College of American Pathologists
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October 24, 2013  •  Volume 29, Number 22
Next Issue: November 7, 2013
© 2013 College of American Pathologists

In This Issue:

Delay of CMS Release of Physician Fee Schedule Rule Could Be as Late as Nov. 27

The Centers for Medicare and Medicaid Services (CMS) announced this week that it plans to issue the final version of its proposed 2014 Physician Fee Schedule rule, CMS–600–P, by Nov. 27. The rule was originally scheduled to be released by Nov. 1, but could be delayed due to effects of the partial government shutdown in October.

The rule could drastically cut Medicare payments for pathology services by linking payment for pathology services on the Physician Fee Schedule to lower rates under Medicare’s Hospital Outpatient Prospective Payment System, the fee schedule used for hospital outpatient services. The CAP opposes the proposed version of the rule, and continues advocacy efforts on Capitol Hill to increase awareness of Congress’ oversight role and the threat the rule would pose to patient access.

CMS may also delay the release of its final Hospital Outpatient Prospective Payment Proposed Rule (CMS-1601-P) until Nov. 27. The CAP has called for the withdrawal of the rule, which attempts to bundle pathology physician services and nearly all clinical laboratory tests into Medicare’s payments to hospital outpatient departments.

The final rules are still expected to take effect on Jan. 1, 2014.

Bipartisan Group of Senators Urges Medicare Officials to Drop Proposed Payment Cuts for Anatomic Pathology Services

Last week, in the midst of a two-week government shutdown, the CAP was busy pushing its advocacy agenda with Members of Congress and senior CMS officials.

On Oct. 17, U.S. Senators Amy Klobuchar (D-MN) and Johnny Isakson (R-GA), as well as 38 of their colleagues, submitted a letter to CMS urging CMS Administrator Marilyn Tavenner to reconsider cuts to Medicare payments for anatomic pathology services. CAP members responded strongly to an action alert requesting they reach out to their U.S. Senators and ask them to sign the letter. The letter notes that the cuts, which could exceed 75 percent for some of the most common services, could have a severe impact on the ability of laboratories to continue providing services to Medicare beneficiaries. The letter also argues that the proposed change is based on inadequate data.

CMS plans to finalize its proposed rule—which would take effect Jan. 1, 2014—by Nov. 27, 2013.

New England Journal of Medicine Study Confirms High Costs of Self-Referral

A new study in the New England Journal of Medicine (NEJM) found that self-referring urologists generated dramatically more expensive, but not necessarily more effective, radiation treatments due to their ownership interest than their non-self-referring counterparts.

The study, “Urologists Use of Intensity Modulated Radiation Therapy (IMRT) for Prostate Cancer,” authored by noted Georgetown University health care economist Jean M. Mitchell, PhD, analyzed Medicare claims from 2005 through 2010 and constructed two samples—one comprised of 35 self-referring urology groups in private practice and a matched control group comprised of 35 non-self-referring urology groups in private practice, and the other comprising non-self-referring urologists employed at 11 National Comprehensive Cancer Network (NCCN) centers matched with 11 self-referring urology groups in private practice. The study compared the use of IMRT in the periods before and during ownership to evaluate changes in IMRT use according to self-referral status. Among the survey findings:

  • Increased Likelihood of Undergoing IMRT. The report concludes that “men treated by self-referring urologists, as compared with men treated by non–self-referring urologists, are much more likely to undergo IMRT, a treatment with a high reimbursement rate, rather than less expensive options, despite evidence that all treatments yield similar outcomes.”
  • IMRT Utilization Among Self-Referring Urologists Increased Dramatically while Non-Self-Referring Groups Remained Nearly the Same. IMRT utilization among self-referring groups increased from 13.1 percent to 32.3 percent, a 146 percent increase, once they became self-referrers. In contrast, IMRT utilization by non-self-referring urologists, who were peers practicing in the same community-based setting, was virtually unchanged with a modest increase of 1.3 percentage points. Additionally, IMRT utilization among a subset of 11 self-referring urology practices near NCCN centers increased from 9 percent to 42 percent, an increase of 33 percentage points, from the pre-ownership to the ownership period, compared to an insignificant increase of 0.4 percentage points at the NCCN centers.
  • Self-Referring Urologists Decreasingly Used Effective, Less Expensive Treatments. Data showed a decrease in utilization of other effective, less expensive treatment options by self-referring urologists, while the study found “virtually no change in practice patterns” for non-self-referring urologists.

