Top House Lawmaker Confident Congress Will Improve
Saying further Medicare payment cuts would be "catastrophic"
to physicians' morale and willingness to participate, a prominent House
lawmaker told CAP members she expects Congress to pass a Medicare reform
bill that improves payment rates.
Rep. Nancy Johnson, R-Conn., made her comments during a lunch speech at
the CAP Advocacy School, in Washington, D.C., this week. The two-and-a-half
day school trains College members to serve as grassroots advocates in
the federal legislative arena.
"I would say there's an 85 percent chance the president will have
a bill on his desk" by year's end, said Johnson, who chairs the Health
Subcommittee of the House Committee on Ways and Means. Ways and Means
and the Energy and Commerce Committee hold jurisdiction over Medicare
in the House.
Johnson said Congress must act to avert a predicted 4.2 percent cut in
Medicare physician payment rates in 2004. "It would be catastrophic
to morale and catastrophic to willingness to participate" in Medicare,
she said of the predicted payment rate cut. A House Medicare prescription
drug and modernization bill would boost physician payments by at least
1.5 percent in 2004 and 2005. A Senate bill, now in conference with the
House version, includes no payment increase.
Johnson predicted the House payment language would prevail in a final
reform bill. "I do know that while the Senate did not fund physician
payments, it will be done," she said. Beyond short-term payment increases,
Johnson said, Congress must fix the fundamentally flawed formula behind
annual payment updates. "The current system of how we pay for physicians
is totally inadequate for the future," she said.
Johnson also made clear her strong opposition to a Senate reform proposal
to impose a 20 percent co-payment requirement on Medicare beneficiaries
for laboratory tests. She, like the College, warned that imposing the
co-payment requirement on seniors would harm access to necessary testing.
She noted that while a co-payment for an inexpensive test might be small,
$1.50, for example, "that $1.50 to an older person who's from a time
when a nickel meant a lot might be enough to discourage them from getting
a needed test."
The College has worked closely with Johnson in recent years on various
issues. She encouraged Advocacy School participants to make their concerns
known to lawmakers and draw on resources, such as those provided by the
school, to become effective advocates.
The Advocacy School, which opened Monday and culminated today with Capitol
Hill meetings between participants and their lawmakers, drew 23 College
members, including four from previous schools who served as mentors. Also
speaking at the school was Andrew Shore, policy director for Rep. Deborah
Pryce, R-Ohio, who chairs the House Republican Conference. Shore, who
has extensive congressional experience, provided school participants with
numerous tips for establishing relationships with members of Congress.
He also noted the importance of today's Hill visits in shaping final Medicare
"To the extent that you have parochial issues in the Medicare bill,
now is the time to get it done," he said. "If you've got issues—and
I'm sure you do—tomorrow is the day to get out and get it done,"
he said in a Tuesday breakfast presentation.
OIG Attempts to Define Excessive Charges
The Department of Health and Human Services has proposed a regulation
that would define, with respect to charges for Medicare laboratory
tests and other non-physician services, the phrases "substantially
in excess" and "usual charges."
In a Sept.
15 proposed rule, the HHS Office of Inspector General (OIG) noted
its concern that current practices can create a "two-tier pricing
structure," with Medicare paying more than other customers. "Unless
the price differential can be justified by costs that are uniquely
associated with the Medicare program, the provider is simply overcharging
Medicare," the OIG said in the rule.
The proposal defines a usual charge and would consider charges 120
percent above that, or more, to be "substantially in excess."
Exclusion from the Medicare program, while not mandatory for excessive
chargers, would be within the OIG's discretion, under the proposal.
Usual charges are proposed to include amounts billed to cash patients
or those covered by indemnity insurers with which the provider has
no contractual arrangement, and any fee-for-service rates a provider
contractually agrees to accept from any payer, including any discounted
fee-for-service rates negotiated with managed care plans. Not included
in the calculation of usual charges: free or reduced priced care to
the uninsured, capitated payments, hybrid fee-for-service arrangements
where more than 10 percent compensation is paid by bonus, and fees
set by Medicare, state programs and other federal health programs.
To determine the usual charge, the OIG proposes to use a provider's
average charge. The OIG, however, holds open for consideration using
the 50th percentile, or median method.
While the proposal generally would apply to non-physician services,
the OIG does solicit comment on whether any of the services on the
Medicare Physician Fee Schedule should be subject to this proposed
The College is reviewing the proposed rule closely and will submit
comments on it to the OIG.
HIPAA Compliance Contingency Plan
The Centers for Medicare and Medicaid Services last week,
responding to concerns by the College and others, said it would carry
out a contingency plan to allow non-compliant Medicare claims after
the Oct. 16 start of a regulation requiring electronic submissions.
The contingency plan will allow providers to submit Medicare claims
in current "legacy" electronic formats, giving them additional
time to make their billing systems compliant with new transaction and
code set standards mandated by the Health Insurance Portability and
Accountability Act (HIPAA).
