College of American Pathologists
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July 8, 2010  •  Volume 26, Number 14
Next Issue: July22, 2010
© 2010 College of American Pathologists

In This Issue:

Congressional Lab Tours
Physician Payment Rule Highlights: SGR Cut Climbs to 27% in 2011
CMS Will Not Enforce July 6 PECOS Enrollment Deadline
House Committee Hears MedPAC Plans for Self-Referral Analysis
Supreme Court’s Bilski Decision Avoids Biotech Patent Questions
CMS to Release Proposed ACO Regulations This Fall
Beth Israel Pathologists Press for Personalized Medicine Training
Delaware Adopts Genetic Counselor Licensure Law
Self-Referral Amendments Blocked in New York Senate Health Committee
Disclosure Legislation Passes Pennsylvania House
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Congressional Lab Tours

Rep. Critz (D-PA) Visits Lab in Indiana, PA

Critiz Lab Tour One of Congress’s newest members from Pennsylvania, Rep. Mark Critz (D) toured the Indiana Regional Medical Center on July 6. Congressman Critz recently won a special election in May to replace the late Congressman John Murtha (D).

The visit to the Indiana, Pa., medical center also included a tour of the laboratory led by CAP member Steven Wilson, M.D. Rep. Critz and Dr. Wilson discussed physician self-referral issues, as well as the growth of personalized health care and the need to preserve the important role pathologists can play as a diagnostic consultant for patient care.

“It was fascinating to see the different diagnostic tests that are conducted on a daily basis right here at Indiana Regional Medical Center,” said Critz following the tour. “I think everyone would benefit from a better understanding of the growing importance of pathologists and the clinical laboratory in the health care system.”

Florida Rep. Posey Tours Holmes Regional Medical Center Laboratory

On July 8, Congressman Bill Posey (R-FL) toured Holmes Regional Medical Center in Melbourne, Fla. The tour focused on the role of pathologists in health care, and included a demonstration of how pathologists use cutting-edge technology and laboratory tests to screen for cancer and precancerous lesions.

“My visit with Holmes Regional Medical Center here in Brevard County was very informative and it was interesting to see firsthand how tests are conducted,” said Congressman Posey. “Getting the right diagnosis on a disease is critical in helping doctors and patients determine what’s wrong and what treatment options are available to them. Pathologists play a critical role in improving patient care.”

Physician Payment Rule Highlights: SGR Cut Climbs to 27% in 2011

The same day that President Obama signed a six-month Sustainable Growth Rate (SGR) patch with a 2.2% update through Nov. 30, CMS released the 2011 physician payment rate, which is set to face a 27 cut under the current SGR formula.

This estimate, along with other key provisions related to physician quality reporting initiatives (PQRIs) and disclosure requirements for in-office ancillary services (IOAS) are some highlights from the 2011 Medicare Physician Payment Proposed Rule.

Next year’s SGR cut is based on a projected 6.1 percent reduction under the formula, as well as the 21.2 percent reduction delayed until Dec. 1, 2010. This also includes a 0.3 score under the Medicare Economic Index for 2011, making the total 2011 cut approximately 27%.

For the PQRI program, one highlight is the lower threshold for claims-based reporting. The AMA has backed this provision, which would lower the threshold for individual measures from 80% to 50%, so more physicians could qualify for incentives. Another AMA-sponsored (and CAP-supported) provision in the proposal of interest to small specialty groups like pathologists is lowering the threshold for the group practice reporting option, so that groups with less than 200 physicians, including as few as two, may participate. The proposal also includes additional electronic prescribing measures so that additional physician specialties can participate through this reporting modality. AMA released its summary and analysis of the entire proposal in early July.

Disclosure Provisions

In this 2011 rule, CMS is also proposing a new self-referral disclosure mandate that would require physicians to disclose ownership interest in MRI, CT and PET scans when a referral is made for these types of services.

While this disclosure requirement proposal does not include anatomic pathology services, the HHS Secretary maintains the right to expand this disclosure requirement at their discretion. CAP plans to urge CMS to extend this self-referral disclosure requirement to include AP services, as well as further advocate for CMS to use its regulatory authority to tighten the IOAS exception under the Stark law by allowing only designated health services that can be performed in-office and where the results are available at the time that the patient is in the office.

Separate from the disclosure requirement, next year’s physician fee schedule proposes requiring a signature from a physician or qualified non-physician practitioner (NPP) on all lab tests paid under the clinical lab fee schedule (CLFS). In the past, signature proposals have led to confusion over whether the regulation applies to all diagnostic lab tests, regardless of whether the test is paid on the physician fee schedule, the CLFS, or the Outpatient Prospective Payment System, and in what setting a physician’s signature on a requisition or order is required. However, for the 2011 proposed payment rule, CMS indicates that requiring a signature from physicians and NPPs would minimize confusion and provide a straightforward directive for laboratories to meet.

