Debt Ceiling Deal: Medicare Doc Cuts of 2% Remain in Play
Medicare providers could face 2% in cuts beginning January 1, 2013, under the debt ceiling legislation recently passed by Congress and signed by Pres. Obama on Aug. 2. Under the bill, the 2% cut would be enacted if a bipartisan House-Senate committee (Joint Committee) fails to report a plan by Nov. 23, 2011, that would produce savings of at least $1.2 trillion over the next decade. If Congress fails to enact the committee’s plan by Dec. 23, 2011, automatic cuts of this same magnitude would be implemented in fiscal year 2013.
The Budget Control Act (S. 365) passed the House by a vote of 261 to 161 on Aug. 1; the Senate passed the bill by a vote of 74 to 26 the following day. Under the legislation, the President will be allowed to raise the debt ceiling by $900 billion, linked to roughly $1 trillion in upfront cuts to discretionary spending over a 10-year window. The President can raise the debt ceiling an additional $1.5 trillion if both chambers pass a deficit reduction plan from the Joint Committee totaling at least $1.5 trillion or send a balanced budget amendment to the states for ratification. The President could also increase the debt ceiling anywhere between $1.2 trillion and $1.5 trillion if the Joint Committee puts forth a plan of savings in that range.
The 12-member Joint Committee, which will be appointed in the next couple of weeks, is charged with crafting a deficit reduction package of at least $1.2 trillion by the November deadline. This savings can include cuts to entitlement programs such as Medicare and Medicaid, including physician payments based on the SGR. Congress is then required to act on this package without amendments and with a simple majority by the December deadline.
Failure by the Joint Committee to report savings of at least $1.2 trillion or failure by Congress to enact such savings will result in automatic across-the-board spending cuts beginning January 1, 2013. The cuts could total as much as $1.2 trillion over 10 years to offset the same amount of increase to the debt ceiling, and would be split between defense and non-defense reductions. Under the trigger, Medicare benefits are protected, along with Medicaid, social security, and veteran’s benefits. However, Medicare providers are not protected and could see cuts in reimbursement as high as 2%.
The potential for additional cuts in reimbursement for Medicare providers comes at a time when physicians are already facing a 29.5% payment cut next year due to the sustainable growth rate’s (SGR) flawed formula.
SGR’s future is far from clear, as a long-term fix was not included in the debt ceiling legislation. However, the Joint Committee still has the authority to address the SGR problem as part of its recommendations to Congress. This creates both an opportunity and a challenge. While the Joint Committee process provides a vehicle to overhaul the SGR—and both sides of the aisle say they want this solved—the $300 billion price tag for a permanent fix is a high hurdle, especially in the current cost-cutting environment. Medicare patients will need continued access to quality care and the CAP will continue to advocate to stop the impending cut and work for a long-term solution.
Statline will continue to follow this unfolding issue.
Federal Appeals Court Upholds Gene Patents, But Not Method Claims
Companies can patent genes, but cannot patent methods to compare the gene sequences, ruled the three-panel U.S. Court of Appeals for the Federal Circuit in a long awaited decision on the Myriad gene patent case on July 29.
The 2-1 decision partially reversed a March 2010 decision from a lower federal court invalidating the company’s gene patent claims. Represented by the American Civil Liberties Union (ACLU), the College was a co-plaintiff in this suit challenging gene patents on human DNA, specifically Myriad Genetics’ patent claims on BRCA 1 and BRCA 2 genes. The CAP was an appellee before the U.S. Court of Appeals.
While the March decision determined that Myriad’s gene patents were invalid, this recent decision noted that the claims pertain to DNA isolated from the body and are therefore patent eligible. This is “because the claims cover molecules that are markedly different—have a distinctive chemical identity and nature—from molecules that exist in nature”, which are not patent eligible, wrote Judge Lourie on behalf of the court.
Nevertheless, this most recent ruling struck down approximately half of the company’s patent claims, explained Chris Hansen, a staff attorney with the ACLU Speech, Privacy, and Technology Project. “Virtually all the method claims, with the exception of one, went down, even though we didn’t get the gene patents per se,” he told Statline. These claims are distinct from the actual gene patents, as they pertain to patents on methods used to compare gene sequences.
