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

September 27, 2012  •  Volume 28, Number 20
Next Issue: October 11, 2012
© 2012 College of American Pathologists

In This Issue:

CAP Leaders Outline Potential TC Changes in Sept. 18 Webinar

CMS’s current focus on scrutinizing high volume codes means that Medicare reimbursement for the technical component (TC) of the surgical pathology code family (88300-88309) is likely to be changed next year, warned leaders from the CAP’s Economic Affairs Committee (EAC) during the Sept. 18 Webinar, “Anticipating Reimbursement Adjustments: Hear CAP Experts Discuss Expected Payment Changes in 2013.” Final value determinations will be published in the final Medicare Physician Fee Schedule (PFS), which will be released in early November.

2013 Medicare Proposed Payment Changes

In addition to the TC of the 88300-88309 surgical pathology code family, CMS is proposing a number of other payment changes for 2013:

  • Cost of 7% family physician increase spread across all specialists with 1% cut to pathology (part of multiple year strategy to encourage care coordination services)
  • Additional 1% cut to pathology due to practice expense methodology change phase-in
  • Projected 27% cut due to SGR (Congress expected to avert cut)
  • Expected 88305 TC cut for 2013 – (announcement in final rule)
  • TC Grandfather termination confirmed

Under the health care reform law, CMS is now empowered to review and revalue high volume codes from all specialties as potentially overvalued services, explained Webinar speaker and EAC Chair Jonathan L. Myles, MD, FCAP. Since one code in particular—88305—is a high volume code, and its technical component has not been reviewed since initially valued in 2000, its TC is likely to be revalued by CMS. “We anticipate that the TC of 88305 will be cut for 2013, but we do not know the exact amount,” explained Dr. Myles. “It’s likely that the other codes in that family will be also be altered.”

In addition to the surgical pathology code family, CMS is also targeting the TC and the professional component (PC) of immunohistochemistry and enhanced cytology services for review as potentially overvalued. These codes will likely be reviewed next year. “CMS requested a review but we don’t expect any changes in valuation until 2014 at the earliest,” explained Dr. Myles. “Throughout this year and 2013, the CAP will continue advocating through the AMA/Specialty Society RVS Update Committee (RUC) process.”

Assessing Possible Impact

It’s difficult to assess the impact of changes in TC to the 88305 code family before the actual values are announced in the final Medicare PFS in November 2012. However, speaker and EAC member Mark S. Synovec, MD, FCAP, said there are a number of ways pathologists can position themselves for these changes. If pathologists do not bill the TC, then these changes will not affect them, although they will feel the impact of other payment changes outlined in the proposed PFS, he explained (see box for more details on these anticipated changes).

A replay of this Sept. 18 Webinar event, “Anticipating Reimbursement Adjustments: Hear CAP Experts Discuss Expected Payment Changes in 2013,” is available online.

“Assuming you are billing the TC and global billing, I suggest looking at all of your billing relationships and code breakdown,” said Dr. Synovec, who is President of Topeka Pathology Group, P.A., a seven-person independent multi-hospital-based pathology group in Topeka, Kansas. This includes looking at not just 88305 codes, but how often the other services in this code family are billed, as the entire set is being revalued. “If you come up with a percentage that you bill for each of these codes, it will be helpful once the final fee schedule is released,” he added.

In addition to analyzing your code mix, Dr. Synovec recommended looking at your billing relationships with private payers. “Many insurance companies work off a fee schedule that is structured as a percentage of Medicare,” he explained. “Therefore, TC reimbursement for these services from these payers will likely be affected.”

Senate Pushes PT Referral Bill to Lame Duck Session in Mid-November

While House members passed CMS and CAP-supported legislation involving CMS’s discretionary authority related to proficiency testing (PT) referral sanctions on Sept. 19, Senate members did not have the opportunity to vote on the companion bill (S.339) before Congress recessed for the November elections. However, as the Senate HELP (Health, Education, Labor, and Pensions) Committee favorably reported the bill last week, it is expected to pass when Congress reconvenes for the lame duck session beginning on Nov. 13.

