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September 22, 2015

In This Issue:

The Institute of Medicine (IOM) recommended greater pathologist integration into the health care team and additional payment mechanisms for diagnostic physicians, including pathologists, in a pioneering study that investigated ways to reduce diagnostic errors in the US health care system.

The IOM published the study, "Improving Diagnosis in Health Care," on September 22. The CAP was one of the sponsors of the study examining the issue of diagnostic errors, which an IOM committee has been evaluating for nearly two years. The CAP supports efforts to prevent errors in all stages of the testing process and works to ensure quality tests for patients.

"As the largest and most experienced organization in the world promoting quality in medical laboratory performance, including our development and leadership in laboratory improvement programs such as proficiency testing and accreditation for more than 65 years, the CAP is pleased to have served as a sponsor and funder of the IOM study, 'Improving Diagnosis in Health Care,'" said CAP President Gene N. Herbek, MD, FCAP. "The CAP strongly supports the IOM study's recommendations and findings as they relate to pathology and laboratory medicine. Building on the previous studies in the IOM's Health Care Quality Initiative, including 'To Err is Human' and 'Crossing the Quality Chasm,' we are confident 'Improving Diagnosis in Health Care' will contribute to the advancement of efforts to reduce the potential for error in medicine."

The IOM study committee found that: "Pathologists and radiologists are diagnosticians who provide information and consultations that are critical to diagnosing patients' health problems, such as advising on the appropriate diagnostic testing for a particular patient and conveying the implications of the test results to treating health care professionals. Despite the important roles that laboratory medicine, anatomic pathology, and medical imaging play in a diagnosis, pathologists and radiologists have sometimes been treated as ancillary or support services." The CAP welcomed the IOM's recommendation that health care organizations should facilitate and support collaboration among pathologists, other diagnosticians, and treating health care professionals, Dr. Herbek said.

The IOM also recommended that "CMS and other payers should: create CPT codes and provide coverage for additional evaluation and management activities not currently coded or covered, including time spent by pathologists, radiologists, and other clinicians in advising ordering clinicians on the selection, use, and interpretation of diagnostic testing for specific patients." This recommendation, including the IOM's recognition of the clinical value of pathologists working in collaboration with other physicians, fully aligns with the CAP's longstanding public policy agenda advocating for greater pathologist clinical integration to enhance patient safety, elevate quality, and reduce the risk of error, Dr. Herbek said.

The IOM committee stated "laboratories that conduct diagnostic testing are some of the most regulated and inspected areas in health care." Beyond regulation, clinical quality and the avoidance of error requires a team based approach to diagnosis that the report encourages and that the CAP wholeheartedly supports.

The study committee also concluded that it is appropriate to have a limited number of highly qualified health care systems participate in conducting routine postmortem exams that produce research-quality information about the incidence and nature of diagnostic errors. The committee called on the Department of Health and Human Services (HHS) to design such a system and provide funding.

"We fully concur with the IOM's recognition of the value of the autopsy as a quality assurance measure, which is in keeping with the CAP's public policy position," Dr. Herbek said. "Further, we agree with their recommendation that HHS provide funding for a designated subset of health care systems to conduct routine post mortem examinations on a representative sample of patient deaths."

Two CAP members, Michael B. Cohen, MD, FCAP, and Michael Laposata, MD, PhD, FCAP, served on the 21-member IOM study committee. On October 5 at CAP ’15, Dr. Cohen and Emily E. Volk, MD, FCAP, will lead a presentation on the study. Bibb Allen, MD, FACR, chairman of the American College of Radiology (ACR) Board of Chancellors, also will present during the session scheduled to start at 5:30 PM ET on October 5.

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Citing significant financial burdens and administrative duplication, a California auditor recommended repealing statutes mandating that laboratories in the state be licensed by the California Department of Public Health Laboratory Field Services (Laboratory Services) office.

The state auditor also faulted the Laboratory Services for not acting on a 2009 state law, supported by the CAP and California Society of Pathologists (CSP), requiring Laboratory Services to begin accepting and recognizing other accreditation organizations. Laboratory Services has accepted several applications, including from the CAP's Laboratory Accreditation Program, but it has failed to make determinations within the specified timeframe of six months. A determination on the CAP's application is still pending.

"In fact, we believe Laboratory Services' oversight of lab facilities largely duplicates federal oversight with no meaningful benefit to consumers," California State Auditor Elaine M. Howle stated in a September 10 audit report . "State law and CLIA are nearly equivalent in their mandates, and the oversight required is redundant: Both Laboratory Services and CMS collect fees from labs to perform inspections, monitor proficiency testing, investigate complaints, and issue sanctions. The Legislature should repeal state law requiring that lab facilities be licensed by the State, thus reducing the regulatory and financial burden on lab facilities while continuing to enforce the State’s requirements for laboratory personnel."

