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

July 21, 2011  •  Volume 27, Number 15
Next Issue: August 4, 2011
© 2011 College of American Pathologists

In This Issue:

Gang of Six Senate Deficit Reduction Plan Includes 10-Year SGR Fix
CMS Declines to Define Timing, Placement for Molecular Path. Codes
CMS’s Complex Laboratory Test Demonstration Gets Underway
Rep. Davis (R-KY) Introduces Bill to Make TC Grandfather Permanent
CAP, Mich. Pathologists Oppose Expanding Nurse Scope of Practice
FDA Releases Draft Guidance on IVD Companion Diagnostics
Still Time to Complete 2011 Practice Characteristics Survey
Keep Up with the Latest CAP Advocacy News on Twitter

Gang of Six Senate Deficit Reduction Plan Includes 10-Year SGR Fix

The debt ceiling plan proposed by six bipartisan senators—the Gang of Six—as Statline was going to press called for a 10-year “doc fix”, as well as requiring legislation to repeal or replace the sustainable growth rate (SGR). The Congressional Budget Office has indicated that the cost to fix the SGR is estimated to cost $300 billion over this time period.

The plan would require the Senate Finance Committee to report legislation within six months to permanently reform or replace the SGR and fully offset the cost with health savings over the next 10 years. However, as health savings is not defined in the proposal, it’s unclear how this will be funded.

The necessary cuts could come from a separate proposal that was part of earlier efforts to identify savings for the debt ceiling package. The estimated total savings from this previous proposal is $334–$353 billion from a variety of health care programs. Under this plan, laboratories are being targeted for savings of $8 to $16 billion by charging Medicare beneficiaries a co-payment for each laboratory test. The laboratory community historically has opposed such measures and instead has opted to absorb any reductions through a freeze or reduction in the clinical laboratory fee schedule.

The proposed doc fix prompted praise by the AMA, who released a statement along with other physician groups including the American Osteopathic Association. “We look forward to learning more details of the proposal in the coming days and continuing to work with the many members of Congress from both chambers and both parties who are committed to resolving this issue once and for all,” said the statement.

CMS Declines to Define Timing, Placement for Molecular Path. Codes

CMS officials listened to stakeholder comments on placement for the recently developed molecular pathology CPT codes, but did not indicate where these codes would appear—whether on the Physician Fee Schedule (PFS) or the Clinical Lab Fee Schedule (CLFS)—at the July 18 public meeting sponsored by the agency regarding these genetic test codes. This discussion followed CMS’s annual CLFS public meeting (see box for the CAP’s recommendations regarding payment for new CPT codes).

CAP Recommends Cross-Walks for Two New CPT Codes for ’12 CLFS

CAP’s Vice Chair of the Economic Affairs Committee Stephen Black-Schaffer, MD, FCAP, presented recommendations regarding payment on two new CPT codes for consideration in the 2012 CLFS at the annual CLFS public meeting, also held on July 18:

CPT Code 863XX Nuclear Matrix Protein 22 (NMP22), qualitative: Crosswalk to 86294 Immunoassay for tumor antigen, qualitative or semiquantitative (eg, bladder tumor antigen). This code is established to report qualitative testing for Nuclear Matrix Protein 22 typically at the point of care. This code change also provides greater coding granularity; crosswalk to 86294 is recommended as it has similar clinical utility and similar methodology is used.

CPT Code 873XX Infectious agent antigen detection by enzyme immunoassay technique, qualitative or semiquantitative, multiple-step method; HIV-1 antigen(s), with HIV-1 and HIV-2 antibodies, single result: Crosswalk to 87390 Infectious agent antigen detection by enzyme immunoassay technique, qualitative or semiquantitative, multiple-step method; HIV-1 plus one-half 86703 Antibody; HIV-1 and HIV-2, single assay. The platform provides a single result clinically comparable to the combination of these two services, but the latter service is reduced to reflect the use of shared resources.

Agency officials did state that the codes would not appear on the 2012 CLFS, as the law requires a public meeting to be held prior to placement. The agency did not seek public comments on the new molecular pathology codes during the annual CLFS meeting held earlier that day. However, this does not mean that the codes will therefore be placed on the CLFS in 2013 or on the PFS, either in 2012 or in the future, explained Marc Hartstein, CMS’s Deputy Director of the Hospital and Ambulatory Policy Group. The PFS follows a process different from the CLFS, and no decision has been made by the agency with regard to placement of any of the new codes on the 2012 physician fee schedule.

CAP’s Position on Placement

As medical professionals, such as pathologists, are currently paid for molecular pathology services, the College supports placing the Tier 1 and 2 molecular pathology codes on the PFS, testified Jonathan L. Myles, MD, FCAP, Chair of the CAP Economic Affairs Committee at the CMS public meeting on the codes.

There is professional work—not just technical—involved for providing these services, Dr. Myles emphasized. “Both the professional component [PC] and technical component [TC] are resource based in the PFS, while the CLFS relies on cross walking,” he explained. “Furthermore, PFS allows for pricing updates due to changing technology and increased efficiencies.”

Dr. Myles concluded his testimony by noting the role that the AMA/Specialty Society Relative Value Update Committee (RUC) would have in evaluating these codes. The RUC is a multispecialty physician expert panel convened by the AMA to make recommendations to the government on reimbursement for physician services. “Like other codes, the RUC would develop recommendations used to determine the amount of professional work for each code,” he explained.

CMS’s Complex Laboratory Test Demonstration Gets Underway

CMS officials have opened a demonstration project outlined in the health care reform law allowing laboratories to bill Medicare directly for certain complex laboratory tests performed on patient specimens collected at a hospital, but performed after discharge, that would otherwise be included in the DRG reimbursement. Payment for the two-year demonstration project is limited to $100 million; reimbursement begins Jan. 1, 2012.

