College of American Pathologists
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  STATLINE — CAP’s Bi–Weekly Federal and
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October 15, 2009  •  Volume 25, Number 21
Next Issue: October 29, 2009
© 2009 College of American Pathologists

In This Issue:

Breaking News: New Bill to Eliminate SGR Could Move Ahead of Larger Senate Health Reform Debate
Healthcare Overhaul Bill Clears Senate Finance Committee
SACGHS Recommends Exemption from Gene Patent Infringement in Clinical Care
Daschle to CAP ’09: Pathologists Must Get Involved in Healthcare Reform
Interim Final Rule of Title I of Genetic Information Nondiscrimination Act Rolled Out on October 1st
Governor Signs Bill Recognizing Laboratory Accreditation

Breaking News: New Bill to Eliminate SGR Could Move Ahead of Larger Senate Health Reform Debate

Significant developments have unfolded surrounding the Sustainable Growth Rate (SGR) formula.

The AMA has been successful in convincing the Senate Leadership to bring a separate SGR bill to the senate floor that would repeal the SGR formula and eliminate all the debt that has accumulated under the current payment system.

“This is a critical vote. Senators need to hear from pathologists now to ensure this bill gets every vote it needs. Call your Senators now,” urged Stephen N. Bauer, MD, FCAP, President of the College of American Pathologists.

The SGR formula for physician payment has been problematic for years and Congress has had to address it each year by passing a short-term fix. The healthcare reform bills passed in the House replaced the SGR formula. The Senate Finance Committee’s bill included a one-year fix, but did not address the underlying problem with the formula itself.

As the insurance industry has stepped up its opposition to healthcare reform, the AMA and other physician groups were able to reach an agreement with legislators, supported by the Senate leadership and the White House, to repeal the SGR and maintain physician support for healthcare reform. This is recognition of the importance of the medical community, and physicians in particular, in getting reforms passed.

The bill, S. 1776, the Medicare Physicians Fairness Act of 2009, is on a fast track and could go through a series of procedural votes next week, starting as early as Monday, October 19.

According to the AMA, passage of the bill would ease budget constraints and allow a new physician payment update system to be incorporated into the broader health system reform bill. While details of a new update system have not been worked out, administration and congressional leaders have committed to working with physician groups to provide positive updates this year and in the future.

In order to proceed, the bill will need the support of 60 Senators on several procedural motions over the next few days.

This could be the most important vote in the Senate of your career. Act now. Tell your Senators to support S. 1776.

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Healthcare Overhaul Bill Clears Senate Finance Committee

Earlier this week, the Senate Finance Committee passed its version of a healthcare reform bill, America’s Healthy Future Act of 2009, making it the final Congressional committee to pass a healthcare reform bill, and opening the door for lawmakers to progress to the next step in crafting healthcare reform legislation.

Senate Majority Leader, Harry Reid (D-NV), scheduled Senate debate to begin on October 26. Before floor debate can begin, the recently passed Finance Committee bill and the bill passed by the Health, Education, Labor, and Pensions (HELP) Committee last summer would need to be melded into a single bill.

Right now in Washington, most believe the Finance Committee bill, which is projected to reduce Medicare costs while adding nearly $860 billion to overall healthcare costs over 10 years, is the most likely model for what the final bill will contain. It is being heralded as a middle-of-the-road plan because it lacks a provision for a public insurance plan. However, it contains a number of provisions of concern to pathologists.

Provisions with the most direct and immediate impact include:

  • A one-year “patch” to the SGR, replacing an anticipated 21% cut with only a .5% increase for 2010, and making no provision for impending reductions in future years. Replacing the SGR formula continues to be a central issue, and physician groups are continuing to work with Congress to address a permanent fix. Watch for new alerts from CAP on this issue.)
  • A 10% primary care bonus for certain evaluation and management (E/M) services for 5 years, with half the cost of the bonuses offset by across the board reductions in all other codes. The last time E/M bonuses were offset by budget neutrality adjustments, hospital-based pathologists saw an 8% cut in payments.
  • PQRI provisions for a 1% bonus in 2011 for physicians participating in 2010; and a 1.5% penalty starting in 2013 for physicians who fail to participate.
  • A 1.75% reduction in the Clinical Lab Fee Schedule (CLFS) from 2011-2015; possibly increasing to 1.95% in 2015.
  • A provision allowing a select group of commercial laboratories that provide molecular tests to bill Medicare directly (rather than be paid through the hospital DRG) on tests conducted 14 days or less after a patient is released from the hospital. Most hospital and academic medical labs would not qualify under this provision. For information on how to get involved with contacting your elected officials on this issue, contact Chris Sherin on the CAP staff: 202-354-7129, or via e-mail.

Statline will continue to follow these and other issues throughout the legislative process.

See a related article on former Senate Majority Leader, Tom Daschle’s comments at CAP ’09, below.

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SACGHS Recommends Exemption from Gene Patent Infringement in Clinical Care

The Secretary’s Advisory Committee on Genetics, Health and Society (SACGHS) last week agreed on a recommendation which, if adopted, will clear the way for medical researchers to study more genes, and more pathologists to provide genetic tests based on already-patented human genes without the threat of a patent infringement lawsuit.

