College of American Pathologists
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August 29, 2013  •  Volume 29, Number 18
Next Issue: September 12, 2013
© 2013 College of American Pathologists

In This Issue:

As Deadline Approaches, CAP Continues Campaign to Reverse CMS Proposed 2014 Cuts

With just one week until the September 6 deadline for comments to the Centers for Medicare and Medicaid Services (CMS) on the proposed 2014 physician fee schedule cuts, CAP members and staff continue efforts to prevent these misguided cuts from taking effect.

CAP Efforts

Michael S. Brown, MD, FCAP, shows Rep. Steve Daines, (R-Mont.) cancer cells while touring the Yellowstone Pathology Institute lab on Aug. 27.CAP Members

CAP is mobilizing its members to gather their support, having distributed five action alerts asking for comments on the proposed rule and encouraging them to contact their Member of Congress to urge them to intervene and stop CMS from moving forward with these cuts. To date:

  • 759 CAP members have responded to our alerts.
  • 2,445 comments have been sent to Members of Congress.
  • 3,028 comments have been made on the CMS website with a large portion coming from pathologists.
  • 19 in-district meetings with Members of Congress have been completed, with several others scheduled over the next two weeks.

On Tuesday, August 27, physicians at the Yellowstone Pathology Institute in Billings, Mont. called on U.S. Representative Steve Daines (R-Mont.) to help fight the proposed reimbursement cuts.

Daines, who spent an hour visiting with physicians and touring the lab, asked for feedback and clear examples of how the proposed cuts would impact patients and the Institute.

Local television news station KULR8 and the Billings Gazette attended the tour. Read more about the visit.

Coalition Partners and Members of Congress

CAP is working with our coalition partners to finalize a letter for Members of Congress to sign onto and send to CMS. Our goal is to get as many Members of Congress as possible to sign on to the letter. Once finalized, CAP will send an action alert to all CAP members asking them to contact their Member of Congress and urge them to sign this letter as well.

CAP continues to coordinate our effort with additional partners, including the American Medical Association (AMA) and other impacted medical specialty organizations. CAP has also held several meetings with clinical laboratory and diagnostics industry groups to share information on grassroots activities, meetings with Members of Congress and meetings with CMS.

Finally, on September 18, CAP will hold a “fly-in” to Capitol Hill to target key Members of Congress.

Centers for Medicare and Medicaid Services (CMS)

On August 23, CAP sent a joint letter to CMS Administrator Marilyn Tavenner strongly opposing Medicare reimbursement cuts to pathology services included in the proposed rule.

According to the letter, the proposal includes changes that will adversely impact a broad array of diagnostic pathology tests, which are critical in the diagnosis and treatment of many patients each year. Finalization of the proposal could also compromise the access of hundreds of thousands of patients to needed testing. The policy would tie payment rates for some pathology services on the Physician Fee Schedule to rates paid to hospitals’ outpatient departments. By the agency’s own estimate, the change would cut payment rates by an average of 26 percent, and some of the most common services would be cut by nearly 75 percent.

CAP was one of eight organizations that signed on to the letter, including AdvaMedDx, the American Association for Clinical Chemistry (AACC), the American Clinical Laboratory Association (ACLA), the American Society for Clinical Pathology (ASCP), the Association for Molecular Pathology (AMP), the Association of Pathology Chairs (APC) and the Coalition to Preserve Access to Cancer Diagnostic Services (CPACDS). In the letter, these groups argued that the proposal will adversely impact diagnostic pathology tests critical to successfully diagnosing and treating patients with a wide variety of conditions.

On August 27, members of CAP’s Economic Affairs Committee met with CMS officials Marc Hartstein, MPP, Director of CMS’ Hospital and Ambulatory Policy Group, and Steve Phurrough, MD, MPA, Director of CMS’ Coverage and Analysis Group. Jonathan Myles, MD, FCAP, Chair of the Economic Affairs Committee, presented CAP’s principal arguments on the policy, including whether the proposed changes are consistent with CMS’ statutory authority; the economic impact of the proposal on pathologists and laboratories; and potential unintended consequences for patients’ access to care. CAP also shared concerns with assumptions CMS used to re-value the technical component (TC) of anatomic pathology code 88305, which was cut by 52 percent in CMS’ final rule for the 2013 Physician Fee Schedule.

How You Can Help?

