College of American Pathologists
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November 11, 2010  •  Volume 26, Number 23
Next Issue: November 11, 2010
© 2010 College of American Pathologists

In This Issue:

RVUs for High Volume Codes Hold Steady in ’11 Fee Schedule
Over 80% of PathPAC-Backed Candidates Prevail in Election
Justice Dept. Alters Its Position on Gene Patents in Myriad Filing
In Brief...
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RVUs for High Volume Codes Hold Steady in ’11 Fee Schedule

The physician work relative value units (RVUs) for many high volume anatomic pathology codes will remain stable next year, despite increased pressure from CMS to reevaluate certain codes that the agency identified as potentially misvalued. CMS detailed their response to recommendations submitted by the AMA/Specialty Society Relative Value Scale Update Committee (RUC) in the recently released 2011 Medicare Physician Fee Schedule (PFS). In the PFS, CMS accepted the RUC’s recommendations, which consisted of values developed by CAP for the physician work RVUs of anatomic pathology codes 88300-88309.

Two years ago, CMS instructed the RUC to identify potentially misvalued code families by reviewing high volume codes that met specific criteria, which identified as the 88300-88309 code family, along with services performed by other medical specialties. During this period, the College’s Economic Affairs Committee (EAC) worked closely with CMS and the RUC to determine appropriate values for these codes. The CAP developed recommendations for RUC review based on surveying, historical review, and data analysis to validate the current work RVUs for these codes.

“The CAP has devoted resources for two years in preparing for the revaluation of the anatomic pathology codes, and we are pleased that CMS accepted our recommendations,” said Jonathan L. Myles, MD, FCAP, CAP’s RUC Advisory Committee member. “It is a tribute to our Washington staff and Economic Affairs Committee members who’s insight and dedication has resulted in this successful outcome.” Dr. Myles chairs the Economic Affairs Committee.

New Signature Requisition, Disclosure Requirements

The 2011 PFS also included a signature requisition revision. Beginning next year, CMS is requiring a physician’s or qualified non-physician practitioner’s (NPP) signature on all orders and requisitions, regardless of whether the service is provided under the Clinical Laboratory Fee Schedule (CLFS) or the PFS. Currently, signed requisitions are required only for those services paid on the PFS. NPPs include clinical nurse specialists, clinical psychologists, clinical social workers, nurse mid-wives, nurse practitioners, and physician assistants.

First introduced in the 2011 Proposed Rule, the agency’s justification for this policy change is to eliminate any uncertainty as to whether a document is a requisition or an order (since both would require signatures), whether the type of test being ordered requires a signature, or which payment system does or does not require a physician or NPP signature. “Further, we stated that this policy would make it easier for the reference laboratory technicians to know whether a test is appropriately requested, and potential compliance problems would be minimal for laboratories during the course of a subsequent Medicare audit because a signature would be consistently required,” the rule also stated.

In comments submitted on the proposed rule to CMS, the CAP disagreed with this change. The College asserted that requiring a signature on all test requisitions is not an effective solution because it will lead to further confusion, and require an unnecessary administrative process.

Under this final rule, the signature of a physician or NPP is one way of documenting that the treating physician/practitioner ordered the service. But it is not the only permissible way of documenting that the service has been ordered, as a physician may document in the patient’s medical record that he or she has ordered specific services.

To this end, it is important to note that the final rule indicated that the policy does not apply to electronic or telephonic requests, which the agency does not consider requisitions. “A requisition is the actual paperwork, such as a form, that is provided to a clinical diagnostic laboratory that identify the test or tests to be performed for a patient,” stated the rule. Many physicians and practitioners currently request clinical diagnostic laboratory tests using an order, such as an annotated medical record, documented telephone request noted in both the referring physician/practitioner record and the testing facility’s record, or by electronic mail or other electronic means, by the treating physician/practitioner or his or her office to the testing facility.

Another concern cited by the College—along with other provider organizations—in the proposed rule involved ownership interest disclosure requirements. The proposed rule addressed physician self-referral by requiring physicians who provide computed tomography (CT), magnetic resonance imaging (MRI), or positron emission tomography (PET) scans in their own offices to notify patients of their ownership interest in these services and that they may receive the same services from other suppliers in the area. While the disclosure requirement was mandated under the health care reform law, the implementation details were established by regulation in the PFS.

In its comments to CMS, the College recommended that disclosure should also apply to AP services. The comments also asserted that the most effective approach to eliminating potentially abusive self-referral business arrangements was removing AP services from the in office ancillary services exception or applying a time-based approach. However, in the final PFS rule, CMS affirmed that the disclosure requirement would only apply to advanced imaging services.

