College of American Pathologists

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

November 7, 2013  •  Volume 29, Number 23
Next Issue: November 14, 2013
© 2013 College of American Pathologists

In This Issue:

CMS to Finalize Proposed Physician Fee Schedule Rule by Nov. 27; CAP Expects Cuts to Some Key Pathology Codes; Other Key Payment Decisions

CAP expects the final 2014 rule to include cuts to the following pathology code families.

  • Immunohistochemistry – 88342 (PC & TC)
  • Enhanced Cytology Services – 88112 (PC & TC)
  • In situ Hybridization – 88365, 88367, and 88368 (PC & TC)

CMS also requested additional information on the payment level for 88305 TC. CMS reduced payment for 88305 TC by 52 percent last year. The College has provided additional information to CMS on the valuation of the technical component and has argued that the TC was reduced too steeply in 2013 and did not include some key input costs.

CMS has expanded its “misvalued code” initiative by targeting the top expenditure codes from each specialty as potentially overvalued, which triggered the review of the three additional code families.

As regular readers of this newsletter know, CAP has strongly opposed the CMS proposal to link payment for 39 pathology services to the Hospital Outpatient Rates and the additional proposal to “bundle” pathology and laboratory services into the Hospital Outpatient Payment Rates. Since July 8, 2013, CAP has vigorously advocated for the withdrawal of these policy proposals through multiple channels, including comment letters to CMS and member visits to Capitol Hill and the White House.

At the same time, the CAP has also been working through the AMA Relative Value Update Committee to mitigate the payment reductions to specific pathology services by ensuring that the revaluations of pathology services accurately account for the cost of delivering the service. Nevertheless, some reductions are inevitable, particularly to some services, which may not have been revalued for many years.

As the clock ticks down, and as we wait for publication of the proposed rule, CAP’s policy team will continue to keep members updated on any new developments.

CAP will communicate with its members continually during this time through STATLINE, special alerts, updated web content and more. For the most up-to-date information, CAP members should continue to monitor for special issues of STATLINE and register for the members-only portal CAPconnect for the latest news.

Stay Tuned! CAP to Host Exclusive, Members-Only Webinar to Discuss Impact of Final Rule

In the days following CMS’ announcement, the CAP will also schedule an exclusive members-only webinar featuring an in-depth discussion of the implications of the rule and how it impacts members.

Stay tuned for more updates and an invitation to join the webinar in the coming days.

CAP Continues to Push Advocacy Agenda with CMS and White House

Since CMS announced the proposed rule in July, CAP has been leading efforts and working with CAP members to vigorously advocate against these proposed cuts—meeting with multiple government officials and conducting targeted Capitol Hill member fly-ins.

Last week CAP continued this outreach when CAP members and leadership met with the Domestic Policy Council (DPC), which coordinates the domestic policy-making process in the White House, to voice concerns about cuts to pathology reimbursement rates under the proposed rule and to discuss the negative impact cuts would have on patient care.

The CAP, along with prominent Washington law firm Sidley Austin LLP, also met with members of the White House’s Office of Information and Regulatory Affairs (OIRA), which is located within the Office of Management and Budget (OMB), and contributes to reviewing the legality of federal regulations. The CAP raised the legal issues around the cuts within the proposed rule, such as a violation of the statutory requirement that Medicare practice expenses be resource-based, and a serious concern that the proposed rule doesn’t reflect actual resource costs in the non-facility setting. Both approaches run contrary to the law and CMS’ policies and practices.

An official within the HHS Office of Secretary Kathleen Sebelius joined the CAP’s meeting with OIRA, and expressed intent to follow up with CMS officials working on the proposed rule to get an update on CMS’ proposal to cap anatomic pathology services at the HOPPS rate rather than linking payments to the Physician Fee Schedule.

The CAP continues to evaluate the implications of the rule and plans to issue more detailed analysis for members during the coming weeks. The final rule is set to be released by CMS by Nov. 27, and will take effect in 2014.

Bipartisan Congressional Proposal Calls for SGR Repeal

A bipartisan group of lawmakers has unveiled a proposal to repeal Medicare’s sustainable growth rate (SGR) formula. The change would affect pathology reimbursement rates and move reimbursement to an increasingly performance-based framework.

The Senate Finance and House Ways and Means Committees released a discussion draft of the proposal on Oct. 31 that would permanently abolish the SGR, freezing payment levels through 2023. The plan would also put an end to the yearly “patches” on physician reimbursement rates, and establish a system that attempts to tie reimbursement rates to the quality of care provided, rather than basing reimbursement primarily on the quantity of services provided. The performance-based, or so-called “value-based performance (VBP) payment program,” would begin in 2017 and would replace the existing Physician Quality Reporting System (PQRS), the Value Based Modifier (VBM) and requirements for Meaningful Use of health information technology.

The proposal aims to promote alternative payment models, such as Accountable Care Organizations (ACOs). However, it would hold reimbursement rates at current levels until alternative payment models are approved.

The CAP will continue to monitor the progress of the proposal and its implications for pathology reimbursement rates.

The CAP and Key Pathology Groups Representing over 150,000 Medical Laboratory Professionals Advocated for CMS to Make Changes to the Gapfill Pricing of Molecular Diagnostic Codes

The CAP, the Association for Molecular Pathology (AMP), the American College of Medical Genetics and Genomics (ACMG), the American Society of Clinical Laboratory Science (ASCLS), the American Society for Clinical Pathology (ASCP), and the American Society for Histocompatibility and Immunogenetics (ASHI) recently pushed for CMS to rescind two of its recent decisions on the revised molecular pathology “gapfill” pricing codes, released on Sept. 30.