Moving forward, the original plaintiffs have three options, explained Hansen: petition for a rehearing before the same three-panel of judges; petition for a rehearing “en banc”, which means before the entire Court of Appeals for the Federal Circuit; or petition for the U.S. Supreme Court to hear the case. It’s unclear as of now what direction those plaintiffs will choose, he added.
Hansen declined to speculate about the Supreme Court’s interest in the case. However, there are a number of key reasons why the Supreme Court may opt to hear arguments, explained Daniel Vorhaus, an attorney with Robinson Bradshaw & Hinson, P.A. (New York City) and editor of the Genomics Law Report. “While the Supreme Court rejects far more appeals requests than it accepts, the attention paid to Myriad and the fact that the Supreme Court has never squarely addressed the patentability of genes means that a Supreme Court appeal in this case should have a better chance than most of being granted,” he told Statline.
IOM Recommends FDA Develop New 510(k) Device Review Process
An Institute of Medicine (IOM) Committee is recommending that the FDA scrap the current 510(k) process, claiming that it lacks the legal basis to be a reliable premarket screen of the safety and effectiveness of moderate-risk medical devices, including diagnostic tests. The IOM issued these recommendations following analysis of the current 510(k) process conducted upon request by the FDA.
To improve this 35-year old process, the IOM is recommending that the FDA develop an integrated premarket and postmarket framework providing a reasonable assurance of safety and effectiveness throughout a device’s life cycle. However, rather than modifying the current framework, the IOM recommends the agency start anew. “The IOM committee does not believe that the FDA should use its sparse resources to modify the 510(k) clearance process,” stated the committee’s summary. “Once adequate information is available to design an appropriate medical-device regulatory framework, Congress should enact legislation to do so.”
In response, the FDA disagreed with this call to develop a new review process, noting that some of the changes IOM laid out are already underway at the agency. Nevertheless, the agency announced they would receive public comments on the recommendations.
“FDA believes that the 510(k) process should not be eliminated but we are open to additional proposals and approaches for continued improvement of our device review programs,” said Jeffrey Shuren, MD, Director of the FDA’s Center for Devices and Radiological Health, in a public statement.
It appears that one of the IOM’s primary reasons for recommending that the FDA develop a new 510(k) process is because it didn’t feel that the determination of the safety and efficacy of these devices was sufficient, explained CAP Governor Gail H. Vance, MD, FCAP, who is with the Indiana University Medical School’s Department of Medical and Molecular Genetics. She added that the IOM also doesn’t appear to believe that the FDA has facilitated innovation of the 510(k) process and should develop additional measures of tracking the “relationship among regulation, innovation, and patient health and safety throughout the device life cycle”.
Dr. Vance also identified the similarities between what the IOM wants the review process to be and the College’s proposal for oversight of laboratory developed tests (LDTs). “Our LDT oversight proposal closely parallels the goals that the IOM has set forth for the FDA in terms of regulating class II devices via the 510(k) process,” she explained to Statline. The CAP’s LDT proposal is risk-based, contains special controls to ensure that the device adheres to its intended use, and calls for postmarket monitoring. These are goals that the IOM laid out for the 510(k) process in their recommendations.
“Given these similarities, I really see an opportunity for the College to help inform this new 510(k) review process,” she explained.
CAP Supports Confidentiality Coalition’s Concerns on Proposed HIPAA Changes
The HHS’s Office of Civil Rights (OCR) is proposing changes to the Health Insurance Portability and Accountability Act (HIPAA) Security Rule that amongst other requirements, would oblige covered entities, including physicians, to generate an access report about use of electronic patient protected health information (PHI) both inside and outside of the physician’s office. This obligation is in addition to the existing obligation under HIPAA to provide certain disclosures of PHI or an “accounting of disclosures” upon patient request.
The Confidentiality Coalition, of which the College is a member, outlined concerns regarding the proposed changes to the rule. It expressed its belief “that the proposed rule—particularly the requirement for the new access report—is fundamentally misguided” and reflects both an inaccurate and unreasonable interpretation of HIPAA, as well as insufficient knowledge on the part of OCR of the capabilities of the applicable technology in the health care industry. The concerns were detailed in an Aug. 1 letter to the OCR from this group, which is headed up by the Healthcare Leadership Council.
