College of American Pathologists
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October 27, 2011  •  Volume 27, Number 22
Next Issue: November 10, 2011
© 2011 College of American Pathologists

In This Issue:

Congressman Frank Tours Newton-Wellesley Pathology Laboratory
CAP Members Discuss Impact of Self-Referral in Hill Visits
Brookings-Dartmouth ACO Leaders Find Final Rule Offers Greater Incentives, Reduced Burdens
Rep. Burgess Introduces Bill Clarifying CLIA Oversight Over LDTs
OIG Issues Critical Opinion on Third Party Lab Management Proposal
USPSTF, Cancer and Pathology Groups Recommend Against Annual Pap Testing
CAP Comments on Efforts to Modernize Human Subject Research Protections
Keep Up with the Latest CAP Advocacy News on Twitter

Congressman Frank Tours Newton-Wellesley Pathology Laboratory

The pathologist’s role in delivering quality medical care and patient safety were a focus of Rep. Barney Frank’s (D-MA) recent tour of Newton-Wellesley Hospital’s laboratory in Newton, Mass. CAP members Michael J. Misialek, MD, FCAP, and Tony Guidi, MD, FCAP, led the tour. Dr. Guidi is the Chair of Pathology at Newton-Wellesley Hospital.

Given the current partisan atmosphere in Congress and that federal health care spending is under intense scrutiny, Rep. Frank emphasized that it’s vital for physicians, like pathologists, to demonstrate their value.

To that end, the Congressman was especially interested that the pathology laboratory is currently a beta site for testing a laser barcoding system for anatomic pathology specimens, similar to what is available in most laboratories for clinical pathology, Dr. Misialek told Statline. “He was very keen to understand how this system could potentially curb specimen errors,” he added. “This system was also an excellent example to show him how integral pathologists are in delivering quality care.”

Another issue of interest to Rep. Frank was the laboratory’s participation in Newton-Wellesley’s medical home model. While familiar with CMS’s Shared Savings Program and accountable care organizations, he was not aware of the medical care model, although coordinated health care delivery is attracting interest on Capitol Hill. “Rep. Frank was very interested in pathology’s role in our medical home model,” said Dr. Misialek. “Like quality and patient safety, pathologists’ involvement in coordinated care were issues that he was looking forward to bringing back to the Hill in an effort to communicate to lawmakers about what’s at stake if health care undergoes further cuts.”

Lab tours are a vital way that CAP members build relationships with lawmakers like Rep. Frank. Check out the recently posted PathNET video on CAP’s Advocacy site for more information on lab tours.

CAP Members Discuss Impact of Self-Referral in Hill Visits

CAP members continued their intense lobbying efforts on Capitol Hill this week, impressing upon their members of Congress the potential savings derived from removing anatomic pathology (AP) from the in-office ancillary services (IOAS) exception to the Stark Law.

As the 12 members of the Joint Committee on Deficit Reduction (the “Super Committee”) look to their colleagues to identify over $1 trillion in savings by Thanksgiving, the College has been talking with members of the Super Committee and other members of Congress about how closing the IOAS loophole can contribute to their savings goal while decreasing unnecessary utilization.

Indeed, CAP member Peter Kolbeck, MD, FCAP, told Statline that the members of Congress who he met with this week were intrigued by the potential savings, but also concerned about how these arrangements were driving overutilization without any benefit to patient care.

“In my meeting with Rep. Lois Capps (D-CA), we discussed that the current Medicare fee-for-service reimbursement model is based on the wrong incentive—that of driving volume—particularly when it comes to abusive ‘in-office’ self-referral arrangements for pathology services.” said Dr. Kolbeck, who is the President of the California Society of Pathologists. “She is interested in how the current shift from fee-for-service to coordinated care like ACOs may address some of these issues, although we discussed that self-referral is an immediate problem that needs to be addressed.”

Dr. Kolbeck also met with other members of Congress from California, including Reps. Pete Stark (D-CA) and Henry Waxman (D-CA), as well as the offices of Reps. Xavier Becerra (D-CA) and Daniel Lungren (R-CA). Rep. Becerra is a Super Committee member; Reps. Stark, Waxman, and Capps sit on key Congressional health care committees.

In his meeting with Rep. Stark, Dr. Kolbeck clarified the importance of removing AP services from the IOAS exception. “We discussed the need to close that loophole, and how it was potentially impacting constituents in his district,” he explained.

