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The first 2016 skirmishes on state legislation to limit balance billing by out-of-network physicians, including pathologists, at in-network facilities, have emerged in several northeastern states: Pennsylvania, New Jersey, New Hampshire, and Massachusetts.

In New Hampshire, legislation (HB 1516) to prohibit balance billing of patients by out-of-network physicians, at in-network facilities, was considered in a legislative hearing on January 19. The bill would have authorized the Department of Insurance to set all out-of-network payment rates for every hospital-based medical specialty. In the fiscal note on the bill, the New Hampshire Insurance Department estimated it would only require $50,000 a year for an outside consultant to set the rates for every hospital-based specialist.

In written testimony, the New Hampshire Society of Pathologists (NHSP) pointed out that it had attempted to convince the insurance department to consider physician pathology services in its network adequacy assessment rules, now under development for over a year. The department to date has resisted including any assessment of physician pathology services in its approval of health plans. According to NHSP: "As a result, there is not a single physician pathology service listed in the [list of] minimum services required for assessment to determine insurance network adequacy. This is the case, despite the fact that the 'pathologist interpretation of biopsy' is the eighth most frequently performed physician service in the State of NH."

In verbal testimony before the Committee, former NHSP President David Novis, MD, pointed out that New Hampshire pathologists want to be in-network providers to all health plans. Nevertheless, the bill allows insurance payers to exclude from the network, pathologists and essential pathology services. Without adequate provider networks, insurers are able to shift costs onto patients in the form of out-of-network charges. Of additional concern, the bill allows the Department of Insurance to unilaterally determine what health plans pay for out-of-network services, further incentivizing health plans to not have adequate provider networks.

In Pennsylvania, the Department of Insurance is seeking pre-introduction input on proposed legislation to limit balance billing by out-of-network physicians and establish an "independent dispute resolution process" to determine payment that would be operated by the Department. (See proposed bill) Specifically, the bill provides that when "a covered person receives a health care service covered by this act from a facility-based practitioner or affiliated provider, the provider may not hold the covered person financially responsible for any amount in excess of any cost-sharing amounts that would have been imposed if such health care service had been rendered by an in-network provider."

Comments on the legislative proposal will be accepted by the Department at until February 29, 2016. All comments will be publicly posted on the Department's website. CAP and the Pennsylvania Association of Pathologist (PAP) will be submitting formal comments.

In Massachusetts, legislation (HB 3931) entitled the Massachusetts Fair Health Care Pricing Act would prohibit balance billing of the patient on out of network charges, and provides that "every health care provider that does not agree to participate in a carrier's network must accept a rate equal to the carrier-specific average relative price for any covered out-of- network charges." In New Jersey, legislation to limit balance billing was defeated in Committee last year but expected to return in the 2016 session.

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In 2016, a total of 209,000 physicians will be penalized for failing to demonstrate meaningful use of their electronic health records (EHRs), according to the Centers for Medicare & Medicaid Services (CMS). However, as a result of CAP advocacy, pathologists are not among those being penalized. In 2015, the meaningful use penalty reduced Medicare payment by 1%; for this year, payment will be reduced by 2%.

The CAP has long advocated for a meaningful use exemption for pathologists, noting that they use laboratory information systems, not EHRs, and do not interact directly with patients.

Pathologists, along with anesthesiologists and radiologists, will receive automatic hardship exceptions based on their primary specialty as listed in the Provider Enrollment Chain and Ownership System (PECOS) six months prior to the first day of the year in which the payment adjustment would otherwise apply. Thus, pathologists do not need to apply for the hardship exception.

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In 2016, the CAP anticipates several federal actions that will affect reimbursement for pathology and laboratory services and the regulation of laboratories. When these regulatory actions occur, the CAP will provide breaking news alerts for members through STATLINE and additional analysis during live webinar events.

