College of American Pathologists

  STATLINE — CAP’s Biweekly Federal and
  State Advocacy E–Newsletter

November 6, 2014  •  Volume 30, Number 23
Next Issue: November 20, 2014
© 2014 College of American Pathologists

In This Issue:

CAP Details How the 2015 Final Rule Impacts Pathologists

On October 31, the Centers for Medicare and Medicaid Services (CMS) released the 2015 final Medicare physician fee schedule. A summary of major issues impacting pathology was released on that day through a Special STATLINE Alert.

The CAP highlighted changes in coding and reimbursement for key pathology services including changes to immunohistochemistry (IHC), in situ hybridization services, and payment and reporting for prostate biopsy specimens for Medicare patients. In addition, the CMS announced its determination on other pathology services targeted as overvalued and payment policy decisions.

The CAP provided more analysis of the 2015 final rule and how it impacts pathologists. The College produced a webinar on November 5 explaining payment changes to pathology services. If you missed it, an archive of the presentation is available along with frequently asked questions on the fee schedule.


The CMS targeted payment for IHC as overvalued and, for 2014, created G-codes to reduce Medicare spending on the services. The CAP immediately engaged with the agency advocating for alternatives to G-codes by proposing changes to American Medical Association Current Procedural Terminology (AMA CPT) codes. The CMS adopted new CPT codes, payment, and will not require the use of the G-codes for IHC in 2015. The revised codes eliminate confusion between Medicare and non-Medicare payers, and allow for revaluation of the initial single antibody stain procedure as well as for each additional single antibody satin procedure when necessary.

The new payment rates include the CMS’ decision to reduce several recommendations developed by the CAP and refined by the AMA/Specialty Society Relative Value Update Committee (RUC). Specifically, the CMS lowered the value recommended by the CAP and the RUC for the IHC add-on service. In addition, practice expense direct costs for medical supplies, equipment, and clinical personal were also reduced by the CMS. These direct costs are used to calculate the practice expense relative value units, which are used to calculate the technical component (TC) as well as global payment amounts.

CAP Advocacy on In situ Hybridization Services

The CMS had expressed concern that FISH services were overvalued since as early as 2010. The agency specifically requested revaluation for the services.

To address these concerns, the CAP advocated for CPT code changes and worked with stakeholders to develop codes and valuations that would avoid creation of G-codes to address payment concerns by the agency. As a result, the 2015 final rule includes a decision to adopt new CPT code changes and revalued payment for in situ hybridization. In addition, payment policy changes included in the 2014 National Correct Coding Initiative (NCCI) Policy Manual limited payment for multiple units of service for in situ hybridization due to CMS concern with overpayment of multiples and the use of multiple probes. This policy change placed limits on the units of service reportable and decreased reimbursement for in situ hybridization.

The new CPT codes and new values seek to capture the physician work and costs associated with performing in situ hybridization services for additional probe stain procedures as well as multiplex probe stain procedures.

As with the IHC services, the final rule included the agency’s concerns on many of the practice expense costs that make up the TC and global payment, and the CAP will be working with the agency to address their concerns. Similar to the IHC code, the CMS also lowered the value recommended by the RUC for in situ hybridization add on service. In addition, the CAP will also be monitoring and providing comments on any changes based on publication of the 2015 NCCI Policy Manual as well as any NCCI code edits.

Prostate Biopsy G-code

For 2015, there will be one payment for prostate biopsy services on Medicare patients using the code G0416.

The CAP opposed the policy change in its formal comments to the agency. The CAP also led an effort with the AMA and other societies to join the College in opposing the change. While the CMS finalized this change, the agency also stated concerns with the current payment rates for the G-code. Medicare wants the rates examined and the CAP is ready to work through the RUC process to review and value the service for 2016 in response to the CMS’ concerns.

Other Code Level Changes Impacting Pathology for 2015

The CMS accepted the CAP’s argument to pay for CPT code 88375, which was new in 2014. This code is for optical endomicroscopy interpretation and represents a reversed decision not to pay separately on the Medicare Fee Schedule last year. The CMS also accepted RUC approved values developed by the CAP for microdissection (88380 and 88381), which was also targeted by the agency. The agency also made cuts to the direct costs used to determine the payment for microdissection services.

Although payment for the service decreased, there was significant concern that Medicare would take actions to not pay for pathologists’ work associated with the service as well as the technical costs.

Targeted Codes for Revaluation in 2016 Fee Schedule

The final rule requested that several pathology services may be overvalued and need additional review. This includes cytopathology interpretation services, the technical component payment for flow cytometry services, as well as revaluation of the Medicare G-code used for reporting all prostate biopsy specimens.

Code Level Impact Table

To better understand these and other changes, the CAP has produced an impact table showing Medicare payment changes to pathology services next year.