Your help will be crucial in fighting these proposed cuts while the 60-day comment period is underway. CAP is analyzing data pertaining to the proposed rule and will continue to provide additional information. You can help by submitting your comments to CMS before the September 6 deadline. To submit comments:

  • Go to
  • Go to search and type in “RIN: 0938-AR56”.
  • Click on the “Comment Now” button (then make your comment).

This issue remains a top priority for CAP, our members and our partners, and significant resources are being expended by everyone involved. We will continue to keep you updated on our ongoing advocacy efforts.

CAP Gathers Comments on CMS Move to “Bundled Payments”

CAP is currently analyzing CMS’ plan in the 2014 proposed rule for the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System, which, if finalized, would shift more hospital outpatient fee-based services into bundled payments. The plans were announced July 8.

If adopted, separate fee schedule payments to hospital outpatient departments will be eliminated for most clinical lab tests and anatomic pathology technical services. Instead, payments for these tests and services would be merged into one single facility payment. CMS proposes to include in the new bundled payment many other items and services outside of pathology, including certain imaging services, durable medical equipment, and medical supplies that are currently billed separately from the ambulatory payment classification (APC) payment. If finalized, these changes will take effect on January 1, 2014.

CMS notes the purpose of the proposal is to encourage greater efficiency, and is based on the concept that lab tests that are integral, ancillary, supportive, dependent or adjunctive to the primary services provided in the hospital outpatient setting should be packaged with the primary service.

But, many experts expect that the transition from separate payments to bundled or packaged payments will ultimately result in lower reimbursements, and create new administrative costs by forcing hospital outpatient labs to negotiate with their hospital owners for a portion of the bundled payment.

Clinical lab and pathology tests for hospital outpatients could wind up being reimbursed at a fraction of the amount they are currently paid via the fee-for-service method. It has been reported that hospital outpatient labs derive 35 to 60 percent of their revenue from Medicare fee schedules, so the change to packaged payments will have a dramatic impact on labs.

CMS Fixes Same-Day Payment Issue for Technical Component of Pathology Services

CMS recently announced a revision to its previous claim edit that denied payment for the technical component (TC) of pathology services occurring on the same day as an outpatient hospital visit.

The edit, which was enacted July 1, 2012, instructed Medicare Part B contractors to install a claim edit to detect inappropriate billing of TC anatomic pathology services. Contractors used what is known as the “Common Working File” (CWF), a database that accumulates Medicare Part A and Part B claims and can determine whether multiple providers are billing Medicare for services on the same day to the same beneficiary.

While the edit sought to increase efficiency and reduce costs, it failed to take into account the fact that beneficiaries sometimes go to a doctor’s office or other non-hospital facility the same day they visit a hospital for a totally unrelated medical service, leaving a legitimate laboratory or pathologist’s TC charge vulnerable to being denied.

Over the past year, laboratories across the country have successfully appealed many of these unfounded denials, which persuaded CMS the edit is flawed.

On August 9, CMS released Transmittal 1276 (Change Request 8399), announcing a modification to the edit, which will be effective January 1, 2014 and implemented by contractors on January 6, 2014.

Under the request, Medicare contractors will not be required to identify previously denied claims for adjustment. However, contractors must reopen and adjust any previously denied claims that are brought to their attention and involve a claim history containing a non-hospital POS.

Pathologists who experienced these denials should notify their Medicare contractor of any denied claims that meet the exception criteria. Learn more about these changes.

New Hampshire Exempts Clinical Labs from Genetic Test Restrictions

On July 24, New Hampshire Governor Maggie Hassan signed into law SB 135, which included an amendment to shield pathologists from informed consent requirements of a patient’s genetic information during the course of laboratory testing. CAP has been monitoring this legislation closely since the amended bill passed the New Hampshire legislature in June.

CAP and the New Hampshire Society of Pathologists (NHSP) collaborated with the state medical society and the Senate sponsor of SB 135 to adopt the amendment, which was amended in the House and removed an exemption for physicians from informed consent requirements when discussing or disclosing genetic test information within their medical practice or hospital.

CAP and NHSP were concerned that if the law was repealed, clinical laboratories and pathologists would need an additional informed consent from a patient prior to discussing genetic testing information with another health practitioner or requesting a second opinion. A legislative committee unanimously adopted the amendment supported by CAP and NHSP so that the “prior written and informed consent” requirement was not “construed to regulate or apply to genetic testing or genetic analysis” of a patient specimen by a clinical laboratory in New Hampshire.


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