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The CAP actively engages with the Centers for Medicare & Medicaid Services (CMS) to address concerns associated with pathology services identified through the Misvalued Code Initiative as potentially overvalued. Further, the College continues work to mitigate cuts to pathology payments.

In the proposed 2016 Medicare Physician Fee Schedule, the CMS stated several specialties, including pathology and independent laboratories, will experience significant increases in payment resulting from the Misvalued Code Initiative, including the establishment of relative value units (RVUs) for new and revised codes. The CMS proposed to update payment rates and accept the majority of the CAP's and the American Medical Association (AMA) Specialty Society's Relative Value Update Committee's (RUC's) practice expense (PE) recommendations, but the CAP will continue to be engaged with the Medicare agency to address outstanding concerns on the recommendations.

As detailed in the CAP's STATLINE Alert on July 8, the CMS' estimated impact on specialties based on the changes included in the proposed rule would result in an overall increase of 8% for pathology services. This estimate would impact overall payment to pathologists by a 4% increase based on the changes to the work relative value units used to calculate the majority of the professional component of pathology services as well global payment. The impact on changes to the practice expense used to calculate the majority of the technical component as well as global payment resulted in a 4% increase in pathology payment.

During the CAP's July 14 webinar to review the proposed 2016 Medicare rule, expert presenters stressed that the projected impact to 2016 pathology payment does not include the value the CMS will assign to G0416 (a bundled code for pathology review of prostate biopsies) and any additional changes CMS will make in the 2016 final rule. In short, the 2016 payment might not be the 8% increase the CMS projects in the fee schedule. It can be lower in the final fee schedule.

The payment impact for an individual physician could vary from the average and would depend on the mix of services the physician furnishes. The average change in total revenues would be less than the impact shown on the CMS’ impact tables because physicians furnish services to both Medicare and non-Medicare patients and specialties may receive substantial Medicare revenues for services that are not paid under the physician fee schedule. For instance, independent laboratories receive approximately 83% of their Medicare revenues from clinical laboratory services that are paid under the Clinical Laboratory Fee Schedule (CLFS).

Please refer to the CAP code level impact table to better understand the proposed fee schedule affect on an individual or pathology practice.

Proposed Increases to IHC, FISH

The Medicare agency proposed to support increases sought by the CAP for pathology services, including codes for immunohistochemistry and in situ hybridization. A few of these increases in its proposed 2016 regulation were:

  • 88341 – Immunohistochemistry add-on code, the professional and technical component payment increased by 28% and 38% respectively.
  • 88342 – Immunohistochemistry initial single antibody stain, the technical component and global payment increased 31% and 20% respectively.
  • 88344 – Immunohistochemistry multiplex code, the technical component and global payment increased 75% and 50% respectively.
  • 88369 – Morphometric analysis, in situ hybridization, manual, add-on code, the professional and technical component payment increased by 28% and 59% respectfully.
  • 88377 – Morphometric analysis, in situ hybridization, manual, multiplex code, the technical component and global payment increased 136% and 95% respectively.

Flowcytometry Cuts

The proposed 2016 fee schedule includes cuts to flowcytometry codes 88184 and 88185. The cuts stem from the refinement of direct practice expense inputs that were made and now are being reflected in the practice expense relative values. The CAP will be engaged with the CMS to address any issues with the agency's calculations of the codes.

Proposed Changes to Practice Expense Inputs

The CMS has proposed standardizing pathologists’ practice expense (PE) clinical labor tasks and time. The CMS developed a listing of clinical labor tasks and standard times they believe accurately reflect the typical time and tasks of furnishing pathology services. They are seeking comment on these tasks and standardized times. The CAP will work with and assist the agency on this proposal.

The CMS also expressed concern that the direct practice expense inputs included in many pathology services may not reflect the typical resource costs involved in furnishing the typical service. The CMS noted that that since laboratories of various sizes furnish pathology tests, depending on the test, a large and small laboratories are likely to furnish a test to a Medicare beneficiary at different costs per test. The CMS is seeking information about the equipment and supply inputs used in the typical case for particular pathology services. The CAP will work with and assist the agency on this proposal.

The CMS continues to believe that there are various possibilities for leveraging the use of available hospital cost data in the PE RVU methodology to ensure that the relative costs for physician fee schedule services are developed using data that is auditable and comprehensively and regularly updated. The CAP continues to disagree with the agency’s understanding of the substantial differences in the costing methodologies of the physician fee schedule and hospital cost data.

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Legislation (Senate Bill 110) to repeal the dermatology exemption to the Ohio direct billing law for anatomic pathology was signed into law by Gov. John Kasich on July 16. The legislation was supported by the CAP and the Ohio Society of Pathologists (OSP).

The exemption in the law, prior to the repeal, allowed dermatologists to be client billed by the laboratory or pathologist providing anatomic pathology services, provided the dermatologist disclosed the identity of the laboratory and the amount charged for the service. This exemption will be effectively repealed in October, 90 days following the governor's signature.

The Ohio Dermatological Association (ODA) came to the conclusion that the exemption was not in the best interest of dermatology and agreed to change in communication with the OSP in 2014. The ODA action was praised by the OSP, noting in communication with legislative leadership: "We strongly agree with them and believe their current interest in repealing the law is commendably appropriate in protection of our mutual patient population." The bill passed the legislature without controversy or opposition.

