College of American Pathologists
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July 7, 2011  •  Volume 27, Number 14
Next Issue: July 21, 2011
© 2011 College of American Pathologists

In This Issue:

2012 Prop. Physician Fee Schedule Moves Payment Reforms Forward
CMS Issues Proposed Rule to Retract Physician Signature Requirement
National ACO Summit Looks Ahead to Payment Reform Challenges
CAP Provides Input to FDA on Genomic Sequencing Technologies
Missouri Attorney General Clarifies EHR Donation Statute
CAP, N.J. Pathologists Work to Amend Genetic Counselor Law
CAP Needs Member Input for 2011 Practice Characteristics Survey
Keep Up with the Latest CAP Advocacy News on Twitter

2012 Prop. Physician Fee Schedule Moves Payment Reforms Forward

Medicare physician payments are set to be cut by almost 30% once the current SGR “patch” expires on Jan. 1, CMS officials announced in the recently released 2012 Proposed Physician Fee Schedule (PFS). In addition to the payment cut, CMS officials announced related payment policy changes, including ending the TC grandfather provision, expanding the agency’s misvalued code initiative and the multiple procedure payment reduction (MPPR) policy, and new quality pathology quality measures, in the proposed rule, released on July 1.

It’s important to note that the proposed rule did not specifically address how to stop the planned 29.5% cut, as any payment reduction can only be averted by Congress. However, agency officials stated that the proposed rule did state that the President’s 2012 proposed budget extends current payment rates through Dec. 31, 2013. The College has been advocating with other physician stakeholders to encourage Congress to repeal the SGR. In late June, the CAP signed on to a letter from AMA to President Obama, not only urging the SGR repeal but ensuring that permanent physician payment reform is part of any final debt ceiling agreement between Congress and the Administration.

In addition to the physician payment cut, CMS continues to evaluate potentially misvalued codes, the agency announced in the proposed PFS. Two categories of potentially misvalued codes were identified in the proposed rule: all evaluation and management (E/M) codes and the highest non-E/M expenditure codes for each specialty including several pathology services.

In addition, the agency could bring the comprehensive work and practice expense relative value unit (RVUs) reviews into this process. The work and PE RVU reviews are required every five years under Medicare law, and CMS is proposing a joint review of the RVUs on an annual basis.

TC Grandfather, MPPR Expansion

As in previous years, the 2012 proposed rule details plans by CMS to terminate the provision allowing independent laboratories to bill Medicare for the technical component (TC) of surgical pathology services for hospital patients

Indeed, CMS has included a sunset of the TC “grandfather” provision each year that the provision has been extended by Congress, meaning that independent laboratories, under certain conditions, are currently allowed to bill Medicare directly for the TC of surgical pathology services provided to hospitals. However, under the proposed rule, independent laboratories will no longer be able to bill Medicare for the TC of pathology services beginning in 2012.

The CAP has long advocated that this grandfather policy should be permanent, and will again need Congress to extend the provision.

Another payment related issue in the proposed rule that could impact pathologists involves expanding the multiple procedure payment reduction (MPPR) policy. Beginning next year, CMS is proposing to apply the MPPR policy to the professional component (PC) of advanced imaging services; specifically CT and MRI scans, as well as ultrasound. CMS believes that there are efficiencies in physician work, particularly in pre- and post-service periods and when more than one imaging test is performed to a patient over the course of the day.

While this 2012 proposal focuses on applying this policy to imaging services, CMS indicated that it is “aggressively looking for efficiencies in other sets of codes” beginning in 2013, and will consider implementing more expansive payment reduction policies at this time. Specifically, the agency is looking to apply the MPPR to the TC of all diagnostic tests. This means that payment would be reduced for the TC of the second and subsequent diagnostic tests performed in the same patient encounter.

2012 Proposed PFS: Pathology Measures

Barrett’s Esophagus
Esophageal biopsies with a diagnosis of Barrett’s esophagus that also include a statement on dysplasia.

Radical Prostatectomy Pathology Reporting Reports include the pT category, the pN category, the Gleason score and a statement about margin status.

Immunohistochemical (IHC) Evaluation of HER2 for Breast Cancer Patients
Quantitative HER2 evaluation by IHC uses the system recommended by the ASCO/CAP guidelines.

New Pathology Quality Measures

Next year’s PFS from CMS also includes three pathology-related quality measures developed by the College, thus expanding the number of measures pathologists can report on for the agency’s Physician Quality Reporting System (PQRS) to five.

For 2012, the incentive for PQRS reporting will be 0.5%, down from 1% in 2011. The three proposed pathology measures cover Barrett’s esophagus, radical prostatectomy pathology reporting, and immunohistochemical (IHC) evaluation of HER2 for breast cancer patients (see box for more information). These measures were part of a larger set of five approved by AMA’s Physician Consortium for Performance Improvement (PCPI) in late January.