Quality Reporting Changes

For CAP members, there are a few other important changes in the 2011 PFS, particularly related to the Physician Quality Reporting System (formerly known as the Physician Quality Reporting Initiative or PQRI). Beginning next year, eligible professionals may earn a incentive payment of 1% (down from 2% in 2010) of the their estimated total Medicare Part B allowed charges for professional services covered under the PFS and provided during the reporting period. Penalties will apply to non-participating eligible professionals beginning in 2015.

Other key PQRS changes relate to the reporting sample requirements. For claims-based reporting of individual measures, CMS has reduced the reporting sample requirement from 80% to 50% of eligible claims. The agency has also created a new Group Practice Reporting Option (GPRO) allowing group practices with fewer than 200 eligible professionals to participate. Open to the first 500 groups who register between Jan. 1-31, 2011, this option expands eligibility by allowing certain eligible providers to qualify at the group level. Specifically, if a multi-specialty practice exercises this option, then the entire group gets credit, even if group members do not have applicable measures.

TC Grandfather Set to Expire on Dec. 31

While the final PFS rule had many positive outcomes, it did not extend the technical component (TC) grandfather provision, which is set to expire on Dec. 31 without further Congressional intervention. In comments to the proposed rule, the CAP urged CMS to make the TC grandfather extension permanent. However, the agency confirmed in the final rule that it will expire at the end of this year, “absent legislation that extends this provision.”

The College has been working with several congressional offices to advocate for an extension, as well as with other health care organizations also facing expiration of similar types of billing provisions. As done in the past, this TC grandfather extension could be included in a bill to extend the SGR “fix.”

Over 80% of PathPAC-Backed Candidates Prevail in Election

Last week’s mid-term elections proved positive for the College’s political action committee, PathPAC, with at least 85% of supported candidates winning their races. In total, PathPAC contributed over $740,000 to 125 candidates running for re-election and 17 running in open races. PathPAC’s 2010 success rate could increase pending the results of the undecided Senate election in Alaska, where incumbent and PathPAC-supported candidate Sen. Lisa Murkowski (R) is expected to prevail. In addition, PathPAC supported two candidates whose races remain undecided—Representatives Jerry McNerney (D-CA) and Dan Maffei (D-NY).

Yet PathPAC’s support could not save the seats of several long-standing incumbents who have championed pathology issues. Rep. Earl Pomeroy (D-ND) and Senator Blanche Lincoln (D-AR) failed to win re-election in an anti-incumbent wave that resulted in Republicans seizing control of the House and making significant gains in the Senate. However, the College has already identified two potential allies who will be new to the Senate—Richard Blumenthal (D-CT) and Mark Kirk (R-IL), the former Congressman from Illinois’ 10th district which encompasses CAP’s Northfield headquarters.

As Connecticut’s recent attorney general, Senator-elect Blumenthal defended before the legislature the state’s direct billing law for anatomic pathology services when urologists attempted to repeal the law earlier this year. During the past 10 years in the House, Senator-elect Kirk has not only repeatedly pushed for repealing the flawed SGR physician payment formula, but also co-sponsored the College’s legislation to revise the federal cytology proficiency testing (PT) program.

Republican Gains Will Intensify Health Care Reform Challenges

With Republicans now in charge of the House, health care reform implementation will likely be a flashpoint on the Hill. Republican and Tea Party leaders are vowing to “repeal and replace” the law, while Democrats and the President are pledging to defend it. Most Washington insiders predict a rancorous beginning to the 112th Congress in January.

Speaking at an event titled, “The Impact of the 2010 Elections on U.S. Health Care Reform,” sponsored by The Harvard School of Public Health, policy experts from both sides of the political aisle predicted high tensions and disparate views could slow implementation of the law to a standstill.

“The lack of bi-partisanship will be exacerbated by budgetary stalling by the Republicans,” predicted speaker Douglas Holtz-Eakin, the President of the American Action Forum and former domestic and economic policy director for the John McCain presidential campaign. “Any money that has not already been allocated by the federal government is at risk, without a doubt,” he added.

SGR Update: Nov. 30 Deadline Three Weeks Away

The current SGR “patch” will expire on Nov. 30, and Medicare physician payments will be cut by 23 percent beginning Dec. 1, unless Congress passes legislation during a “lame duck” session. The CAP recently released an action alert, with instructions on how to call your Member of Congress and urge them to stop the impending SGR cuts.

AMA, along with the CAP, continues to push for quick action when Congress returns next week, ultimately seeking a year or more extension of the current pay rate, plus a 1% increase, at an estimated cost of $15 billion. While the Obama Administration has indicated support for a 13-month fix, many fiscally-minded lawmakers may not vote for any fix that is not attached to a funding offset proposal.