The regulations we are watching include:

  • New Clinical Laboratory Payment System. The Centers for Medicare & Medicaid Services (CMS) is expected to finalize a regulation that revamps the Medicare Clinical Laboratory Fee Schedule (CLFS) as mandated by the Protecting Access to Medicare Act (PAMA) and subjects laboratories to new mandates for collecting and submitting private payer data. The data would be used to calculate Medicare reimbursements for clinical laboratory services beginning in 2017. CMS issued the proposed regulations on September 25, in which it delayed the initial collection period deadline for private payer rates until March 31, 2016. The CAP submitted its formal comments in a November 24 comment letter. In its comments, the CAP expressed concern about the limited scope of the entities required to submit data and on which market rates, as well as the reporting requirements overall. In a recent development, Sens. Orrin Hatch (R-UT) and Ron Wyden (D-OR) are urging the CMS to establish a new method of paying for laboratory services that would increase payment rates for lab tests compared to the CMS's proposed approach. They are also asking the agency to give labs more time to report commercial payer rates. Hatch and Wyden are joining other lawmakers who have been pressuring the CMS to change its proposal on the new payment system for clinical laboratory tests.
  • FDA Guidance on Lab-Developed Tests. The Food and Drug Administration (FDA) appears to be moving closer to finalizing guidance on its oversight of lab-developed tests (LDTs). Under its initial proposal, released in October 2014, the FDA would continue enforcement discretion for certain low-risk LDTs, traditional LDTs, LDTs used for rare diseases, and LDTs for unmet needs. It also would implement a risk-based, phased-in approach for oversight of high-risk and moderate-risk LDTs. The CAP has advocated for a different approach, put forth in a legislative proposal, which would allow for continued test innovation and would not overburden laboratories.
    Given the current stalemate in Congress and lack of consensus on a LDT legislative proposal, the FDA is poised to release its LDT oversight guidance early in 2016. Senator Lamar Alexander, Chair of the Senate Committee on Health, Education, Labor, and Pension (HELP), indicated his intention to block the final guidance with a rarely used legislative procedure that would need to pass both the House and Senate. However, even if Congress is successful, it most likely would receive a veto from the President allowing the guidance to move forward. The House Energy & Commerce Committee (E&C) has also released a discussion draft of LDTs that gives oversight to the FDA for all LDTs. The CAP and various stakeholders have raised serious concerns with the E&C proposal, and passage does not seem probable prior to the release of the FDA final guidance.
    The College continues to engage with the FDA, the Congress, and other stakeholders on behalf of its legislative proposal, which has been endorsed by the Association of Pathology Chairs (STATLINE October 20, 2015). The major elements of the CAP's framework are:
    • A tiered, risk-based regulation that would focus FDA oversight to the tests that currently have the least transparency and highest potential risk to patients.
    • Allowance for evaluation of patient risk based on a laboratory's claims for the test and the potential for harm to patients of an incorrect or misinterpreted test.
    • Provision for achievable and targeted FDA oversight of high-risk LDTs as we define these categories in our proposal.
    • Provision for assurance of both analytic and clinical validity of laboratory tests.
    • Requirement for notification by laboratories to the Secretary of Health and Human Services (HHS) of each LDT in use since 2003.
    • Allowance for continued CMS oversight of laboratory quality under Clinical Laboratory Improvement Amendments (CLIA) for moderate- and low-risk LDTs as we define these categories in our proposal.
    • Definition of a regulatory process for modified LDTs with significant modifications to report high-risk tests to the FDA and for moderate- or low-risk to the Centers for Medicare & Medicaid Services (CMS).
    • Classification of LDTs for rare diseases, unmet diseases, and traditional LDTs as low-risk tests.
    • Requirement for adverse event reporting by laboratories to the secretary of HHS or deemed accrediting agencies.
    • Promotion of transparency by making test information publicly available.
    • Encouragement of coordination between the FDA and the CMS to avoid duplicative or unduly burdensome requirements on laboratories.
  • Proposed Regulations Implementing Merit-based Incentive Payment System and Alternative Payment Models for Physicians Anticipated Spring/Summer 2016. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repealed the flawed sustainable growth rate (SGR) system used to update physician fees and replaces the current quality programs with a new program—the "Merit-based Incentive Payment System” or MIPS. MIPS will combine the current programs, the Physician Quality Reporting System (PQRS), Meaningful Use (MU), and Value-Based Payment Modifier (VBM) along with a new category of activities, Clinical Practice Improvement Activities to create a single quality score. The MIPS bonuses and incentives will increase yearly beginning at +/- 4% of Medicare Part B payments in 2019 to +/- 9% in 2022; a range of $55 to $133 million at risk. CMS is currently seeking guidance from stakeholders and CAP is directly engaged with the agency on how to implement the MIPS.
    While MACRA offered MIPS as the default payment model, the law also allows physicians who choose to participate in an eligible Alternative Payment Model (APM) to be excluded from MIPS payment adjustments (positive or negative) and rewarded an annual bonus of 5% for years 2019 through 2024. In 2026 and beyond, the annual bonus drops to 0.75%. Specifics on what an eligible APM is and other details on which providers will base their decisions whether to pursue APMs as a pathway are not yet available, but will also be promulgated under the anticipated MACRA proposed rule. The CAP has engaged with CMS on formal requests for information on implementing the APM portion of MACRA. The CAP anticipates a proposed rule implementing the MIPS and APM provisions of MACRA in spring or early summer of 2016. CAP will continue to engage with the agency to impact the final interpretation of this law.
  • Proposed 2017 Medicare Physician Fee Schedule. The proposal is expected out around July 1. The CAP will review payment policy changes and provide an impact table showing how the proposed rule affects Medicare reimbursement for pathology services. A final rule is expected out in early November with implementation of new rates and policy changes.