The study comes on the heels of the Government Accountability Office (GAO) report, “Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny,” released August 1, 2013, which found that financial incentives were likely a major factor influencing self-referring physician behavior. In addition, Medicare expenditures for intensity modulated radiation therapy (IMRT) services performed by self-referring groups increased rapidly from 2006 through 2010 by approximately $138 million, as compared to a $91 million decrease in the non-self-referral group. During the same time period, IMRT utilization among self-referring groups increased by 456 percent, while the number of IMRT services performed by non-self-referrers decreased by 5 percent. GAO could not attribute any of these findings to patient preferences, age, geographic location, or patient's health status. Other GAO reports on advanced diagnostic imaging and anatomic pathology (AP) have had similar findings on self-referral.

An additional GAO report focused on anatomic pathology, “Action Needed to Address Higher Use of Anatomic Pathology Services by Providers Who Self-Refer,” came to similar conclusions on self-referral. That study found that providers who self-referred made an estimated 918,000 more referrals for anatomic pathology services than they likely would have without self-referring. CMS estimated these additional referrals cost Medicare about $69 million in 2010.

In addition, CAP-sponsored research by Dr. Mitchell, published in Health Affairs in 2012, showed that self-referring urologists billed Medicare for 72 percent more prostate biopsy specimens than physicians who did not self-refer. The self-referring physicians showed no increase in cancer detection—rather, self-referring urologists detected cancer at a 40 percent lower rate than urologists who did not self-refer.

The CAP joins with the Alliance for Integrity in Medicare (AIM) coalition in strong support of the “Promoting Integrity in Medicare Act of 2013,” introduced by U.S. Rep. Jackie Speier (D-CA) in August 2013. The legislation would amend the In-Office Ancillary Services (IOAS) exception to the Stark Law by barring self-referral for AP, physical therapy, advanced diagnostic imaging and radiation oncology. The legislation would return the exception to its original intent, which is to allow physicians to self-refer simple laboratory tests, and would not impact truly integrated, coordinated care models such as ACOs or rural health care providers.

Take Action

Email your member of Congress today and ask them to co-sponsor this important bill. Entering your zip code on the CAP Action Center will automatically match you with your legislator and generate the email for you.

The CAP also encourages you contact your Senator and make them aware of how important this issue is to you. Please complete the statement online.

For more information on the CAP’s position on physician self-referral, visit the CAP’s Self-Referral Resource Center.

The Thousand Dollar Pap Smear

In an Oct. 23 editorial written in the New England Journal of Medicine (NEJM), Dr. Cheryl Bettigole, a New Jersey-based family medicine practitioner, discusses increased laboratory fees facing her low-income, uninsured patients, including Pap smears costing as much as $1,000 or more.

According to Dr. Bettigole, these charges are not due to the cost of the actual Pap smear itself, but the often unnecessary tests that get added on, including tests for HPV, STDs and labs for a variety of yeasts. She admits these tests are often ordered by physicians, nurse practitioners or medical assistants, but she goes on to say laboratories are partially to blame as well.

Her rationale is that labs have made it too simple for unnecessary tests to be ordered. What used to require physicians to submit multiple collection vials and check multiple boxes on a requisition form, now requires only one vial to be submitted and one box to be checked for a number of bundled tests. She also mentions the “savvy” marketing tactics employed by laboratory salespeople that mirror those in the pharmaceutical industry.

In conclusion, Dr. Bettigole worries these excessive lab costs may lead some women to forego cervical cancer screening simply because they cannot afford it.

According to the CAP, the editorial sheds light on an important health care issue—appropriate test utilization. As the health care system moves toward more individualized, value-based care, it becomes increasingly important for patients to get the right test, at the right time, which can lead to the right treatment. Furthermore, CAP members are uniquely positioned to provide their clinical colleagues with test utilization strategies for performing appropriate laboratory and pathology testing with the goal of providing optimal patient care, while containing costs for patients and the health care system overall.

The CAP stands firmly in the belief that the only tests that should be ordered are the ones most appropriate for an individual patient—ensuring that the patient receives the most accurate diagnose and follow-up care.


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