However, the newly elected congressional members have formidable tasks demanding their attention in January, said speaker David Cutler, a former senior health care advisor to the Barack Obama presidential campaign. These issues include physician payment (see box left) and raising the debt ceiling, slated for March.

“Over the next few months, there will likely be no agreement about how to move forward with health care”, said Cutler.

Republicans Dominate State Legislatures

In addition to Congress, Republicans also made significant gains in state legislatures. According to the National Conference of State Legislatures (NCSL), Republicans have added over 675 seats in state chambers. This number could increase, depending on the results of currently undecided races. NCSL estimates that Republicans now hold about 53%—or almost 3,900—of the total legislative seats in the U.S. This is the most seats that the GOP has had on the state level since 1928.

It is still early to predict the impact of these changes on health care reform implementation on the state level, said Rachel Morgan, NCSL’s Committee Director for Health. “Right now, the legislatures will begin to determine their leadership, and that will affect the path forward,” she explained. “The tale will be told when the legislatures convene in January, and the new legislators will be privy to budget details, as well as preliminary details related to the health insurance exchange benefit packages.”

The states must have health exchanges in place by 2014. HHS Secretary Sebelius is defining the benefit packages and the different levels of coverage within these exchanges. However, HHS has released little details thus far, indicating the most of the regulatory information will not be announced until this spring.

Justice Dept. Alters Its Position on Gene Patents in Myriad Filing

The Department of Justice’s (DOJ) recent filing in the Myriad Genetics gene patent appeal case indicates that federal legal authorities are repudiating certain aspects of the U.S. Patent and Trademark Office’s (PTO) longstanding position on the validity of these patents. In its Oct. 31 amicus brief with the Federal Circuit Court of Appeals, the DOJ argued that isolated human genes—“without further alteration or manipulation”—should not be patent eligible. The PTO’s position is that these gene patents are valid.

DOJ likely shifted its position after consulting outside of the PTO and with clinicians from federal health care entities, including the National Institutes of Health and the Center for Disease Control and Prevention, said Chris Hansen, a senior attorney with the American Civil Liberties Union (ACLU). The ACLU and Public Patent Foundation, representing cancer patients and medical groups including CAP, sued Myriad Genetics in March 2009 on behalf of cancer patients and medical groups including CAP.

Not all Gene Patents are Invalid

The DOJ amicus brief argues that the isolation of the DNA sequence is a discovery, not an invention, and therefore should not be patent eligible under current law. However, the DOJ is not opposing all DNA-related patents. The filing asserts that materials produced from engineered or manipulated DNA is patent eligible, such as cDNA and chimeric proteins.

It is important to note that this filing was an amicus brief in support of neither party. Nevertheless, the federal filing adds a strong and powerful voice to the plaintiffs’ position, explained Hansen. “The Patent Office has been mocking our position and saying that we don’t understand gene patents,” Hansen told Statline. “But now we have the government saying that yes, we do understand gene patents and our argument is correct.”

This filing also creates an interesting situation if the case goes before the Supreme Court, according to Daniel Vorhaus, a patent attorney with Robinson Bradshaw & Hinson, P.A. (Charlotte, N.C.) and editor of the Genomics Law Report.

“There is disagreement over the consistency of the government’s position with prior patent case law and plenty of doubt that the Federal Circuit will follow the government’s suggestions,” he explained. “Still, the government’s position is not inconsistent with either the Patent Act and the Constitution, which underlie that case law. Thus, if this case reaches the Supreme Court, as I think most people suspect it eventually will, all bets are off.”

In Brief...

  • CAP Joins Support for Medicare Extensions. With certain Medicare policies set to expire on Dec. 31 unless Congress intervenes, the College and other health care provider organizations recently sent a letter to Senate and House leaders asking them to pass legislation to extend these initiatives. An example of pathology-related policies that are set to expire at the end of the year include an extension of the work geographic index floor and revisions to the practice expense geographic adjustment under the Medicare physician fee schedule. Another example is the extension of payment for the technical component of certain pathology services that allows independent laboratories to directly bill Medicare for certain clinical laboratory services.
  • CMS Hears Concerns about Physician Compare Website. As part of developing the forthcoming Physician Compare Website, CMS recently held a town hall meeting to gather feedback on what measures should be included in public reporting of physician performance. Among many issues on the design of the Website, the agency asked whether a core set of measures could apply to all physicians regardless of specialty. The College staff voiced concern about this proposal, explaining that core measures would not be applicable to all specialty providers (like pathologists), including patient experience, continuity of care, and care transition.

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