TC, SGR Remain a Focus

In addition to advocating on the self-referral issue, the College continues to meet with lawmakers on two other pressing issues: extending the Medicare “TC-grandfather” provision and the impending 29.5% Medicare physician payment cut under the sustainable growth rate (SGR) set to take effect as of Jan. 1, 2012.

One of a number of “extenders” set to expire at the end of this year, unless extended by Congress, this provision allows independent laboratories to bill Medicare for the technical component (TC) of surgical pathology services for hospital patients.

Earlier this week, the College issued a “TC Action Alert” urging CAP members to contact their member in the House of Representative to support H.R. 2461, the Physician Pathology Services Continuity Act of 2011, which would permanently extend this provision. The legislation was introduced this summer by Representatives Geoff Davis (R-KY) and Mike Ross (D-AK).

Another piece of pending legislation offers a more short-term fix. On Oct. 12, Sen. Pat Roberts (R-KS), co-chairman of the Senate Rural Health Care Caucus, and Sen. John Barrasso (R-WY) included a one-year TC-grandfather extension in the Rural Hospital and Provider Equity Act (R-HoPE; S. 1680). Sens. Kent Conrad (D-ND) and Tom Harkin (D-IA) are also co-sponsors on this legislation.

Access the TC Action Alert on the CAP website.

CAP members are urged to visit the PathNET Legislative Action Center to sign up for the Self-Referral Action List and find out more about the current Grassroots Fly-In, when CAP members travel to Washington, DC, to meet with their Members of Congress on this issue.

Brookings-Dartmouth ACO Leaders Find Final Rule Offers Greater Incentives, Reduced Burdens

While implementation challenges remain, the leaders of the Brookings-Dartmouth ACO Network said that CMS’s final ACO rule’s greater financial incentives and reduced administrative burden proves that the agency listened to provider concerns to the proposed rule. The College is a member of the Network, which held an Oct. 26 Webinar analyzing the final ACO rule.

“There are increased savings opportunities, reduced participation requirements, and more upfront funding opportunities compared to the proposed rule,” said Elliott Fisher, MD, Director, Center for Population Health, The Dartmouth Institute for Health Policy and Clinical Practice and Co-Chair of the Brookings ACO Learning Network. “Of course, real implementation challenges remain for many providers, but CMS did respond effectively to provider comments on the proposed rule.”

Shared Savings Changes

One of the most significant changes in the final rule involves the two “models” or “tracks” available to participants, noted the Network’s other Co-Chair, Mark B. McClellan, MD, PhD, on the Webinar. Similar to the proposed rule, there are two tracks open to participants. However, unlike in the proposed rule, Track 1 no longer features a two-sided risk element in the final rule so ACOs need not take on risk for any losses in the first three years. “Track one is now shared savings for the duration of the agreement, three years, and participants in this track no longer have to make a change mid-way through the agreement to shared risk,” explained Dr. McClellan, who is also Director of the Brookings’ Engelberg Center for Health Care Reform.

The shared savings rate for Track 1 is 50%. Track 2 involves shared risk, and thus provides higher shared savings rate of 60%. While the shared savings rates are essentially the same as they were in the proposed rule, providers are likely to see the shared savings sooner under the final rule. “One of the big differences is that providers’ shared savings is based on their first dollar saved, rather than meeting a minimum savings threshold as was in the proposed rule,” he stated.

Quality Measure Changes

Dr. McClellan also noted the decrease in quality measures—from 65 in the proposed rule to 33 in the final rule. Reporting and performance measurement—and related payment—will be phased in, as outlined in the final rule (see box).

Paying for Reporting Measures, Performance

  • Year 1: Pay for reporting for all measures
  • Year 2: 25 measures are pay for performance, 8 are pay for reporting
  • Year 3: 32 are pay for performance, 1 is pay for reporting

He noted that another key change was that meaningful use is no longer a condition of participation, but rather a performance measure. “Full EHR implementation is no longer required to participate,” Dr. McClellan explained. “EHR use is now a performance measure and counts for double the points [in terms of quality scoring].”

Related CMS Initiatives

Moving forward, Dr. McClellan noted that interested participants could still face significant start-up and operating costs. Based on their experience with current ACO pilots, the Brookings-Dartmouth Network has identified some approaches to minimize these costs that leaders are looking forward to sharing with CMS. That being said, he noted that the flexibility of the final ACO rule, in addition to several other CMS coordinated care initiatives, offer a multitude of options to interested providers.

