College of American Pathologists
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  STATLINE — CAP’s Bi–Weekly Federal and
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July 23, 2009  •  Volume 25, Number 15
Next Issue: August 6, 2009
© 2009 College of American Pathologists

In This Issue:

House Committees Pass First Legislation of the Health Care Reform Agenda
Demo Project for Pathologist-Initiated Consultations Championed in Congress
White House Proposes Limiting Congressional Influence On Medicare Reimbursement Rates
Connecticut Becomes Sixteenth State With Direct Billing Law
College Recommends CMS Payment Levels For New Codes in 2010 Clinical Lab Fee Schedule
Photos from CAP’s 2009 Advocacy School, Lobby Day and State Pathology Society Leadership Conference Now Available

House Committees Pass First Legislation of the Health Care Reform Agenda

After months of discussion, House Democrats unveiled a comprehensive health care reform bill July 14, the America’s Health Choices Act of 2009 (H.R. 3200). The bill has already passed in two of the three House committees it was introduced in, Ways & Means, and Education & Labor.

While there are relatively few surprises, the bill provides the first clear legislative language on a range of issues from expanding insurance coverage through a public plan option along with private plans as part of a health insurance exchange, to innovative concepts in coordinated care and physician payment. The latter includes new delivery system pilot programs such as the medical home and integrated provider networks referred to Accountable Care Organizations.

In its current form, the bill would halt a scheduled 21% cut in Medicare physician payments schedule for next year and replace the currently flawed sustainable growth rate (SGR) formula with an update that would remove accumulated deficits and create a fresh start, and reward care coordination and efficiency.

While these reforms are implemented, payment rates would be determined by the Medicare Economic Index, which is a measure of inflation faced by physicians with respect to their practice costs and general wage levels.

The 1018 page bill also extends the Technical Component (TC) Grandfather for two years, and narrows loopholes in fraud and abuse laws by enhancing oversight programs, and requiring compliance programs for providers and suppliers.

The price tag for implementing sweeping changes, continues to raise concern, and efforts to pass the bill in the House Energy & Commerce Committee were stalled by lawmakers, most notably by conservative Democrats known as “Blue Dogs” who opposed the estimated $1.6 trillion price tag for healthcare reform as forecast by the Congressional Budget Office, and are currently negotiating changes in the bill to produce larger cost savings and stronger delivery system reforms. The Senate Finance Committee which is also working on a bill, has yet to release a draft bill.

It is difficult to predict how the House bill will be changed as it moves through the legislative channels. However, among Washington insiders, significant attention has been given to an 18-page analysis of the legislation performed by the highly regarded Lewin Group, which predicted a broad range of negative repercussions including a total reduction in payments to providers of $316.9 billion. The analysis was commissioned by the Heritage Foundation, conservative think tank.

The American Medical Association issued a statement assailing the Lewin Group’s analysis, describing it as fatally flawed, and refuting key points and assumptions made in the report.

The House Committees on Energy and Commerce, and Education and Labor released a joint summary of the bill, while the Ways and Means Committee issued a summary of its own.

The College will continue to monitor the progress of health care reform in both the House and Senate and will keep members informed of any new developments.

Comment On This Article

Demo Project for Pathologist-Initiated Consultations Championed in Congress

The role of pathologists in improving the delivery of quality care while reducing costs should be evaluated through a Medicare demonstration project as part of any health care reform proposal, according to sixteen members of Congress who voiced their support for the measure in a recent letter to colleagues.

Specifically, the U.S. House members called for a legislatively-mandated demonstration project that would evaluate improvements resulting from pathologist-initiated consultations with clinicians on diagnostic testing and therapy management, a critical function of pathologists in proposed coordinated-care models.

“A demonstration project evaluating the role of pathologists in coordinated care models would take the important consultations we already perform informally and recognize their importance in the patient care process,” said Jeffrey Kant, MD, PhD, FCAP, a member of the CAP Economic Affairs Committee and Molecular Pathology Working Group. “The recognition of this by these members of Congress is an important first step in assuring that our critical role is valued and integrated within proposed patient care models.”

In the letter, sent to the chairmen and ranking members of the House Committees on Ways and Means and Energy and Commerce, the legislators state that in order to ensure genetic tests and others are used effectively it’s important to consider how to provide for better coordination of diagnostic testing—and unfortunately, current Medicare policy does not address this need.

Demonstration projects assess and measure the effect of potential program changes such as a refined role for pathology in health care reform proposals, and study the impact of this new model of health care delivery on cost and quality.

While the Centers for Medicare and Medicaid Services has conducted demonstration projects for a wide range of issues from the medical home model and electronic health records to adult day care and community nursing, however, no such evaluation has been performed yet to evaluate the potential role of pathologists.

