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ePolicy News November, 2011

Monday, October 31, 2011



CMS Releases Final Accountable Care Organization Rule
ASCP Pleased HHS Ditches Proposed EHR Requirement

The U.S. Department of Health and Human Services (HHS) has released the final regulations implementing the Accountable Care Organizations (ACOs) and the Shared Savings programs. Numerous changes to the regulations appear to make them more feasible and attractive to the development of ACOs. In particular, ASCP hopes/expects that the elimination of a proposed requirement to use electronic health records (EHRs) as a requirement of participation may provide some relief for pathology groups and smaller clinical laboratories hoping to participate in the program.

Though the rule will not guarantee that pathologists are eligible to participate in the program (this is up to each ACO), the final rule does not prevent their ability to participate in and receive shared savings. In ASCP’s comments on the proposed rule, the Society highlighted the important role that pathologists could, and should, play in ACOs and how pathologists as well as clinical scientists with doctorates could help ACOs reach their important goals of cost containment, quality improvement, and enhanced patient experience. [see also ASCP's Comments on the ACO Rule.]

As part of its response to the hundreds of formal comments received about the rule, HHS cut in half the number of quality measures on which ACOs would have to report. The number of measures ACOs will now have to contend with has been reduced to 33 from 65. The Department also increased the financial incentives for organizations to participate in the ACO program. Scores of organizations representing physicians, clinics, and hospitals had warned HHS that they would likely not participate in the proposed payment system reform without significant changes to the rule.

Eliminating the meaningful use requirement on primary care providers may prove beneficial to some pathologists and smaller clinical laboratories. The proposed rule had suggested that at least 50 percent of primary care providers must be “meaningful users” of EHRs. The requirement could have proved problematic for the laboratory industry as the EHR meaningful use rule could help clinicians get laboratories to pay for the costs of interfacing the laboratory to the clinician’s EHR. These costs are estimated to range in cost from $5,000 to $15,000 per interface. ASCP is pleased with elimination of the EHR meaningful use mandate. In its comments on the ACO rule, ASCP argued that the adoption of EHR meaningful use metrics could negatively affect pathology and laboratory medicine, which will likely be responsible for the bulk of patients’ medical records.

The rule now allows for a savings only model that does not impose financial risk to ACOs unable to meet cost targets during an initial contractual period. The rule also expands the type of provider organizations that can participate in the program to allow community health centers and rural health clinics to participate. While the changes are being lauded by several large organizations that previously opposed the proposed rule, it remains to be seen whether the changes are sufficient to attract enough interest in the ACO program for the program to meet its goals for organizational participation.


ASCP Comments on HHS Proposed Changes to Rules Governing Human Subject Research

For the first time in 20 years, the U.S. Department of Health and Human Services (HHS), in coordination with the Office of Science and Technology Policy (OSTP), is proposing revisions to rules governing scientific research involving human subjects with the intent of extending protections to more study subjects while simultaneously streamlining the oversight process for investigators. The current regulations governing human subjects research, referred to as the “Common Rule,” were developed years ago when research was predominately conducted at universities, colleges, and medical institutions, and each study generally took place at one site. HHS has expressed concern as to whether the Common Rule has kept pace with the evolving human research enterprise, the proliferation of multi-site clinical trials, use of biospecimen repositories, and the use of advanced technologies, such as genomics.

The regulatory changes being considered in the advanced notice of proposed rulemaking (ANPRM), Human Subjects Research Protections: Enhancing Protections for Research Subjects and Reducing Burden, Delay, and Ambiguity for Investigators, address many research issues. Of greatest concern to the pathology community is the proposed changes in the use of archived biospecimens.

The proposed rule would require that investigators obtain a subject’s written consent for research use of archived biospecimens, even those that have been stripped of identifiers. The basis for this particular revision in the regulation stems from the publicly held notion that with modern DNA sequencing, biological specimens are “inherently identifiable.” However, even if the entire genome of an archived biospecimen is determined, unless there is a link to prior information about that subject or his or her family members, that data alone is simply not sufficient to identify the subject from whom it was collected. ASCP, and many in the pathology community, feel that this requirement, if adopted, would offer minimal, if any, additional protections for the biospecimen donors but would have a devastating effect on research and the advancement of medicine. ASCP has responded to the proposed changes in a comment letter submitted to the HHS.


HHS Inspector General States Clinician Investments in Pathology Management Companies Likely Violate Anti-Kickback Law

On Oct. 11, the HHS Office of Inspector General (OIG) released an advisory opinion reaffirming the Department’s position that physician investments in pathology management arrangements to which the physician refers patients for anatomic pathology services could violate the Federal Anti-Kickback Law.