“Collectively, the members of the Confidentiality Coalition believe strongly in the protection of patient privacy interests,” stated the letter. The coalition historically has supported many of the provisions of the HIPAA Privacy and Security rules as reasonable and appropriate protections for privacy with a balanced burden on covered entities and their business associates. “We believe that this proposed access report will provide little benefit to individuals…and that this rule—if implemented as written—will require enormous new technology efforts and expenditures from virtually all entities in the healthcare industry (as well as their business partners), with substantial ongoing burden,” the letter went on to explain.
This administrative burden could also divert information technology (IT) resources from patient care, as well as away from implementing federal HIT programs, noted the Coalition. “The limited information technology resources that exist throughout the health care industry also will be diverted from implementation of new and more effective health information technology,” explained the letter.
HHS Looking to “Modernize” Human Subject Research Protections
The HHS Secretary is requesting comments on how to update current regulations for protecting human subjects participating in research, according to a recent advance notice of proposed rulemaking (ANPR) published in the Federal Register on July 26.
Even though the regulations have been amended since initially developed 20 years ago, they have not kept pace with the proliferation of multi-site clinical trials, as well as research involving the Internet, biological specimen repositories, and the use of advanced technologies, such as genomics.
Of particular interest to the College are issues related to use of biological specimens. Indeed, the ANPRM notes that use of biological specimens is one of the most significant changes under consideration. Specifically, changing the regulations to require written consent for research use of any biospecimens collected for clinical purposes after the effective date of the new rules, such as research with excess pathological specimens. While the CAP policy supports donation of biospecimens for research, respect for the rights of the donor requires that informed consent be obtained. The CAP is preparing comments to the HHS in accordance with current policy on informed consent.
CAP Center Seeks Public Comments on Validating WSI Systems
CAP’s Pathology and Laboratory Quality Center, also known as The CAP Center, has released draft recommendations on Validating Whole Slide Imaging Systems for Diagnostic Purposes in Pathology. The comments are due Aug. 21.
While WSI is increasingly being used for diagnostic purposes, education, and research, concern has arisen whether this technology can replace the conventional light microscope as the method by which pathologists view patient samples and render a primary or consultative diagnosis. Validation of WSI is important to ensure that diagnoses rendered using digitized images (slides) are equivalent to those rendered from glass slides. There are currently no standardized guidelines regarding validation of WSI for clinical diagnostic use.
For these reasons, the CAP Center convened a Work Group to address validation issues in WSI systems. Developing standardized guidelines, the Work Group believes, will improve the clinical use of WSI technology in pathology by providing assurance that these digital tools are being properly used for their intended clinical use, thereby reducing the potential risk of misdiagnosis attributed to this technology. Ultimately, the final consensus statements will be published in the Archives of Pathology and Laboratory Medicine.
David Gergen to Headline CAP ’11 House of Delegates/Residents Forum Luncheon
CNN Senior Political Analyst David Gergen will address attendees at the House of Delegates/Residents Forum Luncheon, to be held Sept. 10 during CAP ’11. This year’s CAP annual meeting will be held in Grapevine, Texas, located in the Dallas-Ft. Worth area.
In addition to his role at CNN, Gergen is the director of the Harvard Kennedy School’s Center for Public Leadership, where he is also a professor of public service. He has served as an adviser to four U.S. presidents, beginning with the Nixon White House in 1971, when he was a staff assistant on the speech writing team that included Pat Buchanan, Ben Stein, and William Safire. Gergen went on to work in the administration of Gerald Ford and as an adviser to the 1980 George H.W. Bush presidential campaign. He served as Director of Communications for Ronald Reagan and as adviser to Bill Clinton. Gergen also advised Secretary of State Warren Christopher on domestic and foreign affairs.
Gergen’s talk and luncheon is hosted by The College’s political action committee, PathPAC. Currently, PathPAC is pursuing a goal is to raise $1 million in 2011, in order to strengthen CAP’s political muscle to support its expanding and challenging legislative agenda.
To learn more about PathPAC, contact Susan Askew, CAP’s Manager of Political Programs. Also, be sure to stop by the Advocacy booth at CAP ’11 to read about the College’s federal and legislative priorities.
2011 Practice Characteristics Survey Will Close Aug. 9
Only a few days remain for all CAP fellows to complete the 2011 Practice Characteristics Survey, as the survey is slated to close on Aug. 9. It’s important for fellows to participate, 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.
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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