If these bills are enacted, CMS will have greater discretion in determining sanctions against laboratories violating CLIA rules on referral of PT samples to other labs for analysis, meaning that the agency will have greater latitude in determining sanctions against labs that inadvertently violate CLIA’s PT referral rules. This has long been a concern of the College, as the severity of these mandatory sanctions imposed for inadvertent violations can include revocation of a lab’s CLIA certificate as well as a two-year ban on operating or owning a laboratory for laboratory directors and owners.

The Senate bill, “Taking Essential Steps for Testing Act (TEST Act),” is sponsored by Sens. John Boozman (R-AR), Amy Klobuchar (D-MN), and Jeanne Shaheen (D-NH). Sen. Boozman told Statline in a statement that since there has been a great deal of change since CLIA was crafted 25 years ago, Congress needs to revisit the issue. “The Proficiency Testing (PT) rules from the Reagan era have not kept up with changes in modern medicine and testing practices,” he explained. “We need regulations that ensure patient safety, effectively monitor labs, protect hospitals, and adapt to our modern world. The TEST Act provides some commonsense reforms, but we still have work to do.”

Watch Statline for continuing coverage of PT referral legislation.

CMS Awards Jurisdiction E A/B Contract to Noridian

CMS announced on Sept. 20 that Noridian Administrative Services won the Jurisdiction E Part A and B Services contract away from the current contract provider, Palmetto GBA.

The Jurisdiction E A/B MAC administers Medicare Part A and Part B claims for covered services in California, Hawaii, and Nevada, as well as the U.S. territories of American Samoa, Guam, and the Northern Mariana Islands. Palmetto will continue to administer provider claims for up to six months as CMS oversees the transfer of these Medicare contract responsibilities to Noridian. Formerly Jurisdiction 1, Jurisdiction E is not among those currently undergoing consolidation.

CMS has posted more information online on the Jurisdiction E Award Fact Sheet.

ACLU Asks Supreme Court to Rule on Gene Patent Case

The American Civil Liberties Union (ACLU) is asking the U.S. Supreme Court to invalidate Myriad Genetics’ gene patents, after the Federal Appeals Court ruled for a second time on Aug. 15 that companies can patent genes, although not methods to compare those gene sequences.

“In our view, the court of appeals did not fully consider or correctly apply the Supreme Court’s most recent and relevant patent law decisions,” said Chris Hansen, staff attorney with the ACLU, in a Sept. 25 statement. “DNA occurs naturally in the human body and cannot be patented by a single company that can then use its patents to limit scientific research and the free exchange of ideas.”

The ACLU represented plaintiffs (including the CAP) in a suit challenging gene patents on human DNA, specifically Myriad Genetics’ patent claims on BRCA 1 and BRCA 2 genes, which are associated with hereditary breast and ovarian cancer.

This summer was the second time the Federal Appeals Court considered the Myriad gene patent case. The Supreme Court vacated this court’s July 2011 decision following the high court’s unanimous ruling in favor of Mayo Collaborative Services in its medical patent suit against Prometheus Laboratories. The Supreme Court then remanded it back to the Federal Appeals Court in light of the Mayo decision. CAP and other medical societies and organizations provided amicus briefs in support of Mayo at various points in the litigation.

CAP, NAME Endorse Heightened Visibility, Financial Incentives for Forensic Pathology

Forensic pathology’s visibility in medical school needs to be raised and salaries need to be competitive with other pathology subspecialties, asserted the CAP and the National Association of Medical Examiners (NAME) in a Sept. 20 comment letter to the National Research Council’s (NRC) Scientific Working Group on Medicolegal Death Investigation (SWGMDI).

The comments are in response to SWGMDI’s recommendations on increasing the number of forensic pathologists through bolstering training programs in the U.S. In addition to endorsing recommendations on increasing exposure to this subspecialty as well as the number of training programs across the country, the letter concurred with recommendations for more competitive salaries. “Forensic pathology is unique among subspecialties in that rigorous additional training results in a decrease in income,” stated the comments. “The subspecialty will never be competitive as long as this is the case.”