The panel issued six related recommendations to the Secretary of Health and Human Services (HHS). If adopted, they would:

  • create exemptions from infringement liability for a number of possible uses;
  • promote adherence to norms designed to ensure access;
  • enhance transparency in licensing;
  • establish an advisory body on the health impact of gene patenting and licensing practices;
  • provide needed expertise to US Patent and Trademark Office;
  • ensure patients equal access to clinically useful genetic tests.

The CAP has long opposed the issuance of human health-related gene patents because genes are naturally occurring substances and patenting them limits access to medical care, jeopardizes the ability to practice medicine in the best interest of patients and raises the cost of care.

In May 2009, the CAP joined as a plaintiff in a lawsuit challenging the patents held by Myriad Genetics for the genes known as BRCA1 and BRCA2, which are indicators for hereditary predisposition to breast and ovarian cancer.

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Daschle to CAP ’09: Pathologists Must Get Involved in Healthcare Reform

Former Senate Majority Leader Tom Daschle urged CAP members to get constructively involved in health care reform by educating legislators and their staffs about the issues important to pathologists in healthcare reform.

Speaking at CAP ’09 over the weekend, Daschle said even the best lobbyists could not have as much influence as pathologists meeting with their own legislators and their health staff to discuss healthcare issues.

“You have a unique role in healthcare delivery,” he said, “You need to educate your legislators and make sure they understand your issues and what you want.”

Before issuing this call to action, Daschle identified the three major problem areas in healthcare upon which most policymakers and legislators, Democrats and Republicans alike, agree: access to insurance; delivery and derivative costs; and quality.

“40-50 million Americans do not have healthcare insurance,” he said. “Ten thousand lose their insurance coverage each day, and about half of the Americans who have insurance don’t get the healthcare they need because they are under insured. Eighteen thousand Americans die every year due to lack of insurance.”

With regard to costs problems, Daschle said the total healthcare cost in the US is about $8000 per person. Costs have risen dramatically, going from 4% of the gross national product (GDP) a generation ago to 32% of the GDP today. A family of four spends an average of $24,000 each year on healthcare and insurance. Employers’ like Starbucks spends more on healthcare than it does on coffee. Ford Motors spends more on its employees’ healthcare than on steel.

And yet, with all the money Americans spend on healthcare, the World Health Organization ranks the US 37th in its assessment of quality outcomes. According to Daschle the US must change its delivery model to increase emphasis on relatively inexpensive wellness and disease prevention programs.

Daschle said although most policymakers agree on the problems, significant differences in how to best deal with them. He predicted the next few weeks will be critical in deciding if health reform can be achieved and what it will include.

Pathologists can get more involved with CAP’s federal advocacy efforts by logging onto or go to and click on the Advocacy tab. Then click on the Pathology Advocacy Network and go to “Access Network Resources”. You must be logged into CAP’s website to access these resources.)

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Interim Final Rule of Title I of Genetic Information Nondiscrimination Act Rolled Out on October 1st

On October 1, 2009, the Departments of Health and Human Services (HHS), Labor, and the Treasury initiated the interim final rule of Title I of the Genetic Information Nondiscrimination Act of 2008 (GINA). GINA was designed so that employers and insurers cannot request or require employees or insurance participants to disclose genetic information or use that information to affect enrollment and coverage decisions. The ruling also restricts basing decisions on pre-existing conditions.

GINA has several sections which go into effect at different times. Title I, related to health coverage, was scheduled to take effect between May 22, 2009 and May 21, 2010. Title II, which relates to employment, will take effect November 21, 2009.

The interim final rule, effective October 1, 2009, was published in the Federal Register, which begins the period for comments and a notice of the interim final rule. The interim final rule has four major components:

  1. Prohibits group health plans and health insurance issuers from increasing premiums for the group on the basis of enrollee’s genetic information;
  2. Prohibits group health plans and health insurers from denying enrollment;
  3. Prohibits group health plans and health insurers from excluding enrollment on the basis of pre-existing conditions;
  4. Prohibits group health plans and health insurance issuers from other forms of underwriting based on genetic information.

The interim final rule becomes effective on December 7, 2009. Public comments will be accepted until January 5, 2010.

Health and Human Services’ Office for Civil Rights has also issued a proposed modification to the Health Insurance Portability and Accountability Act (HIPAA). This, too, would prevent insurers from disclosing or using genetic test information for underwriting purposes. Public comments will be accepted through December 7, 2009. Wording of the rules can be found at

Violations of the regulations could result in fines ranging from $100 to $50,000 for each violation. The HIPAA modification prohibits “the use and disclosure of genetic information by covered health plans for eligibility determinations, premium computations, applications of any pre-existing condition exclusions, and any other activities related to the creation, renewal or replacement of a contract of health insurance or health benefits.”

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Governor Signs Bill Recognizing Laboratory Accreditation

California Governor Arnold Schwarzenegger, signed into law a bill on October 11th establishing a formal process for state recognition of laboratory accreditation.

The new law was supported by the state’s laboratory oversight department, after a 2008 state audit recommended formal recognition of laboratory accreditation as a cost savings measure to obviate routine state inspections of accredited labs.

The law 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.

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