Read the Latest Issue of STATLINE

Significant changes to key provisions are needed to the proposed regulation that revamps the Medicare clinical laboratory fee schedule (CLFS) and subjects laboratories to new mandates in 2016, the CAP stated in a November 24 comment letter to the Centers for Medicare & Medicaid Services (CMS).

The proposed regulation, released September 25, implements the CLFS provisions of the 2014 Protecting Access to Medicare Act (PAMA). The act requires applicable laboratories to submit data on private payer payments for laboratory services to the CMS beginning in 2016. The data collected would be used to set rates for CLFS reimbursements in 2017. Under the agency's proposal, organizations that receive more than 50% of their Medicare revenues from the clinical laboratory and physician fee schedule in a data collection period are subject to reporting/data submission requirements. In addition, the agency proposed a low expenditure threshold so that laboratories that are paid less than $50,000 per year on the CLFS are excluded from reporting.

Data Collection and Reporting by Laboratories

The CAP in its November 24 comments to the CMS focused on reporting, coding, and coverage under the proposed rule calling for significant changes to major elements of the proposal. The CAP objected to the limited scope of entities required to submit data indicating it must be broadened to improve the accuracy of private payer and market rates. Based on the proposed definition of applicable laboratories, hospitals and virtually all physician office laboratories will be excluded. The CAP stated that with these key categories of laboratories not included the result will be an inaccurate and understated weighted median upon which CLFS rates will be based beginning in 2016.

Read the CAP's comment letter.

The CMS also has provided no specifics on what must be reported other than test, volume, and private payer rates. In the proposed rule, the CMS indicates it will provide further detail in subregulatory guidance, but has yet to do so. The CAP has stressed the need for timely and clear guidance on the specifics of applicable information to be reported that reflects private payer contracting and claims/adjustment processes.

Despite not having provided specifics on reporting requirements, the CMS has proposed an initial data collection period from July 1 to December 31, 2015 with reporting by applicable laboratories required no later than March 31, 2016. The CAP called for an extension of both the data submission deadline and data collection period.

Proposed Coding Changes

Under the proposed rule, the CMS would create and assign temporary G-codes (Healthcare Common Procedure Coding System (HCPCS) Level II) for certain new tests. The CMS may choose to extend the temporary code beyond the proposed two-year period if a permanent HCPCS code has not yet been assigned and Medicare continues to have a need to pay for the test.

The CAP recommended the CMS establish a formal temporary code sunset list and replace temporary codes with permanent CPT (HCPCS Level I) codes at the conclusion of the two-year period. By this time, laboratories that received a temporary HCPCS Level II code(s) should have applied for a permanent successor CPT code should a coding need still exist to capture services provided to Medicare beneficiaries. The CAP also stresses the transparency and integrity of the coding process as critical to the success of PAMA implementation and ongoing operation.

The CAP emphasized the importance of the use of Health Insurance Portability and Accountability Act (HIPAA)-designated code sets, identifiers, and modifiers particularly in assigning codes for new tests. The CAP indicates CPT Code Set (HCPCS Level I) should be used when possible to capture a single test with a single code regardless of payer, and to ensure that payment rates that are established for the CLFS that truly represent private payer market rates.

CAP Advocates for LCD Reform

The CMS has discretionary authority to consolidate coverage and/or claims payment for clinical laboratory tests to between one and four Medicare Administrative Contractors (MACs). In the proposed regulation, the CMS has chosen not to exercise this authority, but has asked for comment on the disadvantages and advantages of consolidation.

In response, the CAP reaffirmed its position in favor of local coverage determination (LCD) reform and urged the CMS not to pursue MAC consolidation of coverage policies and/or claims process for clinical laboratory tests.

Back to the top

While CMS will close its comment period on the proposed PAMA regulations after November 24, the agency plans to move forward in 2016 to implement the new regulations affecting laboratory operations and future CLFS Medicare payments. The PAMA regulations 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.

The CAP will host an important webinar on the PAMA regulation December 17 at 2 PM (ET). During this 60-minute webinar presentation, pathologists and laboratory managers will receive important information about the proposed PAMA regulation including the CAP's concerns and recommendations to the CMS. Information covered during the webinar will include:

  • New Reporting Requirements for Laboratories
  • Coding Implications for CLFS services
  • Medicare Coverage and Claims Processing Consolidation Feedback

The webinar will be held December 17 at 2PM (ET). Register for this important program today.