The impact table is available for download. Please note that there is not a direct crosswalk between payment for in situ hybridization and IHC services as the codes and reporting will change for 2015. With both code families targeted by the CMS as overvalued, the CAP worked for these 2015 changes to address payment and reporting limitations sought by the agency. For example, in 2014 the CMS payment policies reduced the reporting of CPT code 88368 to one unit of service. In 2015, one unit of the new multiplex code (88377) would be reported.

2015 Medicare Hospital Rule Finalizes Packaging Proposal

Despite opposition from the physician community including the CAP, the CMS finalized a new plan to “package” the technical components of roughly 200 physician services, including 30 pathology services into the hospital’s reimbursement under the 2015 Hospital Outpatient Prospective Payment System (HOPPS) final regulation released on October 31.

The CAP again opposed the CMS packaging proposal as it did in 2013. The College stated it would increase administrative burdens, provide disincentives for medically necessary services, and lead to disruptions in patient care. For these reasons, the CAP urged the CMS to withdraw the proposal.

The CMS’s conditional packaging of certain ancillary services when they are integral, ancillary, supportive, dependent or adjunctive to a primary service will begin with services assigned to ambulatory payment classifications (APCs) having a geometric mean cost (prior to application of status indicator Q1) of less than or equal to $100. This initial set of APCs will “likely be updated and expanded in future years,” the CMS said.

In its responses to commenters to the HOPPS rule, the CMS acknowledged receiving a request for an exception to the ancillary packaging policy for pathology services, but the agency stated it will still implement such packaging. The CMS stated that the policy only affects the facility payment for the technical aspect of the services and does not affect the physician fee schedule payment to the pathologist for the physician work in performing pathology services.

Although finalized under the 2014 rule, but not implemented at that time, packaging for adjunctive and secondary items, services and procedures into the most costly primary procedures (primarily medical device implantation procedures) under comprehensive APCs (or C-APCs) will roll forward effective January 1, 2015. Because of complexity, implementation scheduled for 2014 was delayed until 2015.

CAP to Engage With New Members of Congress

On November 4, the 2014 midterm elections gave Republicans control of both chambers of Congress for the first time since 2006. When the 114th Congress convenes in January 2015, the projected make up of the House of Representatives will be 244 Republicans and 179 Democrats, with 12 races not yet decided by this article’s deadline.

In the Senate, 52 Republicans, 43 Democrats and two independents will be sworn in. Three Senate races are still pending. Senate elections in Virginia and Alaska were too close to call, and the Louisiana race will be determined by a runoff election on December 9.

The members of the House and Senate will select their leadership, committee chairs and determine membership on key committees by the end of January. The CAP will be monitoring the process closely and reaching out to newly elected officials and their staff to provide education on the role of pathologists in the US health system and the College’s advocacy and policy priorities.

On the state level, there will be 31 Republican and 16 Democratic governors with results in Alaska, Colorado, and Vermont still undecided. Vermont’s governor will be decided by a vote of the state legislature in January after none of the candidates received a minimum of 50% of the vote. Given the makeup of the Vermont legislature, current Democratic Gov. Peter Shumlin is expected to serve another two-year term.

In Illinois, Democratic Governor Pat Quinn, who earlier this year vetoed anatomic pathology anti-mark-up legislation, lost his reelection bid.

Republicans also gained control of at least three state legislative chambers. Democrats lost their majorities in the Nevada Senate, Minnesota House, and West Virginia House to Republicans, who were also poised to take over the New Hampshire House. Democrats kept the Kentucky House, one of the last Democratic strongholds in the South, and continue to hold the Iowa Senate.

Be on the lookout for PathNET Action Alerts on both federal and state legislation concerning pathologists. More information on the PathNET grassroots network and important advocacy tools for CAP members is available online.

California Revises Methodology to Assess Pathology Adequacy In Managed Care

In response to CAP and California Society of Pathologists (CSP) advocacy, California managed care plans and financial risk bearing Accountable Care Organizations (ACOs), subject to state regulation, must now assess adequacy and utilization of pathology and clinical laboratory services provided to their enrollees under new criteria promulgated by the state.

Recently, the California Department of Managed Health Care made 14 major revisions to its guidelines that address improving and maintaining managed health plan quality and access to pathology services for patients. California measures each plan for performance and compliance with legal requirements through technical assistance guides (TAGs). Until now, the TAGs have not included any requisite assessment of pathology and laboratory services. The TAGs were updated following recommendations made in March 2014 by the CSP and CAP, and were developed by a CAP work group led by former CAP President Stephen N. Bauer, MD, FCAP.

For instance, one TAG revision now requires an assessment on health plan “mechanisms to identify and correct quality of care problems for all provider entities (eg physicians, hospitals, clinics, and ancillary services, including laboratories)?” Another assessment revision reads “Does the plan analyze its evaluation of access to specialist care, ancillary support services (eg, laboratory, radiology, pharmacy, physical therapy services) and appropriate preventive health services?” Health plans are required to address the guidelines by the state.

