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ePolicy News July 2013

Monday, July 1, 2013



Medicare Laboratory Fees Under Microscope … Again

The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services recently released a report claiming Medicare overpays for clinical laboratory services by 18 to 30 percent. The report, Comparing Lab Test Payment Rates: Medicare Could Achieve Substantial Savings, compares Medicare payment for clinical laboratory services to Medicaid and three Federal Employee Health Plans. To address these supposed “overpayments,” the report recommends cutting the clinical laboratory fee schedule (CLFS), imposing co-pays and deductibles on the CLFS, and instituting competitive bidding of clinical laboratory services.

The OIG study may have been influenced by a recent report by the Urban Institute. In March, the Institute, led by Robert Berenson, a former vice-chair of the Medicare Payment Advisory Commission, issued a report, Can Medicare be Preserved While Reducing the Deficit. The report states, “A number of health plan and provider representatives have suggested that Medicare … pays substantially more than do large commercial insurers” for laboratory services. The Institute is calling on the Centers for Medicare and Medicaid Services (CMS) to survey large insurers to assess the appropriateness of clinical lab services fees paid by Medicare and to adjust the CLFS payment rates if “they are either grossly excessive or insufficient.”

These reports raise troubling questions for clinical laboratories in light of the recent news that AETNA will soon cut its national clinical laboratory fee schedule to 45 to 50 percent of the Medicare CLFS. ASCP intends to raise concern about AETNA’s intentions shortly.

In response to the OIG recommendation to cut the CLFS, CMS stated it “is currently exploring whether it has authority under the current statute to revise payments for clinical diagnostic laboratory services consistent with the OIG’s recommendations.” The Agency was silent about its position on the OIG recommendations regarding competitive bidding, co-pays, and deductibles, noting such initiatives would require Congress to provide it with the authority to make such a change.

ASCP notes that CMS will soon release its annual Physician Fee Schedule (PFS) proposed rule, which often contains changes in agency policy about the CLFS. ASCP will closely analyze the proposed rule to assess its impact on the laboratory community and will be working with our coalition partners to develop a response to communicate our members’ concerns.




Quest, ASCP Working to Secure Funding for Workforce Development

Earlier this month, the U.S. House of Representatives approved the fiscal year 2014 Military Construction and Veterans Affairs Appropriations bill (H.R. 2216). One provision in the bill, which was sought by ASCP and Quest Diagnostics, urges the U.S. Department of Labor to provide funding to address the shortage of medical laboratory professionals.

The provision, part of the bill’s Veterans Job Corp Initiative, encourages the “Department of Labor to address the nationwide shortage of clinical laboratory technologists and technicians by targeting grants for veterans to fill these key Science, Technology, Engineering, and Math [STEM] job categories.”

Currently, the bill is making its way through the U.S. Senate. It was approved on June 20 by the Senate Appropriations Committee with the provisions supported by ASCP and Quest.

If signed into law by President Barack Obama, the provisions will provide needed financial support to medical training programs to increase the number of qualified professionals in the laboratory workforce.

ASCP Urges Exclusion of Pathology/Laboratory Service Providers from EHR Safe Harbor Rules

ASCP recently co-signed a letter that was sent to key members of Congress urging support for excluding providers of anatomic pathology and medical laboratory services as eligible donors under current federal safe harbor rules for electronic health records (EHRs) donations. The goal is to remove pathology and laboratory service providers from the list of providers who can donate up to 85 percent of the cost of EHRs and corresponding training programs to a referring physician.

The joint letter was developed by the College of American Pathologists and co-signed by ASCP, the American Clinical Laboratory Association, and the American Academy of Dermatology. It was sent to members of the House Committees on Ways & Means and Energy & Commerce and the Senate Committees on Finance and Health, Education, Labor, and Pensions. Similar to concerns ASCP has raised about self referral, the inclusion of pathology and laboratory services providers on the safe harbor list encourages perverse incentives into the process of referring patient specimens for analysis. The letter notes that the “referral” relationship inherent between physicians who refer testing and those who provide testing services creates an incentive for practitioners to make decisions about the choice of laboratory based on the “highest” EHR donation, rather than on quality, timely access to test results, and patient needs.” Such incentives undermine the patient’s best interests. See the letter here.



Gene Patent Decision is a Win for Patients and Researchers

The U.S. Supreme Court ruled last month that human genes cannot be patented, a decision that benefits both patients and researchers. Association for Molecular Biology v. Myriad Genetics, Inc., et al, the landmark lawsuit challenging whether isolated human genes are patentable, questioned Myriad Genetics’ right to patent BRCA1 and BRCA2, two genes which correlate to significantly increased rates of breast and ovarian cancer. The patents had allowed Myriad to be the exclusive U.S. commercial provider of screening assays for these genes. They also permitted the company to determine the terms and price for testing, making it impossible for women to access alternate tests or obtain a second opinion about their results. The patents gave Myriad the authority to prohibit researchers from investigating these genes without first gaining permission.

The battle over the legality of gene patents began in 2009 when the American Civil Liberties Union (ACLU), representing numerous clients that included ASCP, researchers, patient advocates, and patients, sued Myriad Genetics and the United States Patent and Trademark Office. As it moved through the lower courts with a series of lengthy and contradictory rulings, the key point of contention in the case has been the patentability of human genes. The plaintiffs argue that patents on human genes, which are “products of nature,” violate the First Amendment and patent law. The Supreme Court agreed. See the full story here.



ASCP Focused on the Workforce Needs of the Future

The 2013 ASCP Task Force on the Laboratory Professionals Workforce will release a report of its recommendations at ASCP 2013 ASCP Chicago, Sept. 18–21. The Task Force is charged with developing a comprehensive organizational strategy to address the future workforce needs of the nation’s clinical laboratories to provide timely and safe patient care and to fully realize the benefits of personalized medicine. The report is a comprehensive evaluation of the current state of the workforce, as well as the potential impact the nation’s changing demographics and health reforms will have on the demand for laboratory services.

ASCP President-Elect Steven H. Kroft, MD, FASCP, will present ASCP strategies regarding both the laboratory professionals and pathologist workforce at the Association of Pathology Chairs meeting this month in Boston. Dr. Kroft facilitated a roundtable discussion on the pathologist workforce at the ASCP Leadership Forum held in April in Florida.


ASCP Joins GME Advocacy Coalition

ASCP has joined a graduate medical education (GME) advocacy coalition organized by Association of American Medical Colleges. Cuts to GME funding threaten the ability of medical schools and teaching hospitals to train physicians, nurses, and other healthcare providers, as well as limit critical services to the community. Medicare support for GME is regularly identified as a potential source of government savings. The goal of the GME Coalition, whose members include several medical professional organizations and specialty societies, is to advocate for sufficient GME funding to avert a physician workforce shortage. ASCP and the Association of Pathology Chairs collaborated with the Cooperating Societies of the American Board of Pathology last year to urge the Institute of Medicine to consider adding pathology to the list of specialties that are recommended for targeted increases in Medicare funding for graduate medical education.


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