CMS Will Not Enforce July 6 PECOS Enrollment Deadline

CMS recently announced it would not reject claims from providers who had not enrolled in the Provider Enrollment, Chain and Ownership System (PECOS) by the July 6 deadline.

CMS originally set the PECOS enrollment date at Jan. 3, 2011, but this date was moved up six months to early July under the new health care law. However, there were reportedly enrollment problems and many physicians were concerned that their claims would be rejected if the referring or ordering physician listed on the claim was not enrolled in PECOS. CAP, AMA, and other medical specialty groups 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.

In response, CMS said that the agency will review the PECOS enrollment process and would not reject claims by physicians not yet enrolled in the system. &38220;While the regulation will be effective July 6, 2010, CMS will not implement automatic rejections of claims submitted by providers that have attempted to enroll in PECOS,” said the agency in a statement. “However, until the automatic rejections are operational, providers should not see any change in the processing of submitted claims, they will continue to be reviewed and paid as they have historically been reviewed and paid.”

The AMA has released additional information on the implications of this recent CMS announcement.

House Committee Hears MedPAC Plans for Self-Referral Analysis

The Medicare Payment Advisory Commission (MedPAC) is not backing away from delving deeper into payment issues related to the in-office ancillary services (IOAS) exception to the Stark self-referral law. Chairman Glenn Hackbarth said the Commission was looking at a number of policy options in their next reporting cycle, including reducing payment rates for diagnostic tests performed under the exception and long-term solutions such as bundling/packing payments, as well as alternate payment systems, according to testimony from a June 23rd hearing before the House Energy and Commerce Committee’s Subcommittee on Health.

Beginning this fall, MedPAC will also look at excluding from the IOAS exception diagnostic tests not usually provided during an office visit, as well as improving payment accuracy and creating bundled payments for these arrangements, Hackbarth explained. “Many physicians have expanded their practices in recent years to provide ancillary services, and these services have experienced rapid volume growth over the last five years,” he said, adding that there was evidence that physician investment in ancillary services leads to higher volume due to financial incentives. CAP, along with numerous other medical societies, have been urging the removal of AP services from the IOAS exception because these services cannot be completed in time to aid in the physician’s diagnosis while the patient is in the office.

At the June hearing before the House Energy and Commerce Committee, Rep. Anna Eshoo (D-CA) expressed concern that MedPAC was not yet issuing recommendations on self-referral. The current MedPAC report issued in June lays out policy options to gather public input. This recent report analyzed Medicare claims data from 2008 on the frequency of same day services—such as diagnostic lab testing—that are covered by the IOAS as defined by the Stark law. MedPAC analysis concluded that fewer than half of clinical lab tests are performed on the same day as an office visit.

Supreme Court’s Bilski Decision Avoids Biotech Patent Questions

The U.S. Supreme Court’s recent decision on business method patents is unlikely to impact Salt Lake City-based Myriad Genetics’ current appeal to overturn the District Court’s ruling invalidating some of its patent claims on genes BRCA 1 and BRCA 2. CAP is a plaintiff in the Myriad case.

This recent ruling—known as the Bilski decision—is narrowly focused on patenting business methods and avoids the thorny question of biotech patents. Many patent and biotech insiders were anticipating a broader ruling, which might have impacted how biotech patents were evaluated, including diagnostic method patents.

“Basically, the justices said that the law is what we always thought it was,” said Chris Hansen, a senior attorney with the American Civil Liberties Union (ACLU). “This decision doesn’t change the law with respect to our case at all.” The ACLU and Public Patent Foundation sued Myriad Genetics in March 2009 on behalf of cancer victims and medical groups including CAP.

In arriving at his ruling against Myriad in late March, Judge Robert Sweet of the U.S. District Court for the Southern District of New York considered the company’s gene patents, and ruled on whether its testing method patent passed 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.

Biotech Patents Under Review

The machine or transformation test comes from any earlier ruling against Bernard Bilski, who sought to patent his method for hedging risk in commodities trading. The Supreme Court upheld this ruling, although it used a different way of determining that the Bilski patent was invalid because it was an “abstract idea”. Because the Myriad case involves a claim that the methods are also abstract ideas, Hansen does not believe the change in the analysis approach will hurt the ACLU case. “Because the decision didn’t change the rule that you can’t patent abstract ideas, it won’t impact the Myriad case,” said Hansen.

But the Supreme Court does appear to believe that biotechnology patents warrant a closer look. CAP signed onto a brief supporting Mayo’s petition for writ of certiorari.

This case involves two Prometheus patents of a drug dosing method challenged by the Mayo Clinic. The original judgment was in favor of Prometheus, but the decision was vacated by the Supreme Court, and the case remanded to the Federal Circuit for review in light of the Bilski decision. In addition, the Supreme Court also granted certiorari and vacated the ruling in another case involving medical diagnosis patents, Classen v. Biogen. While some biotech patent watchers took this as sign that the Supreme Court is laying the groundwork for weighing in on what can and cannot be patented, Hansen calls the granting of these certioraris “totally unremarkable”, adding that one “can’t really predict where the majority of the Justices will go” in this area.