The prior TAG omission of criteria for pathology and laboratory services came to light following the introduction of legislation to enhance the role of pathologists in accountable care organizations (ACOs). The CAP and California pathologists worked with State Sen. Fran Pavley to introduce the legislation in 2013. In response, California health officials recognized the TAGs needed to be updated with “a clear focus on ‘adequacy and utilization of pathology and other laboratory facilities, including the quality, efficiency and appropriateness of laboratory procedures and records and quality control procedures,’” according to a letter from the Department of Managed Health Care to Senator Pavley.

The CAP-model ACO legislation has the support of physician organizations at the state and national level and national patient advocacy groups.

CAP to Comment on Palmetto Proposals on Special Stains, Molecular Diagnostics

The CAP will provide comments on draft Local Coverage Determinations (LCDs) proposed by the Medicare Administrative Contractor (MAC) Palmetto.

The Palmetto MolDX program issued draft LCDs for public comment on special histochemical stains and immunohistochemical stains, and molecular diagnostic tests. Palmetto will be holding a series of open meetings in MAC jurisdiction 11 beginning November 10 to discuss these and other local coverage issues. Medicare’s jurisdiction 11 covers the states of North Carolina, South Carolina, Virginia, and West Virginia.

The CAP will be engaged on these issues through open meetings and will provide its comments on the draft LCDs. Further updates will be provided to CAP members through STATLINE as they become available.

UnitedHealthcare Retains FL Pilot Requirements

UnitedHealthcare will move forward with secondary review and subspecialty certification requirements as part of its laboratory benefits management pilot program in Florida.

Following a request by the CAP, the private insurer had reconsidered its position on the requirements but decided to leave them intact. UnitedHealthcare notified the CAP of its decision to retain the requirement, but assess under the pilot at the end of the second quarter of 2015 as the College continues to engage with the insurer on the pilot.

Earlier, the CAP had requested UnitedHealthcare suspend its planned implementation of the pilot program that affects over 80 laboratory services ordered for patients covered by most Florida UnitedHealthcare commercial plans. The program requires use of the Beacon Laboratory Benefits Solutions to provide notification for the frequently performed tests. Beacon is a wholly owned subsidiary of Labcorp.

The College continues to have concerns over fundamental flaws with the program that will negatively affect patient access to services, delay results, and create inconsistencies with current clinical practice, professional judgment, and laboratory operations. The College also expressed particular concern about the pilot’s secondary review and subspecialty certification requirements.

The CAP will continue to provide UnitedHealthcare with comments on the requirements and other aspects of the pilot. Although the pilot began on October 1, UnitedHealthcare has delayed enforcement of the program until after January 1, 2015.

For questions on the program, UnitedHealthcare is directing providers to network managers and/or provider advocates.

ABP Program Approved for MOC: PQRS

The CMS has approved the American Board of Pathology (ABP) Maintenance of Certification (MOC) programs for the 2014 MOC: PQRS additional incentive payment. The approval creates a pathway for pathologists to qualify for additional incentive payments in the Medicare Physician Quality Reporting System (PQRS).

In 2014, participation in the program allows board-certified pathologists already participating in the PQRS incentive program to earn an additional 0.5% incentive payment on their total Medicare Part B allowed charges for 2014, above the PQRS incentive alone. To qualify, pathologists must both successfully participate in the 2014 PQRS and participate in the ABP MOC program “more frequently” than is required to maintain board certification, a condition that is easily met.

For pathologists with time-limited board certification, “more frequently” means participating in one of the following: additional continuing medical education programs, MOC exams, performance improvement activities, or a ABP approved patient safety course.

Pathologists with lifetime certificates can meet the “more frequently” requirement by voluntarily enrolling in the ABP’s MOC program. MOC enrollment costs $100. There is no jeopardy to the lifetime certificate if a pathologist enrolls in MOC and then chooses not to participate beyond 2014.

To earn the incentive payment, all pathologists—both time-limited and lifetime certified—must complete an attestation module by December 31, 2014. The module is available online and costs $30.

More details on the PQRS and MOC: PQRS programs are available on the PQRS Resource Center on the CAP website, and at

Register for CAP’s PQRS webinar

Several changes to the Medicare PQRS will go into effect in 2015. These new changes are important to pathologists as the Medicare program will base future payment penalties on how well physicians and groups perform in the 2015 PQRS.

Register for the CAP’s webinar “How to Report New Pathology PQRS Measures for 2015.”

CAP members can learn how to report new PQRS measures and meet reporting requirements during our webinar. CAP experts will explain how pathologists can successfully participate in PQRS next year.


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