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

August 20, 2009  •  Volume 25, Number 17
Next Issue: September 3, 2009
© 2009 College of American Pathologists

In This Issue:

Senators Rise To Support Demo Project for Pathologists Role As Recess Comes
to End

White House Proposes Limiting Congressional Influence On Medicare
Reimbursement Rates

Recommendations for Improving Stark Law Issued by American Health
Lawyers Association

CAP and Penn Association of Pathologists Educate Leaders at National Conference of State Legislatures
FTC Delays Red Flags Rule As Part of Business Education Campaign
Draft Technology Assessment of Laboratory Tests Released for Comment

Senators Rise To Support Demo Project for Pathologists Role As Recess Comes to End

As Senators and Representatives prepare to return to Washington in September amidst tumultuous debate on the details of health care reform, legislators continue to commit their support for including in America’s Affordable Health Choices Act of 2009 a demonstration project to evaluate the role of pathologists in patient-centered coordinated care models.

Senators Kirsten Gillibrand (D-NY) and Johnny Isakson (R-GA) sent a letter to Senators Max Baucus (D-MT) and Charles Grassley (R-IA), the chair and ranking member of the Senate Finance Committee, calling for such a demonstration to promote collaborative, coordinated diagnostic testing and shed light on test selection and treatment.

“There are approximately 1200 genetic tests today, and genetic discoveries will continue to create powerful, but costly, tests that will diagnose disease and identify new preventative measures and therapeutic interventions,” read the letter. “In order to ensure these tests and others are used effectively and to improve care, it’s important to provide for better coordination of diagnostic testing.”

While the Senate Finance Committee has not yet released a formal version of America’s Affordable Health Choices Act of 2009, the indicators suggest that the House will push back its full vote on the legislation until late September—giving legislators additional time to negotiate details and possibly add amendments like the one for a pathology demonstration project.

Three weeks ago the House of Representatives adjourned for its summer recess after three key committees (Ways and Means, Energy and Commerce, and Education and Labor) passed different versions of the far-reaching healthcare reform legislation, H.R. 3200.

However, before the legislation can be voted on by all Members of the House of Representatives, the different bills passed out of the three Committees’ will have to be melded into one. Due to controversial compromises on a public plan option made between progressive Democrats and the fiscally conservative Blue Dogs, this could be challenging.

CAP Call to Action

As part of the CAP’s Health Care Reform Agenda, we are urging Members of the Senate to include language in health care reform legislation, America’s Affordable Health Choices Act of 2009, directing CMS to conduct a Medicare demonstration project to evaluate a coordinated and collaborative approach to diagnostic test selection and therapy management.

Senators Gillibrand and Isakson are anchoring this letter, but we need to add more Senators to this growing list of supporters. Call your Senators today and urge them to add their signature to this letter.

Log onto to urge your Senators to add their name to the Gillibrand/Isakson Letter in support of the Pathology Medicare Demonstration Project.

Please feel free to leave a voicemail for the Health LA and be sure to state your name and practice. Note that the first person who answers the phone is not the Health Legislative Assistant.

After making your phone call, please send Chris Sherin an email, summarizing your conversation or voicemail.

Thank you for taking time out of your busy schedule to help advance the CAP’s legislative agenda.

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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.

While the proposals were not added as an amendment into any of House versions of America’s Affordable Health Choices Act of 2009, H.R. 3200, they are expected to be reconsidered when the Senate Finance Committee marks up the legislation after the August recess.

The first proposal would broaden the powers of the current 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 (IMAC) that would make Medicare recommendations to the President, which the President would pass along to Congress.

Both proposals aim to curb Congress’ ability to boost Medicare payments based on political considerations.

The Independent Medicare Advisory Council would be comprised of five presidentially appointed, congressionally approved members, most likely physicians or others with special medical expertise. Their primary role would be to set payment rates for Medicare Part A and Part B through issuance of two annual reports. Congress could then choose to block these proposals within 30 days, and the president would retain an up-or-down veto power over the agency.

The Medicare Payment Advisory Commission currently acts only as an advisory body to congress, and has 17 members that bring diverse expertise in the financing and delivery of health care services. The Commission is supported by an executive director and a staff of analysts, typically with backgrounds in economics, health policy, public health, or medicine.

“We (want) to set up what we’re calling an IMAC, an independent medical advisory committee, that would on an annual basis provide recommendations about what treatments work best and what gives you the best value for your health care dollar,” stated President Obama at a recent townhall discussion on healthcare reform. “And this is modeled on something called MedPAC, terrific recommendations every year about how we could improve care to reduce the number of tests or to make sure that we’re getting more generic drugs in the system if those work and are cheaper.”

The White House Office of Management and Budget originally proposed the legislation, the Independent Medicare Advisory Council Act of 2009, after a report released by MedPAC entitled “Improving Incentives in the Medicare Program” first explored future directions for the organization.