In addition to these CAP-developed measures, there are also three measures developed by the American Society of Breast Surgeons that could impact pathologists, according to early analysis of the proposal. These involve preoperative diagnosis of breast cancer, sentinel lymph node biopsy for invasive breast cancer, and biopsy follow-up.

The College is continuing to analyze this proposed rule and will submit comments to CMS at the end of August. More information on the 2012 Proposed PFS is available on the CMS web site.

CMS Issues Proposed Rule to Retract Physician Signature Requirement

After months of silence on the issue, CMS officials proposed a rule on June 30 to retract the physician signature requirement on test requisitions paid under the Clinical Laboratory Fee Schedule (CLFS), acknowledging that the policy could negatively impact patient care and would be difficult to implement. CAP was among the first and strongest opponents of the requirement when CMS first proposed it in the 2011 Physician Fee Schedule (PFS).

If enacted, the signature of a physician or qualified non-physician practitioner (NPP) would have been required on requisitions for tests paid under the CLFS. Initially set to go into effect on Jan. 1, CMS officials indefinitely delayed implementation while they prepared this proposed rule. Because the policy was part of the 2011 PFS, the agency had to issue a notice and request for comment, as it did on June 30 in the Federal Register. After the 60-day comment period closes, a final rule will be released, likely later this year.

In opposing this policy, the CAP’s primary concerns have been the potential delay in testing due to lack of signed requisitions and the risk of increased administrative burden to practices and health care providers—including pathologists.

National ACO Summit Looks Ahead to Payment Reform Challenges

As CMS officials comb through over 1,200 comments to the accountable care organization (ACO) proposed rule, they are focused on crafting a final rule that will help stabilize rising health care costs and be flexible enough so providers at all levels can participate, said HHS Secretary Kathleen Sebilius at the recent Second Annual ACO Summit. The meeting, held June 27-28, in Washington, DC, convened federal health care officials, national thought leaders in accountable care from the meeting’s sponsors, the Engelberg Center for Health Care Reform at Brookings and The Dartmouth Institute for Health Policy & Clinical Practice, as well as heads of the nation’s leading hospital and health care systems.

“I want to emphasize that the proposed draft was just that, a proposal,” said Secretary Sebilius during her keynote address that opened the meeting. “We are carefully reviewing the 1,200 comments we received, and looking at how we can refine the rule so that providers and stakeholders get better support.”

Another keynote speaker, Engelberg Center Director Mark McClellan, MD, PhD, noted that one of the key challenges facing HHS as they finalize the ACO rule is determining how providers will be paid.

Establishing the Pathologists’ Role

In an accountable care setting, laboratory data is important for other providers to report on their quality or performance measures, which will determine their cut of their facility’s shared savings, noted CAP ACO Network Steering Group member James Crawford, MD, PhD, at a panel about how specialty providers are supporting ACOs. Dr. Crawford is Chair of the Department of Pathology and Laboratory Medicine and Senior Vice President for Laboratory Services at the North Shore-Long Island Jewish (NS-LIJ) Health System in New York.

As a leader in several current NSLIJ coordinated care initiatives, one of Dr. Crawford’s primary tasks is to integrate the over 7,000 physician network into these efforts. Pathologists can partner with physician practices, particularly related to these performance measures. “We have much of the data that is going to inform their performance measures, including appropriateness and frequency test utilization data, as well as their actions based on laboratory tests,” he told Statline in an interview following the panel discussion.

The pathologists’ value in coordinated care was also underscored by another Summit speaker, David Bronson, MD, President of Cleveland Clinic Regional Hospitals. “We’ve found instances where genetic testing is done annually on some patients for two or three consecutive years. Genes don’t change that often,” he told Statline in an interview following his panel discussion on payment models. “It’s reasons like this that we need more pathologists involved in coordinated care models, especially to drive discipline in picking the right test and procedures at the right time.”

CAP Provides Input to FDA on Genomic Sequencing Technologies

FDA officials focused on the analytical performance of ultra high throughput genomic sequencing at a recent public meeting, and the agency invited the College to participate on both meeting discussion panels and to weigh in on relevant clinical issues as this technology moves beyond the research environment.

Currently, next generation sequencing platforms for targeted panel, whole exome, or whole genome sequencing are increasingly available for research purposes, but not routinely used for clinical diagnoses. Nevertheless, the FDA has to look ahead to the clinical environment when considering how to regulate this technology, pointed out CAP member John Pfeifer, MD, PhD, who participated on the meeting’s technical performance panel. Dr. Pfeifer is the Vice Chair for Clinical Affairs in the Department of Pathology at Washington University School of Medicine, and a member of the leadership team that has developed Genomic and Pathology Services at Washington University, a laboratory focused on the clinical application of next generation sequencing.

