College of American Pathologists
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  STATLINE — CAP’s Bi–Weekly Federal and
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October 25, 2012  •  Volume 28, Number 22
Next Issue: November 8, 2012
© 2012 College of American Pathologists

In This Issue:

Election Watch: Payment, Delivery Reforms Likely to Continue if Romney Wins White House

Health care payment and delivery reforms are likely to continue unabated if Republican presidential candidate Mitt Romney wins next month’s presidential election, a leading policy expert told Statline.

“Coordinated care models like accountable care organizations [ACOs] are picking up traction in both the private and public sectors, and it’s unlikely that President Romney would want to derail that if elected to office,” explained Larry Kocot, Deputy Director, of Brookings Institution’s Engelberg Center for Health Care Reform. “In addition, despite his campaign pledge to ‘repeal and replace’ the reform law, his coinsurance proposals—among others—indicate he wants to continue the shift away from fee-for-service [FFS] to innovative payment models.”

Five States to Vote on Reform Referendums on Nov. 6

Voters in Alabama, Florida, Missouri, and Montana will decide on ballot measures related to the health care reform law in the November election, according to the National Conference of State Legislatures.

While the measures vary, they primarily involve requiring businesses or individuals to purchase health insurance or participate in the law’s other programs, indicated NCSL.

Repeal and Replace?

In terms of his plan to repeal and replace the reform law, this is likely something that the Romney Administration would attempt through the reconciliation process during the first hundred days of his term, according to Kocot. But this will be tricky, given that there are likely certain aspects of the reform law that the new president would want to retain, such as the efforts to reform FFS. “It wouldn’t be a total repeal and replace, as there are a number of things in the reform law that are not necessarily anathema to Romney,” said Kocot. “However, even through the reconciliation process, certain elements of the law can’t just be wiped out and replaced, so it’s unclear exactly how this will transform from a campaign promise into reality.”

While the pressure continues to mount to reform FFS, the most imminent threat to physician payment remains the Medicare reimbursement under the sustainable growth rate (SGR)—set to be cut by 27% when the current “patch” expires on Jan. 1, 2013, absent Congress intervention (see related article below on AMA’s efforts to press lawmakers on SGR reforms). Congress also has to act to avert the sequestration cuts totaling $1.2 billion, slated to hit defense and health care spending on Jan. 1.

The Romney campaign has indicated they would like to extend the tax and spending cuts to provide time for a comprehensive longer term deal, while another Obama Administration may try to use the mandate of a second term to force an early deal with Republicans on taxes and spending, said Kocot.

“In any event, it’s going to be tough to find the $300 billion in revenue to cover the full cost of the SGR fix,” he added. “Even if Congress blocks the SGR cut—which it is likely to do—it’s going to cost money, so any Administration—Obama or Romney—is facing the daunting challenge of coming up with that funding. This has to be the central part of any Administration’s payment reform strategy.”

Analyzing the Impact of 2013 Medicare Final PFS Changes: Register Now for Special CAP Member Webinar Series

CMS’ 2013 final Physician Fee Schedule (PFS)—to be released by Nov. 1—is slated to contain significant changes for pathologists, including revaluation of the surgical pathology code family, placement of newly developed molecular codes, and expansion of the agency’s Physician Quality Reporting System (PQRS). CAP will send out a Statline Alert announcing release of the rule and the final Medicare changes for 2013.

To help members prepare for next year’s changes, CAP Advocacy is hosting a two-part Webinar series, “Confronting New Medicare Payment Realities,” on Nov. 14 and 15. Please note: separate registration is required for each Webinar.

Part 1: How 2013 Reimbursement Changes Will Impact Pathologists
Wednesday, Nov. 14, 1:00-2:30 PM Eastern Time

The first part of the series will feature CAP leaders discussing the pathology-related details of the final PFS, including how this will impact pathologists.


Moderator: Richard Friedberg, MD, PhD, FCAP, Chair, CAP Council on Government and Professional Affairs
Speakers: Jonathan L. Myles, MD, FCAP, Chair of CAP’s Economic Affairs Committee (EAC)
Mark S. Synovec, MD, FCAP, President, Topeka Pathology Group, P.A., Member, CAP’s EAC

Register here.