“There are a range of things that interested providers can choose from, from CMS’s bundled payment initiative to medical home initiatives to the Advanced Payment model,” said Dr. McClellan. “If you are not quite ready to do an ACO, there are a number of opportunities that you can now take advantage of to help get you there.”

A comprehensive listing of CMS’s coordinated care initiatives is available on the agency’s Innovation Center Web site. The College is currently analyzing the final rule’s impact on pathologists.

Rep. Burgess Introduces Bill Clarifying CLIA Oversight Over LDTs

Congressman Michael C. Burgess, MD (R-TX) has introduced legislation, The Modernizing Laboratory Test Standards for Patients Act (H.R. 3207), that clarifies that CMS under CLIA has oversight jurisdiction over laboratory developed tests (LDTs), rather than the FDA.

While FDA officials insist they have authority over these devices, they are currently exercising enforcement discretion, although they have indicated that they will increase oversight in the near future. The bill establishes firm registration requirements for every LDT in use now and in the future, as well as a notification and review process providing CLIA the authority to evaluate the clinical validity of LDTs. However, unlike the CAP proposal, the bill does not apply a risk-based classification system.

CAP’s LDT Oversight Proposal

The CAP proposal relies on a three-tier ‘risk based’ system that would protect patients by instituting a graduated system of review based on a test’s potential risk to patients. CAP believes optimum oversight would be achieved by applying a risk-based classification (low-, moderate-, or high-) to each LDT; strengthening CLIA accreditation standards on labs using low- and moderate-risk LDTs, and requiring FDA review of all high-risk LDTs.

High-risk LDTs are those LDTs intended to guide high-risk treatments or employ novel technology and/or statistical calculations that cannot easily be linked to existing test systems. In these cases, the CAP believes the FDA is best equipped to ensure necessary controls are applied to protect public health and safety.

The College has met with FDA officials in recent years about its proposal to apply a risk-based model to address oversight of LDTs in an inclusive, systematic way. CAP’s model, initially proposed in 2009, employs a public-private partnership to strengthen LDT oversight by relying on third party accreditors and inspectors to oversee and monitor standards for low- and moderate-risk LDTs. High-risk LDTs would be reviewed directly by the FDA.

In addition to these meetings with FDA officials, the CAP has met with CMS officials to discuss the College’s oversight proposal, as well as strengthening CLIA to address concerns related to clinical validity of LDTs.

OIG Issues Critical Opinion on Third Party Lab Management Proposal

The HHS Office of Inspector General (OIG) recently issued an unfavorable advisory opinion related to third party laboratory business arrangements, specifically that a proposed arrangement in which physicians invest in a company that provides pathology services to a third party could be violating the Federal anti-kickback statute. The OIG issued its findings in an Oct. 11 advisory opinion based on a review of a proposed arrangement from an unidentified party.

While this opinion is in response to a specific proposal, the College is pleased that the OIG is opposing such a laboratory business arrangement. CAP was also pleased that OIG noted the similarities between the proposed arrangement and the questionable joint venture arrangements involving clinical laboratory services to which it had objected in significant guidance previously.

OIG To Study Laboratory Utilization in 2012

Next year, the OIG will review trends in laboratory utilization under Medicare, looking particularly at the types of laboratory tests and the number of tests ordered. For more information, view the 2012 OIG Work Plan online.

This is in line with CAP’s longstanding advocacy efforts against these arrangements, as well as related self-referral arrangements. As recently as 2010, the CAP, has advocated with OIG to issue a special fraud alert warning about the operation such arrangements.

In this most recent advisory opinion, the OIG indicated that it has warned about arrangements in which a health care provider expands in to clinical diagnostic services by contracting with an existing provider of that service to operate a newly formed laboratory subsidiary “on essentially a turnkey basis.” While acknowledging that this is essentially a converse of these arrangements, the OIG found that the proposed arrangement did not qualify for any of the safe harbors under the anti-kickback statute, noting that the usage fee paid to the company by the laboratory would be based on a percentage of the laboratory’s income.

“This fee structure would effectively link the New Physician Investors’ profit distributions to the laboratory business they send the Path Lab, posing considerable risks of overutilization of laboratory services, distorted medical decision-making, and increased costs to Federal health care programs,” stated the OIG.