“Even though the clinical application of this technology was not the focus of the meeting, we were able to emphasize how any regulatory approach to this technology and software analysis had to keep the clinical environment in mind, because that is really the end game,” he explained to Statline.

Different Operating Procedures

It’s also important for the agency to recognize the distinct differences between the research and clinical environments, making the transition especially complex, said CAP member Lynn Bry, MD, PhD, FCAP, who participated on the meeting’s bioinformatics panel. In a clinical environment, there are defined standard operating procedures (SOPs) that are not always utilized in research laboratories, she explained, adding that clinical laboratories also have to comply with CLIA. Dr. Bry is Associate Director at Partners Center for Personalized Genomic Medicine in Boston.

This is especially true for bioinformatics pipelines, the components of which have frequently been developed for research applications. “The bioinformatics tools haven’t necessarily been well-documented and performance of this technology in different environments is often variable,” explained Dr. Bry. “To get this technology to work in a clinical environment, a lot has to be done to document the components, validate them for clinical performance, and show that they work effectively within a CLIA environment.”

In addition to pointing out these issues, both speakers told Statline that the FDA meeting presented a good opportunity to emphasize the leadership role that the College can play in working with other stakeholders as the agency begins to regulate this technology. “As the leading authority in laboratory medicine, we were able to highlight the College’s role in ensuring that this technology will adhere to the current quality standards under CLIA and the CAP’s accreditation process,” said Dr. Pfeifer.

Missouri Attorney General Clarifies EHR Donation Statute

Missouri laboratories donating 85% of the cost of EHR software to a referring physician could be violating the state’s anti-kickback laws if the referrals from the physician to the laboratory are either established or increased and the intent is to induce referrals paid for by the state’s medical assistance program, MO HealthNet, according to a recent letter clarifying certain EHR donations from the Assistant Attorney General (AG) Linda Lemke. This letter was in response to an inquiry request from the College and Missouri Society of Pathologists on EHR donations.

It’s important to note that the AG’s opinion applies only to the state’s medical assistance program, MO Health Net program. The AG’s opinion underscores that arrangements will be determined unlawful based on whether there is intent to induce referrals. The letter also clarified that an increase in referrals could indicate an unlawful arrangement. “While the establishment or increase of a referral relationship does not directly prove that the referrals were a result of a payment in kind, it is strong circumstantial evidence that this is the case,” states the letter.

CAP, N.J. Pathologists Work to Amend Genetic Counselor Law

Legislators in New Jersey are considering a bill that would add technical amendments to the state’s genetic counselor licensure law that passed in 2009. The bill, A3930, passed the New Jersey Assembly on June 23 by a vote of 75-1-1. On June 29, the Senate introduced an identical bill (SB 2990). The College anticipates the Senate will take action on the genetic counseling legislation following the November elections.

NJSP President Testifies in Support of Genetic Counselor Amendments

An mp3 of Dr. Zinterhofer’s entire testimony is available online.

The College and the New Jersey Society of Pathologists (NJSP) worked with the bill’s sponsor, Assemblyman Vincent Prieto (D), to amend provisions in the current licensure law, including removing the authorization of genetic counselors to interpret genetic tests.

“The clinical interpretation of laboratory tests requires a complete medical assessment of the patient and requisite clinical training that a genetic counselor is not trained to perform,” testified NJSP President Louis J. Zinterhofer, MD, FCAP, on June 10 before the state Assembly Regulated Professions Committee (see box to hear audio of Dr. Zinterhofer’s entire testimony).

The legislation also requires genetic counselors to refer patients to physicians if there is any indication of disease or condition that requires medical evaluation. In addition, the bill includes an exemption for physicians to provide patients with genetic counseling services without limitation. The legislation is also supported by the Medical Society of New Jersey and the Oncology Society of New Jersey.

CAP Needs Member Input for 2011 Practice Characteristics Survey

All CAP fellows are encouraged to complete the 2011 Practice Characteristics Survey. This is one of the College’s most important initiatives because it tracks and reports changes occurring in the practice of pathology. Data from this important survey is used by members and their practices, as well as to inform CAP advocacy efforts. The survey provides useful compensation and practice-related data to all CAP members, and collects vital practice characteristic data and information on challenges facing pathology practices. The survey can be accessed online.

Survey answers are kept strictly confidential and the results will only be reported in aggregate form or in a manner that does not identify information about an individual. For questions about the survey, contact Nonda Wilson, Advocacy Division, by email or by phone at 202-354-7116.

Keep Up with the Latest CAP Advocacy News on Twitter

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


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