Back to the top

The National Association of Insurance Commissioners (NAIC) finalized changes to its Managed Care Plan Network Adequacy Model Act despite strong concerns and objections from the CAP that the new model legislation failed to ensure network adequacy of hospital-based physician services, including pathology.

The CAP will continue to strongly advocate for regulatory requirements that establish adequate network coverage. The CAP calls for health payers to be financially responsible for inadequate networks to the extent of paying out-of-network pathologists all billed charges and at no greater out-of-pocket expense to the patient as would be the case for an in-network provider of the service.

The CAP believes the model act will not effectively ensure that health plans approved by the state contain sufficient numbers of hospital-based providers so that patients at in-network hospitals and facilities have reasonable access to in-network physicians at these facilities, CAP President Richard C. Friedberg, MD, PhD, FCAP said in a statement. "The final model bill, by rejecting this requirement and by including improper limitations on billing by out-of-network providers, is encouraging insurers to shrink and narrow their networks in ways that adversely affect the delivery of health care."

The NAIC finalized the model act during a November 21 weekend meeting in Washington, DC. The model act would allow any patient to decline to pay an out-of-network physician bill in excess of $500, excluding deductibles, co-payments and coinsurance, from an in-network facility provider and prohibit balance billing of the patient. Moreover, the model act recommends that health plan payment to out-of-network physicians be tied to an undetermined percent of Medicare or, alternatively, the in-network payment rate, whichever is greater. Health carrier arbitration with the provider would follow if a claim continues to be disputed. The model act can be used as the basis of legislation in states around the country.

Revisions to the model legislation were under development for almost two years in a stakeholder process which included the American Medical Association (AMA), CAP, and other hospital-based physician organizations. However, many of the recommendations made to the NAIC work group from the CAP and other hospital based physician groups were rejected by the regulators, including a specific requirement to ensure that regulators assess health plan network adequacy for hospital-based physicians in order to ensure that patients can avail in-network services. The regulators workgroup claimed that the provision was unnecessary and by unanimous vote rejected the proposal. Regulators, over the objection of payers, did vote to include a CAP backed provision in the model bill to require health plans to submit to the state their plan to monitor their enrollee access to hospital based physician services, including pathologists.

At the AMA Interim Meeting November 14-17, the CAP sponsored a resolution, adopted by the AMA House of Delegates to expressly direct that "health plans should be required to document to regulators that they have met requisite standards of network adequacy for hospital-based physician specialties (i.e. radiology, pathology, emergency medicine, anesthesiologists and hospitalists) at in-network facilities and ensure access to in-network facilities is both timely and geographically accessible." The resolution also created new policy to support health insurers paying out-of-network physicians fairly and equitably for emergency and out-of-network bills in a hospital. "Any legislation which addresses this issue should assure that insurer payment for such care be based upon a number of factors, including the physicians' usual charge, the usual and customary charge for such service, the circumstances of the care and the expertise of the particular physician," the resolution states.

As the CAP advocates on this issue, more news will be published in future editions of STATLINE.

Back to the top

The New York State Department of Health (DOH) has established an eight-month timeline to develop recommendations on a prohibition blocking patient-pathologist discussions. The purpose of the delay, asserted by the DOH, is intended to allow further stakeholder consideration, despite requests from four patient advocacy groups that are supporting the pathologist position on immediate repeal of the prohibition. The four patient groups that have commented to the DOH are the National Kidney Foundation, the Long Island Breast Cancer Coalition, the New York Prostate Cancer Coalition and the NY Center for Medical Consumers.

Since a 2014 federal regulation that ensured patients have direct access to their laboratory test results, the CAP and New York State Society of Pathologists (NYSSPATH) have urged the Department of Health to remove the prohibition as New York is the only state to have any such restriction on pathologists. The CAP and New York pathologists have repeatedly called for the barrier on answering patient questions to be removed in order promote patient empowerment with health information.