Part 2: What CAP Members Need to Know about 2013 PQRS Changes
Thursday, Nov. 15, 3:00-4:30PM Eastern Time

Among the many changes in next year’s PQRS is that pathologists who participate successfully in 2013 will be incentivized, while those participating unsuccessfully (or not participating) will be penalized in 2015.

This second Webinar will focus on how PQRS changes—including new group reporting options—and the implementation of the value-based modifier beginning next year will impact pathologists.


Moderator: Jonathan L. Myles, MD, FCAP, Chair of CAP’s EAC
Speaker: Emily Volk, MD, PhD, FCAP, Chair, EAC Measures and Performance Assessment Workgroup

Register here.

Protests Halt Jurisdiction E A/B Contract Transition from Palmetto to Noridian

CMS has issued a stop work order for the administration of Medicare Part A and Part B fee-for-service claims for CMS Jurisdiction E (JE) after two protests were filed in mid-October, according to an announcement on the agency’s website. The agency announced on Sept. 20 that Noridian Administrative Services (NAS) won the contract away from the current contract provider, Palmetto GBA.

With the stop work order, the Government Accountability Office (GAO) will review the procurement record. During the GAO review period, which is expected to be completed by the end of January 2013, Medicare providers in California, Hawaii, Nevada, and the Pacific territories will continue to file their Medicare claims with the incumbent A/B MAC—Palmetto.

“Because of the JE stop work order NAS may not do any work related to the JE award,” states the announcement. “Implementation activity may not take place until the stop work order is revoked.”

The JE A/B MAC serves beneficiaries in California, Nevada, Hawaii, and the American territories of American Samoa, Guam, and the Northern Mariana Islands, and is formerly known as “Jurisdiction 1”.

Sen. Cardin (D-MD), MSP President Discuss Pathologists’ Role in Reform

MSP President Paul Staats, MD, FCAP (left) met recently with Sen. Ben Cardin (D-MD).Maryland Society of Pathologists’ President Paul Staats, MD, FCAP, recently met with Sen. Ben Cardin (D-MD) to emphasize how pathologists are helping to drive health care reform.

“My meeting with Sen. Cardin was a good opportunity to highlight how pathologists are important to the mission of health care reform—to control costs through appropriate utilization of testing and improve quality for patients,” Dr. Staats told Statline. “Senator Cardin clearly recognizes the importance of controlling health care costs in a way that does not negatively impact patient care. I pointed out to him the unique role that pathologists can play in this regard.”

Sen. Cardin also noted the challenging environment on Capitol Hill, making it especially difficult to move reform initiatives through Congress. “Congress has a number of major issues to work on after the election, most of which are likely to be the subject of intense partisan debate, so it is going to be tough to advance new reforms through Congress, particularly during the upcoming lame duck session,” said Dr. Staats.

CAP Joins AMA in Outlining Core Elements of SGR Reform Strategy

Upon abolishing the current flawed sustainable growth rate (SGR) system, the Medicare physician payment program must transition to a model that provides updates reflecting the costs of providing services, as well as efforts and progress on improving quality and managing costs, the AMA outlined to Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) in an Oct. 15 letter signed by the CAP and other health care providers and stakeholders.

Without congressional action, physicians face a 27% cut in Medicare payments beginning Jan. 1, 2013. While Medicare physician payments under SGR have been nearly frozen for a decade, the cost of caring for patients has increased by more than 20%, according to the AMA. “New payment models are needed that can offer physicians opportunities and allow them to lead changes in care delivery while being rewarded for improving the quality of patient care and lowering the rate of growth in costs,” stated the letter. “Currently, physicians who want to improve care can face major hurdles, as those who lower total health care costs through delivery improvements are not rewarded and may actually lose revenue.”

Planning Post-SGR

While physician-led, patient-centered models are being developed, there must be a transition period between elimination of the SGR formula and implementation of a new nationwide system. The transition plan must include certain core elements that make allowances for the differences among specialty providers by not instituting harsh penalties during this flux time.