USPSTF, Cancer and Pathology Groups Recommend Against Annual Pap Testing

Two updated sets of cervical cancer screening draft recommendations are currently open for comment: one from the United States Preventive Services Task Force (USPSTF) and the other a multi-stakeholder effort involving the American Cancer Society (ACS), the American Society for Colposcopy and Cervical Pathology (ASCCP), and the American Society for Clinical Pathology (ASCP). Both sets of guidelines recommend against annual Pap testing.

Women age 21 to 65 should now be screened for cervical cancer every three years using the Pap smear test, according to the draft USPSTF recommendations, which are open for public comment until Nov. 16. The group’s previous recommendations called for testing every two years. However, the task force said that testing every three years is just as effective as annual screening in detecting potential cancer cells and the less frequent testing will reduce the chances of false positive results, which can lead to unnecessary secondary testing and invasive interventions.

In addition, the USPSTF also recommended against regular HPV screening, citing inconclusive scientific evidence in identifying the benefit of combining regular HPV screening with Pap tests or performing an HPV test instead of a Pap test.

ACS-ASCCP-ASCP’s Perspective

Similar to the task force’s recommendations, the ACS-ASCCP-ASCP draft recommendations propose screening every three years for women age 21 to 29 with either the liquid-based or conventional Pap test, and every two to three years for women over 30 who have had three normal Pap test results in a row. These draft recommendations are open for comment until Nov. 9. These proposed guidelines will also be discussed at a symposium, ASCCP-ACS-ASCP’s Cervical Cancer Screening and Prevention: The Role of Molecular Testing, held Nov. 17-19, at the National Institutes of Health Neurosciences Building in Rockville, Maryland.

These recommendations calling for an extended testing interval of three years reflect the current realities facing cervical cancer screening, explained CAP member Ann T. Moriarty, MD, FCAP, who helped to develop certain aspects of the ASCCP-ACS-ASCP’s draft guidelines as part of a workgroup on molecular screening for cervical cancer. “While considered the most successful cancer test in the United States, the Pap test is not perfect, in that there are false negatives and false positives,” she told Statline. “In the case of false positives, this can lead to unnecessary interventions and treatments.”

Indeed, she said that given the effectiveness of Pap testing, cervical cancer rates have gone down significantly in recent years, and that most cases in the U.S. are diagnosed in women who have not adequately been screened, meaning never been screened or who have failed to follow-up on abnormal test results. “From the pathologists’ perspective, we need to be aware that as the prevalence drops, there is a real need for a more sensitive test that identifies cervical cancer without overtesting and unnecessary intervention,” Dr. Moriarty added.

CAP Comments on Efforts to Modernize Human Subject Research Protections

The College is supporting HHS’s goals of enhancing human subject protections while streamlining the rules governing research, according to forthcoming comments in response to the agency’s Advanced Notice of Proposed Rulemaking (ANPRM) about updating current regulations for protecting human subjects participating in research.

While these regulations have been amended since initially developed 20 years ago, they are not current with the proliferation of multi-site clinical trials, as well as research involving the Internet, biological specimen repositories, and the use of advanced technologies, such as genomics.

One of the most significant changes under consideration relates to requiring written consent for research use of any biospecimens collected for clinical purposes after the effective date of the new rules, such as research with excess pathological specimens. The College supports this principle but wants to ensure that any proposed consent requirement will not have a negative impact on the pathologists’ ability to fulfill their responsibilities. Further, the CAP wants to ensure that pathologists are not liable, should the researcher or front-line provider responsible for patient intake fail to ensure that adequate consent was obtained prior to initiating a research study, according to the comments.

In its comments, the College is also looking to clarify that use of residual specimens to conduct quality assurance and quality control activities is not considered research. Historically, these activities have fallen outside of human subject research regulations, explained CAP member Roger D. Klein, MD, JD, who assisted in developing these comments. “The preceding definition of research has not included assay validation and development or quality assurance, as they are not directed towards the production of generalizable information,” he explained to Statline. “We just want to ensure that HHS does not alter this policy.”

The College also signed on to a letter by the Confidentiality Coalition highlighting concerns related to this HHS ANPRM and the privacy and security of patient information.

This ANPRM is only the initial step in a comprehensive overhaul of the regulations, and stakeholders like the CAP will be provided additional opportunities to comment. The next step is for HHS to issue a Notice of Proposed Rulemaking, which will include actual regulatory language.

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 the pathology industry. For the latest health care news, be sure to check out what we are following on Twitter.


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