“Some of us have had the opportunity to tour a laboratory in our district...It’s evident that pathology impacts virtually every part of medicine, from primary care and specialists, to surgery, preventative care, chronic disease, cancer treatment and public health,” reads the letter from members of Congress to colleagues. “A demonstration project to promote collaborative and coordinated diagnostic testing would shed light on this increasingly complex and vital part of our health care system.”

The College applauds the House members who are leading the call for this opportunity to evaluate pathologists’ role in improved models of care, and will continue to work with legislators to include an amendment in any health care reform proposal mandating CMS to conduct such a demonstration project.

To view the letter of support from the members of Congress, go to the CAP Advocacy website under Letters to Policymakers and visit the CAP website to view a listing of the members who signed the letter.

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White House Proposes Limiting Congressional Influence On Medicare Reimbursement Rates

The White House sent Congress two legislative proposals July 17 that would strengthen the role of an independent council in determining Medicare payment policy, in a clear sign that methodology for setting Medicare reimbursement rates will be a critical target in reducing costs for health care reform.

The first proposal would empower the Medicare Payment Advisory Commission (MedPAC) to determine cuts and changes to Medicare, while the second proposal would create an entirely new entity called the Independent Medicare Advisory Council that would make Medicare recommendations to the President, which the President would pass along to Congress.

While Congress would retain some authority to influence Medicare reimbursement rates, essentially limited to an up or down vote on the recommendations, both proposals aim to curb its ability to boost Medicare payments for political considerations by benefitting hometown providers.

“This is a clear indicator that the Administration wants to minimize the influence political considerations may have in the rate setting process for Medicare reimbursement,” said CAP Council on Government and Professional Affairs chair Andrew Horvath, MD, FCAP. Given the political nature of such oversight councils, it remains to be seen if this will do that.

Last year Congress replaced a schedule 10.6 percent cut in the Medicare Physician Fee Schedule with a 1.1 percent increase, overriding a Presidential veto in the process. This year, without Congressional action the fee schedule faces a 21.5 percent cut.

Medicare and Medicaid spending accounts for five percent of gross domestic product, however without reform if both programs continue to grow at the same rate over the next 40 years at the same rate as previous years, they are estimated swell to 20 percent of GDP.

The College will monitor the development of these Medicare reimbursement rate reform proposals, and will continue to inform members of their impact in future editions of Statline.

Comment On This Article

Connecticut Becomes Sixteenth State With Direct Billing Law

Connecticut Governor M. Jodi Rell signed Direct Billing legislation into law July 8 that will protect patients against “markup” charges by prohibiting an ordering physician from billing patients for anatomic pathology services performed or supervised by another physician.

H.B. 6678 was supported by the College in partnership with the Connecticut Society of Pathologists, and its passage into law makes Connecticut the sixteenth state to have a direct billing law for certain pathology service.

A violation of this law would exempt a patient or third party payor from reimbursing the provider submitting the claim. Further, a provider engaged in illegal conduct under Connecticut law can be sanctioned by the Connecticut Medical Examining Board resulting in the restriction, suspension, or revocation of a medical license.

Direct billing is consistent with American Medical Association ethics principles and has been a Medicare requirement since 1984. The bill’s passage in the Connecticut legislature and subsequent signing by the Governor continues a series of successes by the College and state society partners in enacting laws that regulate or outlaw client billing by referring physicians for anatomic pathology services.

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College Recommends CMS Payment Levels For New Codes in 2010 Clinical Lab Fee Schedule

The College made payment recommendations for new and revised CPT codes for the 2010 Clinical Laboratory Fee Schedule at a Centers for Medicare and Medicaid Services meeting in Baltimore July 14.

James Almas, MD, CAP’s CPT Advisor and vice chair of the Economic Affairs Committee, led a list of 22 presenters from pathology, laboratories and industry—providing background on each new code and College-recommended payment cross-walks and rationale for each test.

Each year the College and other organizations representing pathology and clinical laboratories develop recommendations which are each presented at the open forum—the eighth held since a 2000 budget law required the agency to annually solicit and receive public comment on payment for new CPT codes on the CLFS.

CMS sought input on new test codes and comment on whether payment for new codes should be established by using a “cross-walk” or “gap-fill” method, which the College recommended be cross-walked.

The cross-walk method is used when a new test is similar to an existing code, multiple codes or a portion of an existing test code. The gap-fill method is used when no comparable existing test is available and allows carriers to set rates for a year and evaluate those rates to set national limitation amounts.

The 2010 clinical laboratory fee schedule will be effective for services delivered Jan. 1 to Dec. 31, 2010. CMS will issue instructions and fees to Medicare carriers for its implementation during or after the last week of October.

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Photos from CAP’s 2009 Advocacy School, Lobby Day and State Pathology Society Leadership Conference Now Available

The CAP Advocacy website is now hosting photo slideshows from our 2009 Advocacy School, Lobby Day and the State Pathology Society Leadership Conference, all held in May in Washington, D.C.

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