College of American Pathologists
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  STATLINE — CAP’s Bi–Weekly Federal and
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September 17, 2009  •  Volume 25, Number 19
Next Issue: October 1, 2009
© 2009 College of American Pathologists

In This Issue:

Healthcare Leader, Former Senator Tom Daschle to Address CAP Members
at CAP ’09

Senate Finance Committee Releases Long Awaited Healthcare Reform Proposal
CAP Commends President on Recognizing Need for Medical Liability Reform
California Legislature Passes Bill Recognizing Accreditation
CAP Renews Commitment to Seek Legislative Reform of the Sustainable Growth
Rate Formula

Support Builds in Senate for CAP’s Proposed Demo Project on Role of Pathologist-initiated Consultation
Announcement: White House Invites Physicians for Conference Call in Insurance Tonight

Healthcare Leader, Former Senator Tom Daschle to Address CAP Members at CAP ’09

Former Senate majority leader, health policy advisor and author Tom Daschle has been named as a speaker at CAP ’09, held Oct. 11-14 in Washington, D.C., where he will address the CAP House of Delegates and Residents Forum Luncheon.

Daschle, one of the nation’s leading healthcare policy experts, has been a consistent leader in efforts to reform the US healthcare system during his decades of legislative service.

During his time as Senate Majority and Minority Leader, Daschle was instrumental in the passage of College-supported bills, including legislation aimed at preventing discrimination based on genetic testing—a hurdle that could have prevented patients from obtaining the data in fear of discrimination by employers and insurers.

For more information on CAP’09, please visit the CAP ’09 website.

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Senate Finance Committee Releases Long Awaited Healthcare Reform Proposal

Senator Max Baucus (D-MT) released the long-awaited Senate Finance Committee proposal for healthcare reform legislation—an $856 billion, 10-year plan that already has faced strong criticism from Republicans and some Democrats.

While the bill contains a positive two-year extension of the TC grandfather, concerns have been raised over an only temporary fix for the Sustainable Growth Rate formula, budget neutral incentives for primary care that may likely reduce rates for specialties, and a new annual fee for laboratories amongst other provisions.

Primary Care and General Surgery Bonus

A provision in the legislation would establish a primary care bonus for certain evaluation and management services of 10 percent over the fee schedule amount for five years. In addition general surgeons practicing in a health professional shortage area (HPSA) would receive a 10 percent bonus on major procedure codes for five years.

Half of the cost of the bonuses would be offset through across-the-board reductions to all other codes, except for physicians who practice in a HPSA designated zip code.

CAP requested that any bonus payments targeted to specific specialties or services must be paid for with new funding. While this provision only requires half of the bonus to be paid for through cuts to other physicians, it also expands the bonus included in earlier language from 5 to 10 percent. Historically, increases to evaluation and management services effective in 2007 paid for by budget neutrality adjustments such as those outlined in proposed bill resulted in an eight percent cut in payment to hospital based pathologists.

Sustainable Growth Rate Formula

The proposal calls for a temporary 0.5 percent increase in Medicare physician payment rates in 2010, while the conversion factor for 2011 and following years would be computed as if the increase had never applied.

CAP is seeking a permanent solution to the flawed SGR, as unless Congress acts again, Medicare physician payments will be cut 21 percent next year and by more than 40 percent over the next decade. Therefore, failure for any action on this matter would lead to large payment cuts for all physicians.

Annual Fee For Clinical Laboratories

Under the proposed bill, an annual fee would be imposed on any covered entity offering clinical laboratory services in the United States. The aggregate fee on the clinical laboratory sector would be $750 million annually, beginning in 2010. The fee would be apportioned among the covered entities each year based on each entity’s relative market share of covered domestic laboratory service revenue for the prior year.

There are no provisions in the Baucus framework that would impose a fee on any physician service’the singling out pathologists and imposing a fee on their physician services would not only be unfair, but would raise serious problems and concerns among the physician community about the precedent for “taxing” physician services.

The bill also does not include exemptions sought by CAP, as the College believes that the fee should not apply to revenue derived from the physician fee schedule. Additionally, an exemption for small laboratories is needed and could be accomplished by allocating the laboratory fee based on net revenues in excess of $50 million derived from tests listed on the CPT clinical laboratory fee schedule.

Creation of a Medicare Commission

An independent Commission would be established to develop and submit proposals to Congress to extend Medicare solvency, slow cost-growth, and improve quality. Fifteen members would be appointed by the President and confirmed by the Senate. MedPAC would continue to exist in its current for as an advisory body to Congress.

CAP is opposed to giving such a new government entity sole authority to determine Medicare payment rates, however, as the ultimate decision on payment rates should continue to be left to Congress, with the input of MedPAC. This allows for all physicians, including pathologists, who are on the front lines of diagnosis and treatment of serious disease, to collectively debate and discuss with their Members of Congress how Medicare policies affect their practice and the patients they serve.

The Next Step

The Senate is anticipated to act on this legislation as early as next week, and debate is expected to be contentious.