The College sent a letter to Congressman Charles Rangel (D-NY), chairman of the House Ways and Means Committee, opposing the recommendations, which can be viewed on the CAP Advocacy website, under Health Care Reform.

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

Recommendations for Improving Stark Law Issued by American Health Lawyers Association

The Public Interest Committee of the American Health Lawyers Association sponsored a “Convener on Stark Law” in Washington, D.C. April 24 and June 30, providing a forum for a candid discussion of efficacy of the federal physician self-referral statute, known as Stark Law, and to consider possible improvements to the law.

Thirteen attorneys and two academics provided guidance on the benefits, challenges and unintended consequences arising from the Stark Law to staff from various regulatory agencies, with the general consensus being that modification of the reimbursement rules would be among the most effective means for controlling utilization and costs.

Most participants agreed that the Stark Law was enacted under the assumption that financial incentives skew a physician’s judgment, increases utilization, undermines competition, and potentially compromises quality. Several participants were also critical of Stark Law’s in-office ancillary services (IOAS) exception, however, which they felt is inconsistent with the articulated purposes of the legislation.

Suggested reimbursement reforms proposed at the Convener Session to combat these potential lapses included:

  • decreasing reimbursement for all ancillary services provided through a physician’s group practice
  • adopting a declining reimbursement formula for particular modalities tied to volume on the theory that the provider’s margin increases dramatically above a certain volume threshold
  • decreasing payments for high margin services
  • limiting the number of entities that are eligible to bill for certain lucrative services by implementing stringent credentialing requirements or
  • bundling the payment plans that promote shared risk among providers involved in an episode of care.

In addition to the participants, representatives from the Office of the Inspector General, the Centers for Medicare and Medicaid Services, the Department of Justice and the Department of Health and Human Services were also on hand for the Convener Session.

To view the complete white paper, please visit the AHLA website.

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CAP and Penn Association of Pathologists Educate Leaders at National Conference of State Legislatures

The Pennsylvania Association of Pathologists joined the College at the National Conference of State Legislatures’ annual Legislative Summit in Philadelphia, PA, July 21-23, to educate legislators, staff and business from across the country on the policy issues and practices of pathologists.

The delegation, in CAP’s ninth year of participation, provided more than 3500 legislators, staff and businesses information on the College’s mission, advocacy agenda and the role of the pathologist in patient care.

In addition, several pathology-related demonstrations were conducted for the attendees in the exhibition hall, including a visual analysis of specimens from microscope and video, as well as tours of the College’ls website and

“Participating in the NCLS Legislative Summit gives pathologists the opportunity to interact face-to-face with state legislators from throughout the nation, allowing for effective communication and education on the issues affecting pathologists and the patients we care for,” said Richard Gomez, MD, FCAP, chair of the CAP Federal and State Affairs Committee.

The CAP delegation was represented by Dr. Gomez and Mike Troubh, CAP State Affairs manager. The Pennsylvania Association of Pathologists was represented by president Herman Hurwitz, MD, FCAP, Cheryl A. Hanau, MD, FCAP and Leonas G. Bekeris, MD, FCAP.

Comment On This Article

FTC Delays Red Flags Rule As Part of Business
Education Campaign

The Federal Trade Commission announced it will delay enforcement of the Red Flags Rule until Nov. 1, 2009, in order to give creditors such as some physicians and financial institutions more time to review newly released guidance before developing and implementing written Identity Theft Prevention programs.

The new guidance, which will provide additional clarification as to whether businesses are covered by the Rule and what they must do to comply, is part of an FTC effort to “redouble” its educational assistance and ease transitions.

While the FTC continues to include physicians in its definition of “creditors” required to implement written identify theft prevention and detection programs, an official from FTC has indicated that most pathology practices are considered to be at low risk for identify theft.

To determine your risk level and need for compliance, however, CAP recommends you ask your legal counsel for advice and/or read the FTC booklet, Fighting Fraud with the Red Flags Rule: A How-To Guide for Business.

In November 2007, the FTC issued a set of regulations, known as the Red Flags Rule, requiring that certain entities known as “creditors” develop and implement written identity theft prevention and detection programs to protect consumers from identity theft. CAP supports AMA’s efforts to educate the FTC and Congress that physicians are not “creditors” and therefore should not be subject to this rule.

For more information, visit the FTC’s website on the Red Flags Rule.

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Draft Technology Assessment of Laboratory Tests Release
for Comment

The Agency for Healthcare Research and Quality Draft Technology Assessment (TA) on laboratory developed tests entitled, “Quality, Regulation, and Clinical Utility of Laboratory-developed Tests” is now available for review.

The College will be providing comments on the assessment, which will be reported in a future edition of Statline.

The draft TA can be found at

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