In its more than 100 page submission to CMS, the group stated, “We believe the Molecular Diagnostic Services Program (MolDX) and its extension to other Medicare contractors creates serious concerns about Medicare beneficiaries’ access to medically necessary testing used to diagnose disease, identify potential therapies, and monitor the progress of therapy for life-threatening diseases such as breast, colon and lung cancer.”

CMS uses the gapfilling methodology to establish payment rates for Molecular Pathology Current Procedural Terminology (CPT) codes being paid using the Clinical Laboratory Fee Schedule. The gapfilling process requires Medicare Administrative Contractors (MACs) to set payment rates using a broad range of information outlined in CMS’ Code of Federal Regulations (CFR).

The CAP also worked with groups within the Coalition to Strengthen the Future of Molecular Diagnostics, a consortium of patients, providers, clinical laboratories, diagnostic test manufacturers, pharmaceutical companies and investors with an interest in molecular diagnostic reimbursement rates, to deliver another letter to CMS on Oct. 30 calling for reimbursement relief for several diagnostic tests. Similarly, the CAP worked with the Personalized Medicine Coalition (PMC) to send a letter to CMS addressing rates for molecular diagnostic tests that affect physicians’ ability to practice personalized medicine.

The comment period on the pricing codes closed on Oct. 30, and CMS is currently considering stakeholder input.

New HHS Report Finds Physician-Owned Distributorships Lead to Over-Utilization

A new study by U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) found that physicians who had a direct financial stake in spinal medical device companies—known as Physician Owned Distributorships (PODs)—performed an increased number of spinal fusion surgeries, conceivably contributing to an over-utilization of services

According to the study, in FY 2011, PODs supplied devices used in nearly one in five spinal fusion surgeries billed to Medicare. Spinal surgeries that used POD devices used fewer devices but did not have lower per surgery device costs than surgeries that did not use POD devices. Among the hospitals sampled, about one-third reported buying spinal devices from PODs. When hospitals in the sample began buying from PODs, their rates of spinal surgery grew faster than the rate for hospitals overall. Finally, in FY 2012, surgeons performed more spinal surgeries at hospitals in the sample that purchased from PODs than at those that did not purchase from PODs.

The findings raise questions about PODs’ claim that their devices cost less than those of other suppliers. Surgeons performed more spinal surgeries at hospitals that purchased from PODs, and those hospitals experienced increased rates of growth in the number of spinal surgeries performed in comparison to the rate for hospitals that did not purchase from PODs. Taken together, these factors likely increase the cost of spinal surgery to Medicare over time.

The report was requested by U.S. Senate Finance Committee Ranking Member Orrin Hatch (R-Utah), along with Committee Chairman Max Baucus (D-Mont.) and Judiciary Committee Ranking Member Chuck Grassley (R-Iowa).

The CAP has long been involved in research and advocacy efforts around the effects of financial incentives on utilization of medical services by physicians. The CAP co-sponsored research by noted Georgetown University health care economist Jean M. Mitchell, PhD, published in Health Affairs in 2012 (payment required), which showed that self-referral led to increased utilization of services by urologists who had a direct financial stake in those services. The study found that self-referring urologists billed Medicare for 72 percent more prostate biopsy specimens than physicians who did not self-refer, and the self-referring physicians showed no increase in cancer detection. A new study with similar conclusions, “Urologists Use of Intensity Modulated Radiation Therapy (IMRT) for Prostate Cancer,” was recently published by Dr. Mitchell in the New England Journal of Medicine (NEJM).

To combat the abuse that often results from having a direct financial stake in medical services, the CAP supports the “Promoting Integrity in Medicare Act of 2013 ,” legislation introduced by U.S. Rep. Jackie Speier (D-Calif.) in August 2013. The legislation would amend the Stark Law’s in-office ancillary services (IOAS) exception by removing anatomic pathology, physical therapy, advanced diagnostic imaging and radiation oncology from the list of services that may be self-referred under the current exception. It would not change the status of clinical pathology or other services covered by the IOAS exception.

CAP Defends Forensic Autopsy Performance Standards by the National Association of Medical Examiners

The CAP collaborated with several organizations on a letter to the Scientific Working Group for Medicolegal Death Investigation (SWGMDI) calling for the recognition of only one set of forensic autopsy performance standards, the standards developed by the National Association of Medical Examiners (NAME).

The letter, delivered on Nov. 1, represents the official position of the CAP, NAME and the American Society for Clinical Pathology (ASCP). It was written in response to the SWGMDI draft document, “PRC-12 Autopsy Performance Criteria: Standards, Guidelines and Best Practices.”

In the letter, CAP, NAME and ASCP detailed the reasons behind their call for the sole recognition of NAME’s standards, including:

  • The NAME Forensic Autopsy Performance Standards are developed, amended and produced through consensus by the professional society to which the standards apply, and NAME has robust processes in place, including a specialized committee, that are dedicated to reviewing and modifying the standards. In contrast, the SWGMDI criteria were developed by a small committee containing several members who are not forensic pathologists. The SWGMDI standards would also represent an outside dictate to forensic pathologists and infringement upon their discipline.
  • The existence of a SWGMDI set of forensic autopsy standards introduces redundancy into the discipline of forensic pathology, as a considerable subset of the SWGMDI consists of NAME members, and proposed standards desired by the SWGMDI can be voted upon for inclusion into the NAME standards.
  • The existence of two forensic autopsy performance standards would create ambiguity in the fields of forensic pathology and death investigation.
  • Forensic autopsies are the purview of the qualified medical practitioners who perform them. Therefore, qualified medical practitioners should develop the performance standards.

The CAP, NAME and ASCP stated in the letter that they will not endorse or recognize any forensic autopsy standards that are not the product of NAME, and encouraged SWGMDI to endorse the existing NAME forensic autopsy standards.


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