College of American Pathologists
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November 12, 2009  •  Volume 25, Number 23
Next Issue: November 25, 2009
© 2009 College of American Pathologists

In This Issue:

Healthcare Reform Moves Forward and Rallies the House of Medicine
2010 Physician Fee Schedule Highlights
Gene Patent Lawsuit Clears Another Hurdle
Public Comment Invited on Pathology Quality Measures
Pathology Represented on BCBS “Blue Distinction” Panel
Red Flags Rule Deadline Delayed Until June 1, 2010

Healthcare Reform Moves Forward and Rallies the House of Medicine

Passage of the House Democrats’ sweeping healthcare reform bill, H.R. 3962, the Affordable Health Care for America Act re-energized the house of medicine this week as delegates at the annual meeting of the American Medical Association hotly debated AMA’s support for the bill and aired concerns about some of its key provisions.

Last week the leadership of the American Medical Association lent its considerable clout to support the bill while maintaining its position that healthcare reform must resolve the issue of Medicare payment for physicians. That strategy enraged some members of the AMA House of Delegates meeting in Houston over the weekend, and 10 of the 180 medical societies represented there submitted a resolution to rescind the AMA’s support of the bill. The resolution failed, and the House of Delegates voted to support the AMA leaders’ position on the House healthcare bill, but not before all points of view were heard.

At issue was AMA’s backing of a bill that lacks medical malpractice reform and a permanent replacement for the Sustainable Growth Rate (SGR) formula used to calculate Medicare physician payment.L

While the House bill is imperfect, policy experts believe it contains fewer provisions physicians would oppose than the bill passed out of the Senate Finance Committee. That bill included provisions for creating an independent commission to advise the President and Congress on methods to reduce healthcare costs including physician payment; calls for just a one-year fix for the SGR; levies penalties on physicians who do not participate in Pay for Performance programs after 2013; and mandates payment cuts to all physician services to offset bonuses for primary care physicians. CAP raised concerns about these issues in a letter to the Senate Finance Committee in May.

In the end, the AMA House of Delegates affirmed its support for the House bill and their commitment to work with Congress to achieve reforms that include seven critical components of AMA policy:

  • Health insurance coverage for all Americans;
  • Insurance market reforms that expand choice of affordable coverage and eliminate denials for pre-existing conditions;
  • Assurance that healthcare decisions will remain in the hands of patients and their physicians;
  • Repeal of the SGR
  • Implementation of medical liability reforms
  • Streamline and standardize insurance claims processing requirements

The delegates also voted to have AMA actively oppose inclusion of specific provisions in any health reform legislation:

  • Reduced payments to physicians for physicians that do not participate in PQRI;
  • Medicare payment rates mandated by a commission that would create a double jeopardy situation for physicians;
  • Cuts in payments to utilization outliers;
  • Medicare payment cuts for all physician services to partially offset bonuses for one specialty to another;
  • Redistributed Medicare payments among providers based on outcomes that are not scientifically valid, verifiable and accurate;
  • Arbitrary restrictions on physicians who refer Medicare patients to facilities in which they have an ownership interest.

CAP President, Stephen N. Bauer, MD FCAP and William V. Harrer, MD, FCAP, chair of the CAP delegation to the AMA, spoke at the House of Delegates meeting in support of the work of the AMA’s reference committee and its consideration of key health system reform policies.

Although the CAP has not endorsed or opposed any bill, our members share many of these concerns, and the CAP professional staff and leaders continue to advocate on these and other issues. In a Letter to House Leaders regarding H.R. 3962, the CAP addressed key issues facing pathologists, urging Congress to replace the SGR; ensure that expansion of the PQRI program includes streamlining the measures approval process; including ceilings on non-economic damages for medical liability reform; and adherence to Stark anti self-referral laws in the coordinated care model. CAP also advocates for a demonstration project to assess the pathologist’s involvement in diagnostic test coordination.

Overview of the Bill

H.R. 3962, the Affordable Health Care for America Act passed by a narrow margin of 220-215 last weekend, contains dramatic insurance reforms and lays the foundation for delivery system reform that could alter the way patient care is provided and how providers are paid for many years to come.

Beyond the insurance reforms and increased coverage, physicians are likely to feel other changes as early as next year if the legislation is signed into law.