The auditor states Laboratory Services has not fully implemented many of the recommendations from its September 2008 audit report. The audit also found that Laboratory Services made an unauthorized fee increase in January 2014 that has resulted in laboratories overpaying it more than $1 million in fees, and since 2008 it has collected more than $12 million in laboratory fees that it has not spent. Laboratory Services has missed opportunities to more effectively use its limited personnel by partnering with other organizations that could help it meet its workload obligations under state law.

The 2009 state law requires the formal recognition of laboratory accreditation as a cost savings measure to obviate routine state inspections of accredited laboratories. The CAP and CSP strongly supported the statutory deadline of January 2011 for the department to begin to accept applications of laboratory accreditation organizations for formal recognition, provided the standards of such organizations are "equal to or more stringent than, state requirements for licensure and registration."

Under the law, laboratories accredited by approved accreditation organizations will not be subject to the routine state inspections, provided the laboratory agrees to allow the state to have access to any accreditation record the department may require, including notification of every violation of condition-level requirements. In addition, the department continues to have full authority to conduct complaint investigations, sample validation inspections, and to require submission of proficiency testing results to ensure compliance with state standards.

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The CAP has become aware of a new Humana policy denying reimbursement for the technical component (TC) of pathologist services for hospital patients.

The policy, published in June 2015, affects Humana's Medicare Advantage and commercial insurance products. When a facility is expected to bill for the TC, Humana will only make payment for a charge submitted by the associated hospital when the TC of a pathology service is provided to a hospital patient. Humana’s policy did not indicate an implementation date but did convey how it will adjudicate claims for pathology services provided to hospital patients:

  • TC Only Charge: Humana will deny a charge for only the TC, indicated by modifier TC, to provider liability, when billed by a pathologist or independent laboratory. If the hospital has not yet submitted a charge for the TC of the service, the hospital may submit for consideration an initial claim or replacement claim, as appropriate, that includes a charge for the service.
  • Global Charge: Humana will allow reimbursement for only the professional component for a charge submitted globally, by a pathologist or independent laboratory. If the hospital has not yet submitted a charge for the TC of the service, the hospital may submit for consideration an initial claim or replacement claim, as appropriate, that includes a charge for the service.

Hospital patients are defined as individuals registered as outpatients or inpatients of a hospital.

The CAP has reached out to Humana to better understand the policy as on its face it is of significant concern. The CAP will publish more news on this issue in STATLINE as additional information becomes available.

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The CAP joined the American Medical Association (AMA) and other organized physician groups to urge the Obama administration to halt implementation of the Electronic Health Record Meaningful Use (EHR MU) program's Stage 3 criteria and further reevaluate the incentive program.

The physician groups sent Health and Human Services Secretary Sylvia Burwell and Management and Budget Direct Shaun Donovan letters on September 17 calling on the administration to not finalize tougher objectives under Stage 3 meaningful use. "If the administration finalizes the proposed MU Stage 3 regulation now, vendors will create software that will lock-in problematic technology, which physicians and patients will be living with for years to come," the letter stated. "The proposed MU Stage 3 regulation exacerbates problematic policies of MU Stage 2 by continuing to 'count' physicians' compliance with one-size-fits-all objectives rather than focusing on the clinical activities that should support differences in medical practices and patient care."

On March 20, the CMS released its proposed Stage 3 rule for the Meaningful Use program and the Office of the National Coordinator for Health IT (ONC) released their rule for the next version of certified EHRs. Stage 3 would be the last stage of meaningful use. In the Stage 3 rule, the CMS proposes to remove the 90-day reporting period for Medicare newly eligible professionals, requiring a full calendar year reporting period after 2015. Measures in the Stage 1 and Stage 2 final rules that included paper-based workflows, chart abstraction, or other manual actions also would be removed or transitioned to an electronic format utilizing EHR functionality for Stage 3. Furthermore, to better align quality reporting programs, the CMS proposes to address clinical quality measure reporting requirements for 2017 and subsequent years in the Medicare Physician Fee Schedule.

The program carries Medicare payment penalties for physicians who do not adopt and meaningfully use EHRs. As a result of CAP advocacy, pathologists have received a hardship exception from meaningful use penalties for 2015 and 2016. Federal law allows the CMS to provide up to five years of hardship relief, and the CAP strongly encourages that the CMS to grant this relief for the full five years with continuation of the exception for pathologists beyond 2016. In most cases, pathologists are unable to meet the program's criteria.

Pathologists will receive automatic hardship exceptions in 2015 and 2016. The hardship exception stops Meaningful Use penalties that would lower Medicare payments by 1% in 2015 and 2% in 2016.

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