Specifically, these core elements need to reflect the diversity of physician practices and provide opportunities for physicians to choose payment models that work for their patients, practice, specialty and region; and encourage incremental changes with positive incentives and rewards during a defined timetable, instead of using penalties to order abrupt changes in care delivery. In addition, the transition and reforms must tie incentives to physicians’ own actions, not the actions of others or factors beyond their influence.

“Physician practices of every size and specialty must be supported and encouraged to develop the needed infrastructure and begin adopting the most appropriate [payment] model for their patients and their practice,” stated the letter.

House, Senate Leaders Sound Off on Meaningful Use Concerns

Interoperability and the cost of federal subsidies for EHR systems are some of leading lawmakers’ top concerns related to the Stage 2 Meaningful Use program rules, according to letters sent from Congress to HHS Secretary Sebelius earlier this month.

“The Stage 2 rules fail to achieve comprehensive interoperability in a timely manner, leaving our health care system trapped in information silos, much like it was before the incentive payments,” wrote House Ways and Means Chairman Dave Camp (R-MI) and House Energy and Commerce Chair Fred Upton (R-MI) in an Oct. 4 letter. “More than four and a half years and two final Meaningful Use rules later, it is safe to say that we are no closer to interoperability in spite of the nearly $10 billion spent.”

The Senate letter—signed by leaders from the Senate Finance and Health, Labor, and Pensions Committees on Oct. 17—also expressed concerns about interoperability. Another issue is whether some providers received federal subsidies for EHR systems already in place prior to the Meaningful Use program, and whether there is any effort to recoup inappropriate payments. These Senators also questioned whether the digitalization of records and broader adoption of EHRs is increasing providers’ billing of Medicare and therefore driving up the cost of the Meaningful Use program.

OIG to Examine Incentives

Costs associated with the federal Meaningful Use program will soon be a focus of the HHS Office of Inspector General (OIG). In its recently released 2013 Work Plan, the department revealed that it will review Medicare incentive payment data from 2011 to identify erroneous incentive payments to providers that did not meet selected meaningful use criteria.

“We will also assess CMS’s plans to oversee incentive payments for the duration of the program and actions taken to remedy erroneous incentive payments,” stated the Work Plan.

IOM Outlines Challenges Facing JPC’s Biorepository

The Joint Pathology Center (JPC) faces significant challenges in transforming into a modern biorepository, primarily in terms of the utility of its over 7 million accessions as well as establishing appropriate retention and maintenance protocols for its biospecimen materials, according to a recent report by the Institute of Medicine.

Opened in April 2011, the JPC was established after the Department of Defense’s (DoD) Armed Forces Institute of Pathology (AFIP) closed in September of that year as a result of the 2005 Defense Base Realignment and Closure Law (BRAC). CAP advocated for the establishment of the JPC, arguing that it preserves the key functions of the AFIP, including the National Pathology Tissue Repository and secondary consultation services.

The report, Future Uses of the Department of Defense Joint Pathology Center, explains that a primary issue facing the JPC biorepository is the collection’s utility, given the uncertainty about how the specimens were collected. “Experience with other biorepositories that, like the JPC, are composed of samples collected in the absence of a purposefully designed protocol indicates that their value may be severely limited by the state of specimens and their associated documentation,” states the report. “Variations in the preanalytic handling of specimens, in specimen preparation and fixation, in postfixation handling and storage, and in accompanying documentation greatly affect their suitability for some forms of analysis.”

Retention of this massive collection is also a challenge. The report recommends developing retention and disposal protocols. Clinical consultation and current laboratory regulatory requirements also need to be considered when retaining specimens, and must comply with CAP Laboratory Accreditation Program (LAP) guidelines. “The committee recommends that the JPC retain materials in the BRAC Collection for potential clinical consultation only for as long as required by CAP or CLIP [DOD’s Clinical Laboratory Improvement Program]—CLIA guidelines and requirements, whichever specifies the longer period,” states the report.

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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