Legislators are pursuing coordinated care models, such as medical homes and accountable care organizations, with episodes of care becoming the likely lens through which medical care will be viewed. To encourage more physicians to oversee care coordination as primary care providers, the bill proposes primary care bonuses of 5% in 2010.

Importantly, the House bill removed a provision that would have reversed cuts in 2010 Medicare physician payments resulting from the Sustainable Growth Rate (SGR) formula. Instead, the House has introduced a separate measure, H.R. 3961, the Medicare Physician Payment Reform Act, which would repeal the SGR once and for all. Earlier this week CAP joined more than 100 other medical specialty and state societies in sending a letter to the Speaker of the House of Representatives urging passage of the bill.

This separate measure is expected to be voted on in the House early next week, and would base the physician payment update for 2010 on the medical economic index while a new formula is put in place. The new formula would provide updates to physicians providing primary and preventive care services of GDP +2%, and GDP +1% for most other physician services. Accountable care organizations would be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system.

We will need every pathologist to call their member of Congress and urge them to vote yes on H.R. 3961. Get more details...then make the call.

The larger bill that passed in the House last weekend would further impact physician services by calling for the revaluation and bundling of codes, and lays the foundation for moving from the current fee-for-service model of care to a system based on payments for episodes of care and incentives for quality patient outcomes.

In terms of the impact on patient outcomes, the bill funds expansion of the current Medicare pay for performance (P4P) program, and includes a 2% bonus for physicians who participate in 2010. Greater emphasis on prevention and wellness will be supported by the use of comparative effectiveness research (CER) programs, and the national adoption of health information technology and use of related data.

Next Steps

If the House passes the SGR legislation, it will be sent to the Senate. Similar legislation considered by the Senate last month, ran into trouble because the cost of halting and preventing future physician cuts in the Medicare program was not offset and would have added billions of dollars to the deficit. The Senate has included a .5% increase in physician payments for 2010, but not a permanent fix. The CAP along with the AMA, continues to advocate that the House and Senate enact a permanent solution this year. The Senate will likely begin deliberation of its own healthcare bill later this year.

Comment On This Article

2010 Physician Fee Schedule Highlights

The Centers for Medicare and Medicaid Services (CMS) released the review copy of the 2010 Medicare Physician Fee Schedule (MFS) final rule on Oct 30, 2009. The following are highlights of the final rule.

2010 Physician Update

Effective January 1, 2010, the conversion factor for physician services will be -21.1 percent, reducing the current rate from $36.066 to $28.4062, unless Congress acts to fix it.

Removal of Physician-Administered Drugs from SGR Formula

Physician-administered drugs will be removed from the calculation of the SGR, retroactive to the 1996/1997 base year. This will restore $122 billion for funding physician services over ten years. CAP has advocated for the removal of physician-administered drugs from the SGR formula.


CMS has decided not to go forward with a proposal included in the preliminary rule to require providers to submit quality measures for a minimum of 15 Medicare beneficiaries for one measure during a 12-month period, and a minimum of 8 beneficiaries during a 6-month reporting period in order to qualify for a PQRI bonus. CAP advocated against this requirement as it would further limit the number of pathologists able to participate in the program.

Starting in 2010, in order to make reporting periods consistent for the different reporting mechanisms (claims-based, registry and EHR), providers will be able to submit claims-based measures for either a 12-month period or a 6-month period starting January 1, 2010 – December, 2010, or July 1 – December 2010. Claims-based reporting is currently the only way providers with less than 3 measures can submit quality measures.

Practice Expense

CMS will use the Physician Practice Information Survey (PPSI) data to update the practice expense (PE) RVUs. CAP joined with the AMA in conducting the survey to update the practice expense RVUs. As a result of the survey, projected decreases in reimbursement were negated for pathology. The revised PE RVUs resulting from the PPIS will be phased in over a four year period.

CMS agreed to continue using this supplemental survey data collected by CAP in a clinical lab survey to calculate PE RVUs for clinical labs.

Elimination of the E/M Consultation Codes

As of January 1, 2010, CMS will eliminate the use of all E/M consultation CPT/HCPC codes with the exception of the new G-codes for telehealth consultations. Codes being eliminated include inpatient codes (99251-99255) and office/outpatient codes (99241-99245). In place of the consultation codes, providers are instructed to bill initial hospital care (99221-99223), initial nursing facility care (99304-99306) or initial office visits (99201-99205), as applicable.

