College of American Pathologists

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

December 19, 2013  •  Volume 29, Number 25
Next Issue: January 2, 2014
© 2013 College of American Pathologists

In This Issue:

Congress Makes Progress on Medicare SGR Repeal, Payment Reforms that Ensure Flexibility for Pathologists

Before adjourning for the year, lawmakers in Washington worked to stop deep cuts scheduled for 2014 under Medicare’s sustainable growth rate (SGR) formula.

As part of an overarching budget agreement, the House had passed a three-month patch to avert the 24% cut scheduled to take effect next year. The patch was included as part of a House-Senate budget agreement. The budget deal then passed the Senate on Dec. 18. President Barack Obama was expected to sign legislation that includes the three-month fix once it reached his desk. The temporary SGR patch would give Congress time to complete work on a permanent SGR repeal bill in 2014.

Members of Congress also made significant progress on drafting legislation to reform the Medicare payment update system permanently. On Dec. 5, the House Ways and Means Committee and Senate Finance Committee released legislation that repeals the SGR formula. The proposals are intended to remove the annual threat of across-the-board payment cuts and establish a new program to determine physician payment updates under the Medicare program.

The new payment update program would combine current CMS incentive and pay-for-performance programs including Physician Quality Reporting System, Meaningful Use of Electronic Health Record technology and the Value Based Modifier to create a new value-based performance program (VBP). How a physician performs on the metrics for these programs would determine the payment update.

The Finance and House Ways and Means Committees marked-up their respective proposals on Dec. 12. Ways and Means Chairman Dave Camp (R, Mich.) included in the House bill a provision that will help ensure pathologists have flexibility in meeting performance measures and activities under the new VBP program. The amendment had the support of the College of American Pathologists.

Similar language regarding flexibility in the new VBP program was not included in the Finance Committee bill. However, Sen. Johnny Isakson (R, Ga.) raised the issue during the mark-up session. Pathologists in Georgia had spoken with Sen. Isakson about pathology’s concerns with CMS requirements for quality measures and electronic health records meaningful use programs, as well as the value-based modifier geared largely to office-based physicians. These programs are unworkable. For instance, many pathologists do not have routine face-to-face interactions with Medicare patients, which is a component of these programs.

“What does the chairman’s mark do to ensure that there is flexibility in the value-based performance standards so that the physicians are not unduly disadvantaged?” Sen. Isakson asked Finance Committee staff during the mark-up. He also raised the issue directly with Senate Finance Committee chairman, Max Baucus (D, Mont.) and secured a commitment from the chairman to work collaboratively to address his concerns about pathology in any final legislation.

“It’s time to put an end to the cycle of relying on short-term fixes for long-term problems,” Sen. Baucus said. “Doctors and seniors need and deserve certainty, and our mark gives it to them.”

The House and Senate bills do not include an offset to pay for repealing the SGR. Eliminating the SGR will cost $116 billion, according to the Congressional Budget Office. This latest estimate is more than a $100 billion lower than estimates in past years, giving momentum to efforts to repeal the SGR once and for all. Congress will return next year to try to complete its work on a permanent fix. CAP will continue to work to ensure that pathologists can fairly and fully participate in any new payment update system passed by Congress. To help pay for the SGR repeal, CAP is working with its coalition partners to enact legislation that closes the self-referral loophole. An exception to the physician self-referral law allows a doctor to order anatomic pathology services to a laboratory when he or she has a financial interest in that lab. The intent of the exception is to provide patients with convenient services, but anatomic pathology services are rarely provided at the time of office visits.

Studies have shown self-referral leads to overutilization and increased costs in Medicare. Closing the loophole, in this and other similar instances, could save Medicare up to $6.1 billion over 10 years.

CAP, CMS to Meet on Medicare Payment Policy for Pathology Services

The College of American Pathologists will be meeting with Medicare officials in January to discuss concerns regarding payment changes finalized in the 2014 Medicare Physician Fee Schedule.

The Centers for Medicare & Medicaid Services instituted new Medicare only G codes for reporting immunohistochemistry despite significant concerns and intense advocacy work by CAP and other medical societies. Medicare also changed its reporting requirements for prostate biopsies, requiring the use of a Medicare G code for reporting 10 or more prostate biopsy specimens.

CMS had stated that Current Procedural Terminology (CPT) Editorial Panel revisions to 88342 and the add-on code 88343 allowed for the reporting of multiple units for each slide and each block per antibody. “We believe that this coding would encourage overutilization by allowing multiple blocks and slides to be billed,” CMS wrote in the fee schedule rule.