CMS, in a news
release, said it will regularly reassess the readiness of its "trading
partners" to determine how long the contingency plan will remain
in place. CMS made the decision after reviewing statistics showing unacceptably
low numbers of compliant claims being submitted, the agency said.
24 guidance document provided the authority to implement a contingency
plan, CMS said. That document stated that covered entities that make
a good faith effort to comply with the HIPAA standards may implement
contingencies to maintain operations and cash flow.
"Implementing this contingency plan moves us toward the dual goals
of achieving HIPAA compliance while not disrupting providers' cash flow
and operations," CMS Administrator Tom Scully said.
Meanwhile, two national organizations representing private health plans
responded favorably to a call by the College and more than 50 other
medical organizations to follow the government's lead by adopting contingency
plans. The American Association of Health Plans and BlueCross BlueShield
Association both say their members will, like CMS, allow use of legacy
formats for claims submissions while providers work to comply with the
College to Meet with CMS Chief on NCCI Issue
The College will meet tomorrow with Centers for Medicare and Medicaid
Services Administrator Tom Scully to discuss concerns about the National
Correct Coding Initiative (NCCI) and other issues important to pathology.
College representatives, led by Mark S. Synovec, MD, FCAP, chair of
the CAP Economic Affairs Committee, will discuss with Scully several
NCCI edits that, the CAP believe, unfairly deny payment for necessary
The College, in numerous written comments and in a Sept. 8 meeting
with other CMS officials, has raised concerns about the NCCI process,
including the weight it gives to comments by knowledgeable specialties;
access to utilization data used in the decision-making process; the
openness of the process; and lack of opportunities to appeal final
edit decisions. A special Sept.
15 edition of STATLINE provides extensive detail on the NCCI issue.
The CAP also will discuss with Scully coding and payment issues raised
by the proposed 2004 Medicare physician fee schedule, in particular
those regarding flow cytometry. Other expected topics of discussion
include nominations to the Practicing Physicians Advisory Council
and a recent federal proposed rule that would define "usual charges"
and "substantially in excess" with regard to Medicare test
payments (see story above).
CAP Calls for Limits on Use of ICD-10-PCS
The College and more than 50 other medical organizations have told a
federal advisory panel that uses for ICD-10-PCS should be limited to those
now defined for the ICD-9-CM diagnostic coding system.
In a Sept. 23 letter to members of the National Committee on Vital and
Health Statistics (NCVHS), the CAP and other groups also noted their strong
support for continued use of Current Procedural Terminology (CPT) for
coding physician services. The letter was presented to the NCVHS last
week, at the panel's meeting in Washington, D.C.
The NCVHS is considering a recommendation to the Secretary of the Department
of Health and Human Services on whether to proceed with the adoption of
ICD-10-PCS as a replacement for ICD-9-CM Volume 3.
"ICD-10-PCS was designed to be used as a coding system to describe
services provided by hospitals," the College and other organizations
wrote. "ICD-10-PCS was never designed nor intended to describe professional
services. Evidence of this is that there are no provisions for coding
for evaluation and management services (the most frequently billed physician
service). Additionally, there are no codes for anesthesia, psychiatry,
home health services, pulmonary services, allergy or immunology services,
The groups said they "strongly support" continued use of CPT
and pointed out that it relies on just more than 8,000 codes compared
with 170,000 under ICD-10-PCS. "Our organizations play a critical
role in updating and maintaining the physician coding system," the
groups said. "The current physician coding system is used as the
basis for reimbursement for our services by virtually all public and private
payers. The Resource Based Relative Value System and CPT code set are
inextricably linked and have taken thousands upon thousands of physician
hours to develop and refine. For all of these reasons, we strongly support
the continued use of CPT."
The groups ended their comments by urging the committee "to confine
your recommendation to the uses of ICD-10-PCS as a coding system for inpatient
The NCVHS Subcommittee on Standards and Security is expected to consider
the ICD-10 issue at its Oct. 28 to 30 meeting and make a formal recommendation
to the full committee shortly afterward. The full committee is expected
to make its final decision during a Nov. 5 to 6 meeting in Washington.
The College, in separate recent communications to federal officials, has
argued against use of ICD-10-PCS for outpatient coding. The College has
said ICD-10-PCS is flawed as a procedure coding system, particularly in
its organization with respect to pathology and laboratory sections.
College Unveils New State Society Web Area
The College has unveiled a new area of its Web site that provides comprehensive
and regularly updated meeting and leadership information on state pathology
The new state society area, under the "Community" section of
the CAP site, expands existing information and organizes it in more useful
ways. For example, the new area allows aggregate listings of all state
society meetings and society officers.
In a major information technology improvement, the display of state pathology
association officer and contact information is extracted from the College's
membership database, thus ensuring timely and synchronous Web site publication
of revised information.
Other major improvements allow chronological searches of meeting schedules
and updated links to medical boards for each state. To reach the new area,
choose "State Pathology Associations" from the "Practicing
Pathology" drop-down menu on the CAP site's opening page.
Editor: Carl Graziano
202-354-7118 • 202-354-7155 (fax) •