The College will continue to work with legislators and the executive branch to address these concerns for pathologists, and will provide current updates in future issues of Statline and other special reports.

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CAP Commends President on Recognizing Need for Medical Liability Reform

President Obama acknowledged the need to reform the nation’s medical liability system during his Sept. 9 speech to a Joint Session of Congress, drawing the support of the CAP and other physician associations for directing the Department of Health and Human Services to take action on this critical issue.

The College and other physician associations followed up the speech by sending a letter to Congress urging the development of pilot projects to determine the effectiveness of liability reform alternatives, including health courts, early disclosure and compensations programs, administrative determination of compensation model, expert witness qualifications, and liability protections for use of evidence-based medicine guidelines.

“The cost of our medical liability system is born by everyone as defensive medicine adds billions of dollars to the cost of health care each year, which means higher Medicare spending and health insurance premiums for patients,” read CAP’s letter of support. “We look forward to working with you and your Administration to advance effective medical liability reforms.”

Medical liability reforms have already been demonstrated to work at the state level, such as California’s three-decade old Medical Injury Compensation Reform Act of 1975. Since Texas enacted similar liability reform, medical malpractice premiums in the state have also significantly decreased. The College applauds the Administration in proposing these beneficial programs for the federal level.

To view the complete letter to the president, please visit the CAP Advocacy website under “Letters to Policymakers.”

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California Legislature Passes Bill Recognizing Accreditation

Legislation to establish a formal process for state recognition of laboratory accreditation passed the California legislature Sept. 8, and now awaits signature into law by the governor.

Senate Bill 744 was supported by the state’s laboratory oversight department, which took take the legislative action after a 2008 state audit recommended formal recognition of laboratory accreditation as a cost savings measure to obviate routine state inspections of accredited labs.

Senate Bill 744 includes language advocated by the California Society of Pathology (CSP) and CAP that provides a statutory deadline of January 1, 2011 for the department to begin to accept applications of laboratory accreditation organizations for formal recognition, provided the standards of such organizations are “equal to or more stringent than, state requirements for licensure and registration.”

Under the legislation, laboratories accredited by approved accreditation organizations will not be subject to the routine state inspections, provided the laboratory agrees to allow the state to have access to any accreditation record the department may require, including notification of every violation of condition-level requirements.

In addition, the department continues to have full authority to conduct complaint investigations, sample validation inspections, and to require submission of proficiency testing results to ensure compliance with state standards.

The governor is expected to sign the bill into law without controversy.

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CAP Renews Commitment to Seek Legislative Reform of the Sustainable Growth Rate Formula

The College once again pledged its commitment to reforming the flawed Sustainable Growth Rate formula by joining more than 20 other healthcare and medical associations in urging the US Senate to include physician payment reform in any healthcare legislation passed by Congress.

In the letter Sept. 8, CAP expressed appreciation for the Senate Finance Committee’s acknowledgement that the SGR must be addressed, but also raised concern that the current proposal will leave the underlying problem in place.

CAP believes failure to correct the problem, coupled with newly proposed initiatives, will result in further payment cuts.

“Initiatives to improve care coordination, promote primary care and preventive services, and encourage wellness initiatives will ultimately generate system-wide savings by avoiding hospitalizations and other costly interventions,” reads the letter. “However, in the short term the volume of physician visits and other services will increase. If the SGR remains in place, the activities policy makers want to promote will trigger additional payment cuts.”

Instead, CAP urged Senators to establish a sustainable foundation to build broader health system reforms, which would require the full, permanent repeal of the SGR and its replacement with a payment system more closely tied to the Medical Economic Index.

To view the complete letter, please visit the CAP Advocacy website under “Letters to Policymakers.”

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Support Builds in Senate for CAP’s Proposed Demo Project on Role of Pathologist-initiated Consultation

Senators Russ Feingold (D-WI) and Daniel Inouye (D-HI) signed on to a letter to the Senate Finance Committee calling for a demonstration to promote collaborative, coordinated diagnostic testing and shed light on test selection and treatment.

The letter supports CAP’s proposed demonstration project to determine the effectiveness of pathologist-initiated consultations in reducing healthcare costs while improving the quality of treatment for patients in patient-centered care models.

Senators Kirsten Gillibrand (D-NY) and Johnny Isakson (R-GA) sent the original letter to Senators Max Baucus (D-MT) and Charles Grassley (R-IA), the chair and ranking member of the Senate Finance Committee. Shortly after, Senator Saxby Chambliss (R-GA) also signed on his support of the demonstration project.

“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.”

The College will continue to work with Senate leadership to establish a demo project for the role of pathology in coordinated care models, and will keep members informed of future developments in upcoming issues of Statline.

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Announcement: White House Invites Physicians for Conference Call in Insurance Tonight

The White House invites you to join us for a physicians call tonight on health insurance reform with senior administration officials. The call will be hosted by members of the White House Office of Public Engagement and the White House Office of Health Reform.

When: Tonight September 17th, 2009 from 7PM-8M EDT
Call in Number: (800) 288-8960
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