CMS will implement this provision in a budget-neutral way by increasing the work RVUs for initial hospital and nursing facility visits by about 0.3%, and increasing the work RVUs for both new and existing office visits by about 6%.

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Gene Patent Lawsuit Clears Another Hurdle

The gene patent court challenge filed by the American Civil Liberties Union on behalf of CAP and other plaintiffs representing an estimated 150,000 researchers, physicians, and laboratory professionals passed another important hurdle last week as a federal district judge ruled that all of the plaintiffs have the right to challenge patents on human genes.

The lawsuit was filed in May 2009 against BRCA1 and BRCA2 patent holders Myriad Genetics and the University of Utah Research Foundation, and the U.S. Patent and Trademark Office on the grounds that the patents are illegal and restrict both scientific research and patients’ access to medical care, and that patents on human genes violate the First Amendment and patent law because genes are products of nature. BRCA1 and BRCA2 are indicators for hereditary predisposition to breast and ovarian cancer.

Last week’s ruling responded to the defendants’ motions to dismiss the case on a variety of technical grounds, the most sweeping being that the plaintiffs lacked standing because they were not prepared to sequence and/or analyze BRCA genes or induce others to do so, and that none had a realistic fear of being sued if they did so. The judge rejected those arguments for all plaintiffs, including scientific organizations, clinicians and researchers, as well as genetic counselors, patients groups, and individual women.

In doing so the judge also acknowledged the long-term influence this case could have on medical research, writing, “The widespread use of gene sequence information as the foundation for biomedical research means that resolution of these issues will have far-reaching implications, not only for gene-based health care and the health of millions of women facing the specter of breast cancer, but also for the future course of biomedical research.”

The next step will require the defendants to file written arguments.

Visit the CAP’s ACLU Gene Patent Lawsuit Resource Center or read the November 3 Court Ruling.

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Public Comment Invited on Pathology Quality Measures

In keeping with the CAP’s commitment to improving the quality and safety of the services to our patients, the CAP has continued its effort to develop quality measures. The CAP and the Physician Consortium for Performance Improvement® (PCPI) are soliciting public comments on nine draft pathology performance measures developed by the CAP. Public comment on the measures is an important part of the multi-step process required for measure review by the AMA PCPI and for endorsement by the National Quality Forum.

The CAP has participated in the Physician Consortium for Performance Improvement® for almost a decade and began actively developing pathology performance measures with the PCPI in 2006. There are currently two pathology measures for breast and colon cancer protocols endorsed by the National Quality Forum and included in CMS’ Physician Quality Reporting Initiative (PQRI). If additional measures are approved, more pathologists could participate in the Medicare Pay for Reporting program, which paid 1.5% bonuses to physicians who in 2008 reported on approved quality measures. The public comment period is one step in the measures review and approval process.

The comment period began on Monday, October 26, 2009 and will close at midnight (ET) on Wednesday, November 25.

Review the proposed measures or comment on them at the CAP website.

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Pathology Represented on BCBS “Blue Distinction” Panel

Jimmy R. Clark, MD FCAP will represent the CAP as an expert panelist on Blue Cross, Blue Shield Association’s Blue Distinction programs in breast, colon and rare and complex cancers.

Dr. Clark, a resident of West Allis, Wisconsin, is a member of the CAP Economic Affairs Committee. He will serve a two-year term as the CAP’s representative, and the sole pathologist among approximately 10 clinicians including patient representative on Blue Distinction’s core expert panel.

Blue Distinction is a designation awarded by the Blue Cross and Blue Shield companies to medical facilities based on evidence-based selection criteria that evolves over time as the state of science evolves and with the collaboration of expert physicians' and other medical organizations’ recommendations.

The Blue Distinction cancer care model focuses on acute episodes, covering pre-diagnostic, diagnostic, acute care and long term surveillance. The program will broaden its focus on rare and complex cancers to also include breast and colon cancer.

For more information contact Sharon West, CAP Director of Professional Affairs.

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Red Flags Rule Deadline Delayed Until June 1, 2010

The deadline by which all creditors are required under the Federal Trade Commission’s Red Flags Rule to implement written identify theft prevention and detection programs has again been delayed, this time until June 1, 2010.

Although the rule applies to physician practices that defer payment of a client’s bill, many pathology practices are considered to be low-risk for identity theft. (See the FTC tool for Low-Risk Creditors.).

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