CMS to Release Proposed ACO Regulations This Fall

This fall, CMS plans to issued proposed regulations for the 2012 accountable care organization (ACO) demonstration, announced Jon Blum, the agency’s director of Center for Medicare Management, during a special Open Door Forum on June 24. Blum also indicated he was closely following developments in the private sector that may be applicable to ACO development by CMS. Most likely, he is referencing the numerous ongoing private sector ACOs, including the current ACO pilot program involving over 70 hospitals under the direction of the Premier Inc. health care network.

CMS is charged with implementing an ACO demonstration under the health care reform law beginning Jan. 1, 2012. CAP is working to ensure that pathologists are involved in the early stages of designing this demonstration. “Pathologis...would like the opportunity to work with CMS early on in the ACO demonstration development process, so as not to have to reinvent throughout the country,” explained CAP’s Economic Affairs Committee Vice-Chair Stephen Black-Shaffer, M.D. during the forum.

Dr. Black-Shaffer also expressed concern about how pathologists will be able to participate in ACOs, as well as how will their performance will be measured, as many of these indicators are not applicable to pathology. Related to this issue are questions about how to define benchmarks for shared savings and how the savings are distributed.

CMS recently posted a question-and-answer document on the ACO demonstration online.

Statline will continue to follow this developing issue for the pathology community.

Beth Israel Pathologists Press for Personalized Medicine Training

Leading pathologists from Beth Israel Deaconess Medical Center (BIDMC) and Harvard Medical School are among those advocating for making genomic and personalized medicine training part of all pathology residency training programs in North America over the next two years, according to “A Call to Action” published in the June issue of the American Journal of Clinical Pathology.

“No field of medicine has really taken this on, but there is a clear need for pathology to be out in front of this type of analysis in medical practice,” said Jeffrey Saffitz, M.D., Ph.D., BIDMC’s chief of pathology.

The suggested training curriculum would be modeled on that offered by the Genomic Medicine Initiative (GMI), which was launched by the BIDMC pathology department in 2009. “By July 2012, we want every pathology training program in the United States and Canada to have this program in place,” said Saffitz, adding that GMI officials have had discussions with CAP leaders about developing standards, as well as a funding model, for these programs. The curriculum includes lectures on current genomic testing technology, including next generation sequencing, as well as analyzing what the results mean—both for patients and other medical providers. Pathology residents also have the opportunity to analyze their own genome.

An important component of the training program is to understand what current genomic technology can offer in terms of information. “We want the residents to have a clear sense of what the current limits of this testing are, even though this is changing daily,” said Saffitz. “But overall, the goal of the training is to demystify personalized and genomic medicine to our residents.”

Delaware Adopts Genetic Counselor Licensure Law

Delaware Gov. Jack Markell (D) has signed a genetic counselor licensure bill (Senate Bill 259) that includes an amendment to remove interpreting genetic tests from the proposed scope of practice authority of a genetic counselor. In addition, the law also requires genetic counselors to refer a client to a physician licensed to practice medicine if there is any indication of disease or condition requiring medical assessment. The amendment language was developed by sponsor Senator Bethany Hall-Long (D) in cooperation with CAP, the Delaware Pathology Society, and the Delaware Medical Society.

In related news in Illinois, legislation that would change the state’s genetic counselor licensure law is awaiting the signature of Gov. Pat Quinn (D). In partnership with the Illinois Society of Pathologists and Illinois State Medical Society, CAP helped to author two amendments adopted as part of the legislation. The first amendment allows genetic counselors to order genetic tests provided they have physician referral to order a test. This is a change from the original legislation conferring authority on genetic counselors to order genetic tests without limitation. The second amendment allows genetic counselors to disclose client information not only to the referring physician, but also to the physician performing or supervising the genetic test.

Self-Referral Amendments Blocked in New York Senate Health Committee

Legislation to amend New York’s current self-referral law has passed through the state assembly, but opponents were able to block the revisions in the state Senate Health Committee. CAP and the New York State Society of Pathologists are opposed to these amendments (AB9933/SB6955), which would significantly weaken the current law.

While the state legislature has recessed for the summer, there is word that members may return in late July to work on unfinished issues. Statline will be closely following this state issue and will feature updated news in future issues.

Disclosure Legislation Passes Pennsylvania House

Legislation has passed the Pennsylvania House of Representatives that requires referring physicians who order—but do not supervise or perform—AP services to disclose the actual cost of the services when billing patients or payers.

The legislation, H.B. 2521, was backed by the CAP and the Pennsylvania Association of Pathologists (PAP) and passed the House on July 3 by a vote of 194-0. The Pennsylvania Medical Society also agreed to back the bill, at the request of the PAP. The legislation will be taken up the by the Senate when the Legislature returns from summer recess in September.

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