The New York City Health and Hospitals Corporation has also requested that the prohibition be repealed. New York was one of several states who previously prohibited laboratories from sharing test results with patients until their regulations were federally voided. During a November meeting of the Department of Health Committee on Codes and Regulations, NYSSPATH President Mary Elizabeth Fowkes, MD, PhD, FCAP, noted several physician and patient advocacy groups support repealing the prohibition. Previously, health officials also have stated the prohibition was designed out of concern about financial kickbacks and improper business practices. But the state regulation’s effect still constrains pathologists’ medical practice while the new federal statute clearly grants patients access to their test results.

"We do not understand why changes to this regulation require a protracted, multifaceted stakeholder process when the change is clearly in the best interest of patient safety and care," Dr. Fowkes said.

The Department of Health is going to identify stakeholders, including pathologists, during November and December and then continue deliberations on the issue through the first half of 2016. The department will then develop its recommendations for the Committee on Codes and Regulations' consideration in July.

Watch the Department of Health committee meeting by selecting the November 19 meeting from the Department of Health archive. Discussion of this issue begins at the 23:00 mark in the video.

Back to the top

New York Gov. Andrew Cuomo vetoed the Equity in Laboratory Personnel Licensure bill, which would have secured parity provisions requiring out-of-state laboratories, licensed by the state, to meet similar standards for laboratory personnel located at in-state laboratories.

The CAP and NYSSPATH had urged Gov. Cuomo to sign the legislation into law. "Notably, in 2012, approximately 32% of laboratory work was exported out of state," wrote CAP President Richard C. Friedberg, MD, PhD, FCAP in a November 11 letter. "We think that the current law exacerbates this diversion of work and deters investment in New York laboratory resources."

"It is therefore necessary for the New York State Legislature to create equity in the law by applying personnel licensure requirements to all DOH licensed laboratories, serving New York State patients, whether located in the state or outside the state," said NYSSPATH President Mary Fowkes, MD, FCAP in a November 11 letter to Gov. Cuomo. The legislation “will also benefit patient care by increasing the regional and national workforce of clinical laboratory personnel eligible to work in New York State laboratories and encourage more investment in New York clinical laboratory technology and personnel.” The legislation also received the endorsement of the Medical Society State of New York.

This bill would have required that out-of-state laboratories licensed and regulated by New York State for the purpose of testing specimens from New York State residents, demonstrate that they meet standards which are substantially similar to the education department's educational requirements, or that they meet other standards established by the education department and department of public health.

"I fully support the need to maintain high standards for personnel in laboratories irrespective of their geographical location," Gov. Cuomo stated in his November 20 veto message. "But expanding such an out-of-state inspection framework to include reviews of staff credentials is a significant undertaking. It would require DOH staff to travel out-of-state to conduct reviews of educational credentials at hundreds of laboratories that test and process specimens from New York State residents. DOH staff would also be required to continually review the educational requirements of laboratory personnel in 49 other states to determine their comparability to New York State's requirements."

In 2004, the state Clinical Laboratory Technology Practice Act required people working in technical positions in laboratories licensed by the department of public health to obtain a professional license from the education department. The goal of the legislation was to ensure that the people tasked with performing the clinical laboratory tests that underlie most modem medical decisions were being held to the highest professional standards.

However, the law was interpreted by the New York Education Department, the agency that administers the laboratory personnel law, to only require the licensing of technical personnel working in New York State. While the department of health regulates laboratories that accept specimens from New York State regardless of location, the Education Department interpretation applied the licensure standards to only technical personnel working within the state. Thus, laboratories located in the state are subject to more regulation than out-of-state laboratories.

Back to the top

The CAP extended the deadline for stakeholders to provide comments on draft quality measures for pathologists through a short survey. Your comments are important as CAP leaders work to ensure pathologists can participate in Medicare value-based initiatives. The survey will remain open until December 4.

The CAP convened its Measures & Performance Assessment (M&PA) Subcommittee to assess opportunities for the development of evidence-based performance measures for pathologists. The CAP M&PA Subcommittee, which is part of the CAP Economic Affairs Committee, proposes these measures to promote the highest quality of care.

Back to the top

Due to the Thanksgiving holiday, STATLINE is taking a scheduled break the week of November 30. However, the CAP will send a STATLINE Special Report if important news breaks during the week. The next regular weekly edition will be on December 8.

Back to the top