CMS Holds Special Open Door Forum Today

As Statline was going to press, CMS officials held a Special Open Door Forum conference call on the demonstration from 2:00 – 3:30 p.m. (EST).

A transcript and audio recording will be available beginning Aug. 11.

Under CMS’s current “date of service” rule, independent laboratories cannot bill Medicare directly for certain tests, including molecular tests, performed on these specimens less than 14 days after a patient is discharged from a hospital. Rather, the test would be billed with a date of service that would be bundled into the payment to the hospital. However, this demonstration project allows the independent laboratory to bill Medicare directly for the test performed within 14 days following discharge.

Based on an amendment to the health care reform bill by Sen. Ron Wyden (D-OR), and input from CAP members, this demonstration project is open to all independent laboratories. Interested participants must obtain a temporary code from CMS for tests that would fall under the demonstration project. The supporting information necessary to request a code is due to CMS by Aug. 1. Details on participating in the demonstration project can be found online.

Rep. Davis (R-KY) Introduces Bill to Make TC Grandfather Permanent

Republican Congressman Geoff Davis (KY) introduced legislation in early July that would make permanent the current “grandfather” provision allowing independent laboratories to bill Medicare for the technical component (TC) of surgical pathology services for hospital patients. The bill, HR 2461, is co-sponsored by Rep. Mike Ross (D-AR).

While independent laboratories, under certain conditions, are currently allowed to bill Medicare directly for these services, the recently released CMS 2012 proposed Physician Fee Schedule included plans—as it has in previous years—to terminate this provision beginning next year. Last year, Congress extended the “grandfather” policy until December 31, 2011. However, Congress will need to pass legislation before year’s end to ensure continuation of this policy.

The CAP supports Rep. Davis’s legislation, as it has long advocated that the grandfather provision be made permanent.

In a statement to Statline, Rep. Davis said that using an independent lab allows small and rural hospitals to access high quality pathology services. “However, this arrangement would not be possible without the ability for independent labs to bill Medicare directly for the technical component of these services,” he stated. “This legislation would allow hospitals and independent labs to continue with the current payment structure, despite the 1999 CMS announcement, so that patients at these hospitals can continue to receive quality care.”

CAP, Mich. Pathologists Oppose Expanding Nurse Scope of Practice

The College and the Michigan Society of Pathologists (MSP) are opposing two bills that would expand the scope of practice for certified nurse practitioners (CNP) in that state to include ordering lab tests and interpreting results.

This provision was included in two recently introduced bills from the state’s House and Senate (HB 4774/SB 481), that establishes a scope of practice for Advanced Practice Registered Nurses, which include CNPs. Both bills provide statutory authority for CNPs to perform both ordering and interpretive services related to laboratory tests. Currently, only a handful of states allow CNPs to order and interpret test results without requiring a collaborative practice agreement or supervision by a physician. Six states—Arizona, Idaho, Kentucky, New Hampshire, New Jersey, Washington—allow CNPs to order tests. Of these, four states—Arizona, Idaho, New Hampshire, Washington—allow CNPs to interpret laboratories studies and test results.

The College supports the MSP’s opposition to these bills. While supporting the integration of CNPs in a team-based health care delivery model supervised by a physician, the expanded scope of practice is inconsistent with a CNP’s education and clinical training, explained MSP President Richard J. Zarbo, MD, DMD, FCAP, in a letter to the bills’ sponsors.

“The ordering of laboratory tests requires independent medical judgment consisting of a robust clinical assessment of the patient to ensure appropriate tests selection that CNPs are not trained to do,” stated Dr. Zarbo, who added concerns about CNP’s interpreting laboratory studies and results. “The interpretation of laboratory studies or tests is integral to diagnostic and treatment determinations by physicians that can have a profound impact on patient outcomes.”

FDA Releases Draft Guidance on IVD Companion Diagnostics

The FDA released on July 14 a draft guidance for developers of an in vitro diagnostic device (IVD) intended for use with a corresponding therapeutic product—also known as a companion diagnostic. In the draft guidance, the agency’s definition also emphasized that companion diagnostics are a type of IVD diagnostic device that provides information essential for the safe and effective use of a corresponding therapeutic product.

The agency’s definition also stated that the use of the IVD companion diagnostic device with the therapeutic product allows the therapeutic product’s benefits to exceed its risks. The draft guidance is open for comment until Sept. 12.

The draft guidance goes on to state that IVD companion diagnostic devices, as well as the therapeutic product, must be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product labeling. In addition, the document provides guidance to industry and FDA staff on possible premarket regulatory pathways and the agency’s regulatory enforcement policy.

The CAP is currently analyzing the draft guidance and will submit comments to the agency. One concern noted by CAP member Jan Nowak, MD, PhD, is that the guidance indicates that the purpose of using these tests is to identify “sub populations” or “subsets of populations” that might benefit from a particular therapy. However, for the patient and their physician, the purpose of testing is to better define the therapeutic options that are available for that individual, he explained. Furthermore, whether those treatment options are exercised or not is a decision for the patient to make in consultation with his or her physicians.

The FDA also needs to be cautious not to direct or infer specific treatments, which are ultimately medical decisions, according to Dr. Nowak, a member of CAP’s Public Health Policy Committee. “I would also like to see them acknowledge that the molecular characterization of tissue is an intrinsic part of the pathologic evaluation of that tissue,” he added. “While the testing used for that needs to accurate, how it is used falls within the responsibilities of the pathologist.”

Still Time to Complete 2011 Practice Characteristics Survey

The College continues to urge all CAP fellows to complete the 2011 Practice Characteristics Survey, as it is one of the College’s most important initiatives to track and report 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 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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