“To avoid this incentive,” CMS continued to state, “we are creating G0461 (Immunohistochemistry or immunocytochemistry, per specimen; first single or multiplex antibody stain) and G0462 (Immunohistochemistry or immunocytochemistry, per specimen; each additional single or multiplex antibody stain (List separately in addition to code for primary procedure) to ensure that the services are only reported once for each antibody per specimen. We believe this will result in appropriate values for these services without creating incentives for overutilization.”

Check with your non-Medicare payers to determine whether they will follow recent Medicare billing and coding changes published in the fee schedule rule.

For reporting services for patients with Medicare Advantage, Medicaid or other health insurance coverage, it is important to work with the individual payers. CMS establishes G codes for use by Medicare, but private insurance companies are required to use CPT. It will be important for pathologists to work with non-Medicare fee-for service plans to ensure that they receive reimbursement for their services as individual payers may take different approaches.

STATLINE will continue to keep you informed on Medicare payment policy news as it develops.

CAP Provides Members with Resources on Coding Challenges

The College of American Pathologists is strongly committed to its role as the leader in pathology CPT coding advocacy. However, CAP is not able to respond to individual CPT billing questions as we cannot assume liability for a CAP member’s decision on interpretation of the Current Procedural Terminology (CPT) codes that are defined by the American Medical Association (AMA) or the G codes that are defined by the Centers for Medicare Services (CMS). To that end, we provide you with the following sources of original information.

CAP recommends that its members obtain a copy of the American Medical Association’s (AMA) CPT Professional Codebook if they do not already have one. The CPT® 2014 Professional Edition is the definitive AMA authored resource to help health care professionals correctly report and bill medical procedures and services. The AMA publishes the only CPT® codebook with the official CPT guidelines. Only the AMA, with the help of physicians and other experts in the health care community, creates and maintains the CPT code set. It is available for purchase at AMA 2014 CPT Codebook.

CAP also recommends that its members contact their individual carriers or payers on their specific payment policies.

CAP has arranged for members to receive a discount on subscriptions to a CPT coding service. Through the PathLab Coding Solutions service, subscribers receive timely written responses supported by authoritative documentation to their CPT questions. Non-CAP members may subscribe to the service at a non-discounted rate. A subscription is required to submit a question to PathLab Coding Solutions. More information on PathLab Coding Solutions is available after logging on to in the Coding and Payment section of

CAP members should also utilize the Centers for Medicare Services (CMS) as the official source on information on G code reporting (see pg. 74333).

The College also has compiled several resources on the Medicare physician fee schedule rule. Listen to CAP’s recent webinar to learn more about how the rule impacts you. A list of frequently asked questions also is available for download.

CMS Finalizes 2014 PQRS Requirements for Medicare Bonuses, Penalties

The Medicare program has finalized tougher criteria for earning Physician Quality Reporting System incentives in 2014, but pathologists will not face 2016 penalties when no quality measures apply to their practices.

The Centers for Medicare & Medicaid Services finalized its rules on Nov. 27 for the 2014 PQRS and other quality programs in the Medicare physician fee schedule. In addition to other payment changes, CMS has outlined its criteria for earning bonuses and avoiding penalties stemming from PQRS reporting requirements. The 2014 PQRS incentive is equal to 0.5% of Medicare charges.

An eligible professional participating in Medicare will be required to report on nine PQRS measures in 2014, an increase from a minimum of three measures in 2013, in order to earn a bonus. However, eligible professionals with fewer than nine measures applicable to their practice only need to report on all of the applicable measures (up to five for pathologists.) PQRS also includes a penalty for eligible physicians who do not meet reporting criteria. The College of American Pathologists had significant concerns over the agency’s cutting Medicare payments based on PQRS reporting activity when pathologists do not have enough applicable measures to report.

“Many pathologists have no applicable measures to report,” the CAP wrote in a Sept. 6 letter to CMS. “Before raising the reporting requirements, CMS should ensure that every physician is able to participate in some way.”

Pathologists have received some relief. CMS has told the CAP that it will not penalize eligible physicians who do not have any PQRS measures that fit in their scope of practice. Furthermore, after CAP advocacy efforts, pathologists using a registry to send PQRS data to CMS may continue using the reporting option when fewer than nine measures apply. CMS encourages physicians who do not think there are any PQRS measures applicable to their practice to double check by contacting the QualityNet help desk at: 866-288-8912, TTY at 877-715-6222 (Monday – Friday 8am to 8pm EST) or via e-mail.

But the PQRS penalty still can be imposed on many practices. CMS will use 2014 PQRS reporting to determine if eligible professionals will be assessed penalties in 2016. The penalty will amount to a -2% adjustment on Medicare pay that year. Eligible pathologists will need to report successfully on three measures—or, one or two measures if only one or two measures apply—in 2014 to stop the 2016 reduction. Note that the requirements to receive the incentive are greater than for avoiding the penalty.