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The CAP recommended national pricing for new and reconsidered Molecular Pathology Tier 1 and genomic sequencing procedure CPT codes during Medicare's 2016 Clinical Laboratory Fee Schedule (CLFS) meeting on July 16.

For 2016, the CAP urges the CMS to use the annual public meeting process, and subsequent comment period to work with molecular stakeholders and providers to develop national pricing for new and reconsidered Molecular Pathology Tier 1 and genomic sequencing procedure CPT codes, CAP CPT Advisor Michael D. McEachin, MD, FCAP, said during the July 16 meeting. Read the CAP's 2016 CLFS recommendations. The CAP also welcomes further dialogue with CMS officials regarding the resources necessary to perform, and the clinical uses of, the molecular pathology and genomic sequencing procedures provided to Medicare and/or Medicaid beneficiaries.

In December 2014, the CMS issued the final payment determinations for new codes for the 2015 Clinical Laboratory Fee Schedule (CLFS). Following careful review of the final determinations, the CAP requested reconsideration of the basis for payment of the new Tier 1 Molecular Pathology CPT codes and the new Genomic Sequencing Procedures (GSP) CPT codes. The CAP stated it believes additional stakeholder input through the annual CLFS public meeting process allows additional clarification regarding typical resources required to perform and the clinical uses for these services, as well as the manner in which the technology typically associated with these services compares and/or contrasts to the typical technology associated with existing services paid on the CLFS. The CMS included the 2015 GSP and Tier 1 molecular pathology codes on its list of codes being reconsidered for 2016.

The CAP remains concerned with regard to transparency issues associated with the gapfill process for the molecular pathology and genomic sequencing codes. As a result, the CAP advocated for the crosswalk methodology to be used to determine comparable resources associated with the new and revised genomic sequencing procedure codes and molecular pathology CPT codes to support implementation of these new codes by Medicare and other payers for the 2016 calendar year.

Many services within the molecular pathology subsection and genomic sequencing procedure subsection of CPT require similar resources and use comparable technologies which are directly applicable for crosswalk valuation. As private payers often use the Medicare clinical laboratory fee schedule national limitation amounts as a factor in determining payment for services provided to private payer beneficiaries, the CAP believes it is important for the CMS to use the transparent nature of the annual public meeting process to discuss and make preliminary payment determinations using crosswalk methodology for new codes to facilitate patient understanding and access to laboratory tests and technologies adopted for clinical use.

Contact Your MAC for NGS Denials

If you are performing next generation sequencing services and receiving denials for them from Medicare as not covered, we encourage you to contact your Medicare Administrative Contractor (MAC) medical director to pursue coverage for these services. This effort is likely to require evidence that will support Medicare coverage.

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On July 15, the largest private national insurer UnitedHealthcare published new frequently asked questions (FAQs) on its laboratory management pilot program in Florida.

The CAP continues to oppose the pilot program because it negatively affects patient access to services, delays results, and creates inconsistencies with current clinical practice, professional judgment, and laboratory operations. UnitedHealthcare implemented the pilot on April 15 after delayed enforcement of the program's requirements following requests by the CAP, the Florida Society of pathologists (FSP), and other medical associations representing ordering physicians. UnitedHealthcare may deny laboratories payment for services when ordering physicians do not comply with the pilot's requirements.

The CAP engaged with UnitedHealthcare and expressed pathologists' deep concerns with the pilot, which requires use of Beacon Laboratory Benefit Solutions (BeaconLBS). BeaconLBS is a subsidiary of LabCorp. The pilot program affects 79 laboratory services ordered by Florida network providers for patients covered by most fully insured UnitedHealthcare commercial members in the state.

The UnitedHealthcare FAQs contain answers to 29 clarifying questions regarding the pilot. Read FAQs on the insurer's website. The FAQs provide information on registration, decision support tests, physician decision support, Laboratories of Choice, advance notification and prior authorization, claims submission, cervical cancer screening, and pathology services.

Specifically, in question 15, the FAQs provide information on BeaconLBS’ network of preferred in-network laboratories called Laboratories of Choice. Question 17 asks: "Do I have to order laboratory tests from a Laboratory of Choice?" Answer: "No. Physician Decision Support identifies which laboratories are qualified to perform laboratory tests ordered, including pathology services. Laboratories of Choice will be listed on the first screen of the Physician Decision Support ordering page. To choose another UnitedHealthcare network laboratory, please select the search button next to the Laboratories of Choice to view a dropdown box with a complete list of in-network laboratories qualified to perform the test." The College has advocated with UnitedHealthcare to automate this process for network laboratories that are not Laboratories of Choice.

In the pathology services section, question 28 asks: "Will UnitedHealthcare reimburse providers for secondary pathology review?" Answer: "To determine reimbursement policies, UnitedHealthcare applies industry standards from third parties including the American Medical Association (AMA) and CMS. You can view UnitedHealthcare Commercial reimbursement policies on > Tools & Resources > Policies, Protocols and Guides > Reimbursement Policies – Commercial. Please note that we do not provide examples of billing practices, but we accept all standards of billing highlighted under AMA standards and CMS requirements."

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The archived recording of the CAP's July 14 webinar "Understanding the 2016 Medicare Physician Fee Schedule Proposed Rule" is available to view. Throughout this hour-long panel discussion, CAP experts explain the changes proposed by the CMS regarding the 2016 fee schedule.

View the archived webinar and download the slides to this presentation.

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