STATLINE

Read the Latest Issue of STATLINE

In This Issue:

• 44 House, 19 Senate Lawmakers Urge CMS to Revise and Delay PAMA Regulation
• See How the PAMA Regulation Affects Laboratories: CAP Webinar
• CAP Urges HHS Regulations to Ensure Pathologist Network Adequacy in Health Exchange Plans
• Dr. Gomez Co-Hosts Event for Rep. Lynn Jenkins
• A Note to STATLINE Readers

Following a grassroots effort by the CAP and other associations representing the laboratory medicine community, members of Congress sent a letter to the Centers for Medicare & Medicaid Services (CMS) stating the agency must reconsider and rewrite key provisions of its regulation reforming the Medicare clinical laboratory fee schedule (CLFS).

The CAP sent an Action Alert to members on December 4 to have them urge their elected officials to sign the letter spearheaded by Reps. Bill Pascrell, Jr. (D-NJ) and Patrick Meehan (R-PA) in the House and Sen. Sherrod Brown (D-OH) in the Senate. The letters call for several changes to the Medicare Clinical Diagnostic Laboratory Tests Payment System Proposed Rule, which implements the laboratory provisions of Protecting Access to Medicare Act of 2014 (PAMA).

A total of 19 senators and 44 representatives signed the letters sent to the CMS on December 14 and 16, respectively.

The PAMA legislation instituted significant reforms to the CLFS, including a new mandatory reporting system no later than March 31, 2016. PAMA requires applicable laboratories to report private payment rates and test volume to the CMS, which is scheduled to replace the current CLFS beginning in 2017. Failure to comply could result in penalties of up to $10,000 per violation per day.

However, the proposed rule was not released until September 25, missing the June 30 statutory deadline for the final rule and making the proposed timeline for implementation unrealistic given the delays in the rulemaking process. The rule is expected to be finalized in January 2016.

The Pascrell-Meehan and Brown letters request that the CMS make appropriate changes to the implementation timeline in the final rule to provide laboratories reasonable time to comply and avoid financial penalties. The letters also request that the CMS broaden its definition of applicable laboratories subject to reporting to ensure the data and resulting CLFS rates effective 2017 reflect market prices.

The CAP will continue to keep members informed on the latest news regarding the PAMA regulations.

Read the full House and Senate letters to the CMS.

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Watch the archived recording of the CAP's December 17 webinar on how the PAMA regulations will affect laboratory operations and future CLFS Medicare payments.

The proposed regulations would require collecting from applicable laboratories data on payments received from private payers for clinical laboratory services and basing CLFS payments on the weighted median of this information in 2017. Applicable laboratories as defined under the proposed rule could face significant monetary penalties for non-compliance.

View the recording and the slides to this presentation.

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New federal regulations addressing insurance network coverage adequacy on federal and state health plan exchanges must include protections ensuring patients have access to adequate hospital-based physicians, including pathologists, the CAP advocated in formal comments to the CMS.

The CAP does not believe a proposed rule as written will help ensure qualified health plans (QHPs) in state and federal facilitated exchanges (FFEs) meet a basic standard of network adequacy for hospital and facility-based physicians at in-network hospitals and facilities. In a December 16 letter to the CMS, the CAP detailed its concerns and recommended changes to the rule.

"Failure of QHPs to establish that they have met network adequacy requirements for hospital and facility-based physician specialists will potentially subject patients to financial responsibility for out-of-network payments," the CAP stated. "It is grossly misleading to prospective purchasers of these plans, offered on the state or FFEs, when the plan has materially failed to recruit in-network physicians in sufficient numbers at these in-network facilities. Fundamentally, in-network physicians are essential to the performance of many procedures and treatments a patient should expect to receive and be covered for as an in-network service provided at a hospital or facility. Accordingly, these inadequately constituted QHP networks should not be approved by regulators as meeting standards for network adequacy."

The CMS proposed new rules related to risk adjustment, reinsurance, cost-sharing reductions, and user fees for federally facilitated exchanges. Network adequacy rules for qualified health plans should require a sufficient network of providers to assure patients have access to all services without unreasonable delay. While patients may intend to stay within plan networks, the CMS said, they often unknowingly receive care from out-of-network hospital-based physicians, such as anesthesiologists or pathologists. The CMS proposed that each qualified health plan provider network must count toward the annual out-of-pocket cost sharing limits the amounts paid by enrollees for services for out-of-network providers at in-network facilities, unless the enrollee was notified 10 days advance by the plan of the financial responsibility of enrollee for such services.

CAP Advocates for Changes to the Proposal

The CAP believes it is appropriate that costs incurred from out-of-network charges apply to annual out-of-pocket limits. However, the proposal does not address the serious situation of health plans deliberately failing to ensure adequate network coverage, the CAP said. Further, many health plans have been creating narrow or ultra-narrow networks designed to exclude certain providers and facilities from plan participation. This increases the potential for balance billing of enrollees by non-participating providers.

"Given the exclusionary design of narrow and ultra-narrow networks that are proliferating in the federal and state insurance exchanges, the proposed rule must tighten the regulatory requirements for determinations of QHP network adequacy for physician providers at in-network hospitals and facilities," the CAP stated. "If the rule fails to directly address this issue, patients will continue to have difficulty in accessing the provision of in-network services at in-network facilities, regardless of any advance notification by the QHP of potential financial risk to the enrollee, as is contemplated under the proposed rule."

The CAP recommended the CMS require plans to document that their networks have sufficient numbers of in-network physicians, including pathologists, at in-network facilities and hospitals.

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On December 14, CAP Secretary-Treasurer Richard R. Gomez, MD, FCAP co-hosted a fundraising event for Rep. Lynn Jenkins (R-KS) in their home state of Kansas.

"We must build and maintain relationships with our elected congressional members," Dr. Gomez said.

"I attend local events for Representative Jenkins and Senators Pat Roberts and Jerry Moran when I can. Remaining engaged, and being available to speak with lawmakers in person, strengthens our relationship with Congress. It's also beneficial to stay in contact with local congressional staff."

For more information and to get involved in CAP Advocacy, visit and join the CAP's PathNet grassroots network.

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Due to the upcoming holidays, STATLINE is taking a scheduled break during the week of December 28.

If important news breaks during that week, the CAP will send a STATLINE special report to all members. The next regular issue of STATLINE will be published on January 5.

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