of laboratory tests before the implementation of an adequate Health IT infrastructure is in place pursuant to the HITECH Act,” stated the June 13 letter to the Department of Banking and Insurance. “New Jersey’s proposal far exceeds the requirements promulgated in the Centers for Medicare and Medicaid Services (CMS) Meaningful Use (MU) incentive rules, none of which, to date, mandate electronic transmission of all laboratory test results to the ordering provider.”

Federal Appeals Court Denies Myriad Dismissal Request

The Federal Circuit Court of Appeals has denied Myriad Genetics’ request to dismiss the gene patent case on standing grounds, meaning that the Court will still hear the case on July 20, as previously announced.

“The Court made clear that the case should move forward for consideration of the ultimate legal question: whether these patents are invalid because they claim laws and products of nature,” Sandra Park, an attorney with the American Civil Liberties Union (ACLU), told Statline. The ACLU is representing plaintiffs (including the CAP) in a suit challenging gene patents on human DNA, specifically Myriad Genetics’ patent claims on BRCA 1 and BRCA 2 genes.

Following its unanimous ruling in favor of Mayo Collaborative Services in its medical patent suit against Prometheus Laboratories, the Supreme Court vacated the Federal appeals court’s July 2011 decision. CAP and other medical societies and organizations provided amicus briefs in support of Mayo at various points in the litigation. In addition, the Supreme Court remanded the case back to the Federal appeals court in light of the Mayo decision.

In preparation for the July 20 hearing, the U.S. Patent & Trademark Office (PTO) has also filed a brief. While the PTO brief is in support of neither party, it does argue that the Supreme Court’s Mayo decision supports the invalidity of DNA claims. Myriad has also filed a brief for the July 20 hearing as has CAP and the other original plaintiffs.

Keep Up with the Latest CAP Advocacy News on Twitter

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


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