Each month, STATLINE will feature one of the many CAP members who have been champions for pathology in Washington and at the state level through our grassroots and PAC programs. If you would like to get involved, you can join PathNET, contribute to PathPAC, join your state pathology society, or register for the 2016 CAP Policy Meeting.

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Name: Guillermo Martinez-Torres, MD, FCAP
Position: President, Medical Staff, Columbia St. Marys - Milwaukee Campus; Chair, Pathology and Laboratory Services, Columbia St. Marys, Milwaukee, WI

Why is advocacy important to you?

Advocacy is important because no one else in the house of medicine can speak for pathology. Other specialties advocate for those things that are important to them, which are not always in our best interest. It is also amazing how little is known on Capitol Hill about what we do every day. Being an advocate gives me the opportunity to develop a relationship with those who make decisions that impact our specialty. There is nothing more satisfying than becoming the “go to” person for a congressional office when it comes to pathology and/or laboratory issues.

Do you have a favorite memory or experience that stands out in your advocacy work?

I remember advocating for pathology to be excluded from Meaningful Use penalties, since we have little face-to-face contact with patients. At that time I took some slides to the congressional offices on Capitol Hill, and during my time with them, I introduced them to my "patients." I made a point that it was really hard to take a blood pressure from these patients and to counsel them about smoking cessation and/or weight loss. I believe that drove a point with them that would [have] otherwise been difficult to communicate effectively.

Another favorite memory has to do with a visit with Congressman Jim Sensenbrenner. I remember speaking with him about pathology, what we do, why we matter, and how important we are to patient care. After a 15-plus minute impassioned speech, he looked at me and said, "Doctor, I am very familiar with pathology…my neighbor and best friend is a pathologist. I probably know more about pathology than any other medical specialty." He [was] probably the only member of Congress who [knew] who we are and what we do.

What do you find most rewarding and/or most challenging about being an advocate for pathology?

The most rewarding aspect is to be representing our specialty in a way that no one else can do. We are the ones who have a vested interest in the future of pathology and laboratory medicine. We can choose to sit by, let things happen to our specialty and then complain about them; or we can identify those changes that are potentially detrimental to us, become a vocal advocate for ourselves, and try to stop and/or mitigate the potential damage to us.

The most challenging aspect is that sometime before or after your meeting, that congressional office will be meeting with other specialties, which may be advocating for something which is 180 degrees different than what you are advocating for. That is why it is particularly important to be there representing [our] position. If we are not there, the lawmakers will only hear the other arguments and make decisions that we will not be pleased with.

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Registration is now open for you to join your colleagues at the 2016 CAP Policy Meeting May 2-4 in Washington, DC. The annual event is the pathology specialty's opportunity to focus on the federal issues most important to pathologists now and in the future.

The 2016 Policy Meeting will feature guest speakers from Washington and pathology leaders from across the country. On May 4, pathologists will visit with their elected officials during the CAP's annual Hill Day. Meeting with your representative or senator is your chance to discuss the issues affecting pathology and the patients you care for every day.

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