College of American Pathologists
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  STATLINE — CAP’s Bi–Weekly Federal and
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November 8, 2012  •  Volume 28, Number 23
Next Issue: November 21, 2012
© 2012 College of American Pathologists

In This Issue:

Divided Congress’ Lame Duck Session Must Now Confront Fiscal Cliff

While Tuesday’s election gave President Barack Obama (D) another four years in the White House, Congress must now focus on the “fiscal cliff” confronting lawmakers on January 1, 2013.

This cliff—a combination of tax hikes and spending cuts scheduled for 2013—include the 26.5% decrease to Medicare physician payment under the sustainable growth rate (SGR), as well as the sequestration cuts totaling $1.2 trillion that are set to hit defense and non-defense spending programs. While Medicare beneficiaries, as well as Social Security, Medicaid, and other low-income programs are exempt, health care programs would be included in these non-defense spending cuts. Medicare cuts are capped at 2% a year, which is estimated to result in $126 billion in savings over 10 years. Unless Congress acts to avert all of these cuts—as it has done in the past for SGR—they will go into effect on Jan. 1.

However, the divided Congress—Republicans with a sustained majority in the House and Democrats maintaining hold on the Senate—complicates any potential “grand compromise” negotiations during this lame—duck session of the 112 Congress that convenes on Nov. 13.

“This was by and large a ‘status quo’ election, as we still have a divided government, but we are facing a fiscal cliff,” said Isabel V. Sawhill, PhD, during a bi-partisan panel discussion at a Nov. 7 Brookings Institution event, “Post-Election Day Analysis – What Happened and What Comes Next?”. The panel featured Republican and Democratic analysts who discussed the impact of the election results on economic, foreign, and national policies, including health care.

“We should not expect a lot to happen during the lame duck session,” explained Dr. Sawhill, who is Co-Director of the Brookings’ Budgeting for National Priorities project. “But issues like physician payment really have to be dealt with...Congress will probably deal with this by kicking the can down the least for the short term.” This means that another SGR “patch” is likely.

Both President Obama and Speaker John Boehner (R-OH) have called on Republicans and Democrats to reach an agreement to avoid the so-called fiscal cliff. But many on Capitol Hill tell the CAP that it’s unrealistic to enact a comprehensive “grand” budget agreement during the next two months. Rather, lawmakers are more likely to negotiate a temporary short-term fix that could include a framework for working on a more comprehensive deal next year. This could also include a short-term patch to avert SGR cuts and delay sequestration and expiring tax cuts.

Forward Focus

This week’s presidential election and Democratic controlled Senate will ensure continued implementation of the health care reform bill. However, how it is implemented will also involve state governors as the Supreme Court decision gave states the option of not adopting the health care reform's mandate to expand eligibility.

Not only is the promise of repeal nearly extinguished, but as the law becomes more entrenched and more people are insured under the law, it will become harder to reverse course, explained congressional scholar Thomas E. Mann, who spoke at the Brookings event. Furthermore, the law’s payment and delivery reforms are already taking hold. “There is such a great deal of innovation now taking place among health care providers, inside Medicare, as well as large medical institutions that the law helped set in motion…to fundamentally change how health care is delivered and reimbursed,” explained Mann.

CMS Aiming to Boost Physician Participation with PQRS Changes

CMS’s final 2013 Physician Fee Schedule (PFS) featured many changes for all providers—including pathologists—to the Physician Quality Reporting System (PQRS), many of which are aimed at increasing the ways that physicians can participate successfully in the agency’s quality reporting initiative.

“For 2013, the agency’s focus appears to be on easing physicians like pathologists into the PQRS program by offering several different mechanisms for them to report measures,” explained CAP Economic Affairs Committee member, Emily E. Volk, MD, FCAP, to Statline. “But next year is also the first year that all providers can be penalized for not participating. If pathologists participate successfully in 2013, they will receive a 0.5% bonus of total Part B allowed charges and they will also avoid a 1.5% deduction in overall Part B Medicare payments in 2015.” Providers who report on at least one measure will not be penalized.

Another important change beginning next year that CMS detailed in the final PFS involved new group reporting options. In 2013, group practices with two or more members may report on measures for all the practice’s patients as a group through a registry, with all members of the group getting credit regardless of which individuals provided the service. In addition, providers in group practices of 100 or more will be subject to a value-based payment modifier adjustment in 2015 determined by their 2013 PQRS participation.