While NAME and CAP did support the group’s recommendation to better integrate forensic pathology into medical school curricula, the groups do not believe that training should be streamlined so that a significant amount of general pathology training is lost. “Fast tracking residents by providing inadequate training in surgical pathology, general pathology, and clinical pathology will both further marginalize the subspecialty and produce forensic pathologists who do not have the basic competencies that most of us use every day,” explain the comments. “Forensic pathology should be regarded as a true subspecialty that contains competent, well-trained pathologists.”

Pressure Mounts on NY Gov. Cuomo to Veto Self-Referral Bill

New York Governor Andrew Cuomo (D) has until Oct. 3 to act on legislation that significantly weakens the state’s self-referral law.

Since lawmakers passed the legislation in June, pathologists, the CAP and the New York State Society of Pathologists have joined with physician groups, clinical laboratory personnel, and allied health professionals from several medical specialties to urge Gov. Cuomo to veto the bill that would repeal provisions of New York’s anti-self-referral law. In absence of these state restrictions, federal (Stark) law over self-referral of physician services would apply. If enacted, New York would become the first state to dismantle state-based protections and limitations on physician self-referral.

Watch Statline for updates on this issue. Pathologists in New York are encouraged to write the Governor’s office today in opposition to AB 3551/SB 4660, and request that he veto this legislation. Download a draft letter here.

CMS to Delay POS Transmittal October Start Date

CMS is expected to delay the October implementation of the CMS Place of Service (POS) Transmittal 2407, the CAP has learned. The College is working to get a confirmation on this delay.

The intent of the Transmittal was to clarify the POS designation for physician practices and the correct facility and non-facility payment rates for services paid under the Medicare Physician Fee Schedule. However, the Transmittal, which relies on face-to-face service to the beneficiary as the POS, caused confusion and could lead to payment denials for anatomic pathology services, which are often performed at a site other than the patient’s location.

Over the summer, members of the CAP Economic Affairs Committee and Advocacy staff met with CMS representatives to emphasize the concerns with the POS Transmittal 2407. In March, the College requested in a letter to CMS Acting Administrator Marilyn Tavenner that the agency take additional time to evaluate the adverse effects the policy would have on anatomic pathology services. Similar concerns had been brought to the attention of lawmakers on Capitol Hill, prompting letters from Iowa and Alabama Congressman to Ms. Tavenner.

CAP President-Elect Co-Hosts Fundraiser for Rep. Terry (R-NE)

CAP President-elect Gene N. Herbek, MD, FCAP, discussed the pathologist’s role in improving health care quality and efficiency, among other health care issues, with Nebraska Rep. Lee Terry (R) when he and Mrs. Herbek co-hosted a fundraiser for the congressman on Sept. 17.

Rep. Terry is particularly concerned about the costs associated with the health care reform law, and how these reforms will be funded, Dr. Herbek told Statline. In this and previous meetings with Rep. Terry—both in his home district and on Capitol Hill—Dr. Herbek discussed how physician self-referral of anatomic pathology services can lead to increased utilization and higher Medicare spending without any convenience or benefit to patients.

Continued dialogue in both Washington, D.C. and the home districts is an important aspect of establishing a strong relationship with lawmakers, explained Dr. Herbek. “This is especially true with House of Representative members who run every two years,” he added. “In order to effectively advocate for our patients and profession, it’s important to meet with the lawmakers as often as possible, not just when we are gathering support for a specific bill or issue. Building a relationship by meeting with our congressional representatives regularly and being a resource for them helps us stand out, and validates our interests.”

Keep Up with the Latest CAP Advocacy News on Twitter

CAP Advocacy is now on Twitter. Follow CAP Advocacy’s daily “tweets” to keep pace with regulatory and legislative news affecting pathology. For the latest health care news, be sure to check out what we are following on Twitter.


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