The CAP will continue its work to maintain and create additional PQRS measures for pathologists so they can earn incentives and stave off penalties. Currently, there are five pathology measures in PQRS.

The CAP has proposed three additional measures to capture two lung cancer and one melanoma reporting activities. Those measures were inadvertently omitted by CMS for the 2014 PQRS program. But CMS officials have told CAP staff that the three new measures should be available in 2015.

Pathologists have been leaders in terms of participation in the PQRS when quality measures apply to their specialty. For instance, in 2011 63.2% of 7,636 eligible pathologists reported quality measures.

For more information on PQRS, go to the CAP’s Physician Quality Reporting System Resource Center.

Value-based modifier penalties

Pathologists practicing in groups of 10 or more eligible professionals in 2014 also will have 2016 Medicare payments subject to a value-based modifier adjustment.

A -2% change to Medicare pay in 2016 will occur when group practices of 10 or more eligible professionals do not successfully participate during the 2014 PQRS program year. The negative modifier adjustment would be on top off the separate -2% PQRS penalty for a total of -4%.

Pathology groups may successfully participate in the PQRS as a group through a registry by reporting on all of the measures that apply to the group. CMS will also define successful participation as having 50% or more professionals in a group practice reporting quality measures through claims to earn the PQRS incentive. For purposes of the VBM only, CMS has told the CAP that pathologists and others who have no PQRS measures to report will be counted as having successfully reported in their calculation of a group’s PQRS success.

Congressman Joe Crowley Tours Pathology Lab at Montefiore Medical Center

Rep. Joe Crowley (D-N.Y.) visited the Montefiore Medical Center in Bronx, N.Y. to learn more about the role that pathology plays as part of the medical center’s care delivery team.

Jeffrey Arnold, MD, AP/CP resident, Albert Einstein College of Medicine of Yeshiva University and Montefiore Medical Center, explains the importance of a test as a successful screening tool to Rep. Joe Crowley (D-N.Y.). (Credit: Albert Einstein College of Medicine). Rep. Crowley, who is the co-chair of the Rare Disease Congressional Caucus, toured a pathology lab to get a first-hand account of the importance of preventive health care. He also participated in a microscope teaching session with Jeffrey Arnold, MD, AP/CP resident at Albert Einstein College of Medicine of Yeshiva University and Montefiore Medical Center, and the center’s director of surgical pathology Jim Pullman, MD, PhD. During the session, Drs. Arnold and Pullman showed the congressman a slide and described how the test is an important screening tool. They then showed Rep. Crowley how to identify cervical cancer.

Overall, laboratory tours continue to provide a unique, hands-on opportunity to familiarize members of Congress with the important role pathologists play in health care. When members of Congress make legislative decisions that impact pathologists, it is crucial that they have a strong understanding of what pathologists do and how changes to the system will impact their ability to deliver quality care and accurate diagnoses to their patients.

For information about leading a tour with your representatives, please watch this PathNet video.

Pennsylvania Legislation Tightens State Prohibitions on Inducements

Legislation to substantially strengthen Pennsylvania’s prohibition on clinical laboratories offering kickbacks, fee-splitting and rebates to ordering physicians has passed the Pennsylvania legislature.

Pennsylvania Gov. Tom Corbett later signed the bill, which had the support of the Pennsylvania Association of Pathologists (PAP). The PAP and College of American Pathologists successfully encouraged state lawmakers to amend the legislation in order to make sure that inducements for specimen referrals will be subject to condemnation and sanction under the law.

The legislation, Senate Bill 1042, was initially introduced to broadly overhaul the state law regulating and licensing clinical laboratories. Additionally, Senate Bill 1042 extends state oversight authority to out-of-state laboratories that analyze specimens collected in Pennsylvania, but also allows the exemption of out-of-state laboratories from Pennsylvania inspection requirements—provided those laboratories have been licensed or accredited under the federal Clinical Laboratories Improvement Act (CLIA) and the home state, if applicable.

“This bill explicitly establishes that out-of-state laboratories serving Pennsylvania patients will be subject to these business practice prohibitions and concomitant sanctions for related violations of law,” PAP President Nancy Young, MD, FCAP wrote in a Dec. 9 letter to Gov. Corbett. “This parity in regulations is necessary to ensure universal protection for Pennsylvania patients and denies out-of-state laboratories competitive advantages based upon circumvention of Pennsylvania law.”

Under a concerted lobbying effort, the legislation was amended by the PAP and the College to close a loophole that would have allowed out-of-state laboratories, providing services to Pennsylvania patients, to circumvent the anti-inducement provisions in the law. Recognition of accreditation, for out-of-state laboratories, was also included in the bill at the request of PAP and CAP. Importantly, both PAP and CAP made changes to the bill to expressly ensure that the inducement prohibitions in the legislation applied to specimen referrals as well as patient referrals.


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