NQF Endorses CAP Measures

The National Quality Forum (NQF) has fully endorsed two CAP-developed quality measures—for breast and colon cancer reporting. The group also gave given limited endorsement to the remaining three measures: Barrett’s Esophagus, radical prostatectomy reporting, and immunohistochemical (IHC) evaluation of HER2 for breast cancer patients.

NQF’s backing is important, as CMS requires the group’s endorsement for continued use of quality measures in the PQRS program.

Pathologists who would like to gain experience with PQRS can report on three measures in the 2012 program through the registry option through February 22, 2013. “Even though providers have to achieve a higher rate of successful reporting through registries than through claims-based reporting (80% versus 50%), providers have had higher rates of PQRS success through this option,” Dr. Volk noted. “It’s also important to note that you can only participate in the registry option as an individual, using your National Provider Identification number and Tax Identification Number (TIN) in 2012, but that in 2013, registry reporting will be available to groups of providers who report on three measures under a single TIN.”

Pathology Measures

There are five CAP-developed quality measures that pathologists may choose to report. All of these measures were recently endorsed by the National Quality Forum (see box).

While pathologists still have a limited set of measures, the College has worked to establish measures that allow a significant number of pathologists to participate, said Dr. Volk. “With the recent changes in the final rule, the opportunities for pathologists to participate and avoid penalties is now much greater.”

For more information on PQRS and other payment changes embedded in the final 2013 Medicare Physician Fee Schedule (PFS), read the recent Statline Special Reports. Also register for next week’s Special CAP Member Two-Part Webinar Series on the PFS, “Confronting New Medicare Payment Realities” (see below to register). Look for additional analysis in forthcoming CAP Today/Statline special reports and future Statline issues.

Register here.

Register Now for Special CAP Member Webinar Series on the Physician Fee Schedule: Confronting New Medicare Payment Realities

CMS’ 2013 final Physician Fee Schedule (PFS) is now out and contains significant changes for pathologists, including revaluation of the surgical pathology code family, placement of newly developed molecular codes on the clinical laboratory fee schedule (CLFS), and expansion of the agency’s Physician Quality Reporting System (PQRS).

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
Speaker: 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 online.

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 online.

GAO Finds More Than 70% Increase in Self-Referral of Imaging Services

The number of self-referred magnetic resonance imaging (MRI) services increased by 84% between 2004 and 2010, compared with an increase of 12% for non-self-referred services during this time period—a 70% difference, according to a recent GAO report. Self-referral is the practice of a physician ordering tests on a patient that are performed by either the referring physician himself or another physician or facility from whom he has a financial interest.

In this Oct. 31 report, the GAO also reported similar findings for self-referral of computed tomography (CT). During this time period, the number of CT services performed by self-referring providers doubled compared to an increase of 30% by non-self-referring providers. The GAO also estimated that self-referring advanced imaging providers likely made 400,000 more referrals than they would have if they were not self-referring, resulting in estimated cost to Medicare of almost $110 million in 2010. This finding led the agency to conclude that “financial incentives for self-referring providers were likely a major factor driving the increase in referrals.”

The report, Higher Use of Advanced Imaging Services by Providers Who Self-Refer Costing Medicare Millions, was released by a group of leading bi-partisan lawmakers from both the House and Senate: Representatives Pete Stark (D-CA), Sandy Levin (D-MI), Henry A. Waxman (D-CA); Senate Finance Chairman Max Baucus (D-MT) and Senator Chuck Grassley (R-IA).

“[This] report is the first objective analysis I’ve seen of the role that self-referral is playing in advanced imaging services,” said Rep. Stark, Ranking Democrat on the Ways and Means Health Subcommittee, in a statement. “It should serve as a wakeup call to Congress that this is an arena where we can’t afford to sit idly by and allow providers to continue these practices. We need to step in to stop these abusive self-referral arrangements now.”

Close the IOAS Loophole

The CAP, as a member of the Alliance for Integrity in Medicare (AIM), has been calling on Congress to end the practice of inappropriate physician self-referral. AIM is a broad coalition of medical specialty, laboratory, radiation oncology, and medical imaging groups focused on eliminating the IOAS exception for advanced imaging, anatomic pathology, radiation oncology, and physical therapy services.

In response to this GAO report, AIM stated that the findings substantiate the group’s ongoing concerns with the misapplication of the IOAS exception to the physician self-referral law “We believe the integrity of the Medicare program continues to be eroded through the use of the IOAS loophole,” the group explained in a Nov. 1 statement. “Not only does the exploitation of the IOAS exception by self-referrers result in increased program spending and unnecessary utilization of medical services, but also higher treatment risks for patients.”

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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