The advisory opinion was issued in response to a Delaware physician-owned limited liability company planning an arrangement enabling physicians to invest in a company providing pathology laboratory management services. Under the proposed arrangement, the management company would provide investment opportunities to physicians, such as urologists, gastroenterologists, and dermatologists, in a position to refer patient specimens to the laboratory for analysis.

The advisory opinion noted that the OIG has warned the public about arrangements in which a healthcare provider expands into clinical diagnostic laboratory services by contracting with an existing provider of that laboratory services to operate a newly formed laboratory subsidiary on essentially a turnkey basis.”

OIG concluded that the proposed arrangement would pose considerable risks of overutilization of laboratory services, distorted medical decision-making, and increased costs to Federal healthcare programs. The OIG argued that the proposed arrangement appears to have no business purpose other than to permit the physician investors to profit from the business they generate for the pathology laboratory in the form of their laboratory specimen referrals.”


Advisory Panel Broadly Defines Essential Benefits Package
Institute of Medicine Outlines Recommendations for State-Run Health Plans

The Institute of Medicine (IOM) recently laid out its recommendations of what an “essential benefit package” (EBP) should comprise; the package is what is to be covered in state run insurance plans beginning in 2014 as detailed in the recent health care overhaul. Without going into specifics, IOM, which serves as an advisor to Congress, addressed two basic concerns: that the plans be affordable and that rather than a costly, cumbersome new strategy being developed, that the current model of small employer based plans be followed.

IOM recommended considering costs as a factor in what the plans looked like and that any new benefits should be offset by savings. The advisory panel, which among its members includes former ASCP Executive Vice President John R. Ball, MD, JD, MASCP, created a framework and methodology for how to develop the benefits package but left the specifics to the HHS.

The panel has also suggested a process for public comment that would conclude in May 2012.

Below is an edited interview with Dr. Ball about the IOM Report to the HHS.

Question: Why did you decide to focus on small employers instead of larger employers?
One reason was the statue asked us to focus on the typical employer. The ACA required the U.S. Department of Labor to assist Kathleen Sebelius, HSS Secretary, by carrying out a survey to determine the benefits offered by employers. The Department of Labor determined no typical plan exists. The choices for the IOM advisory panel were a blend of plans, large employers, or small employers.

The benefits for small and large employers are similar. The big difference comes with benefit design. What do we chose? Until 2017, the primary customers are small employers and individuals. The healthcare packages for large employers are only offered after 2017. In addition, 98 percent of businesses are small employers, although 60 percent of all U.S. employees work for larger companies.

Q: Can you tell me what the IOM considers the policy foundation for the healthcare plan?
The charge to the IOM committee from the HHS Secretary was to recommend policy foundations, criteria, and methods for determining and updating the essential healthcare benefits. We determined that the single most important issue was balancing the comprehensiveness of the benefit package with its affordability, since if the package was not affordable, the central tenet of healthcare reform—enabling more people to have insurance—would not be met. The starting criteria were what small employers would have paid in 2014 per person for health care if the ACA did not exist. That amount varies from $5,600 to $7,000 per person.

Q: How will this healthcare package maintain affordability?
Our recommendations included three steps. First, start out with what small employers could afford and put all the benefits in that. For example, you have two choices when you go to grocery store. You can either get all groceries you want and pay for them. Or you have $100 to spend on groceries, and you write a list of the items you need and can afford for $100.

Second, the cost of the essential benefit package in each succeeding year should not increase more than the rate of general healthcare inflation. There’s no room for ballooning costs. The only leeway was for medical inflation.

Third, consider runaway health costs. The HHS Secretary has to devise a strategy for controlling the overall cost of the healthcare package. Otherwise, it’s like punching a balloon if one controls inflation in only one segment of health care, it expands somewhere else.

Q: How can such a proposed health plan return the United States’ health care costs to more normal levels and provide more comprehensive coverage for 30 million people who currently have no health coverage?
That’s the hope. In the updating process, one of the steps we plug in and learn about over time concerns the implementation. The healthcare package will be implemented at the state level. The states have to be monitored for what works and what does not by the federal government. The healthcare package has to get better, so the HHS Secretary is looking at which healthcare expenses are more medically effective. This is a process in which to ascertain public values. That’s how the HHS Secretary will decide and then pay for procedures and tests that are medically effective. One of criteria has to do with cost effectiveness. For example, does new technology for tests offer great improvement? And is its cost equal or lower cost than older technology?

Q: The IOM recommended an extensive effort to engage the public. In what ways can the public be engaged in this discussion?
We were fortunate that Marjorie E. Ginsburg, MPH, Executive Director at the Center for Health Care Decisions, served on the IOM advisory panel. She is knowledgeable about a structured way by which people would buy the insurance make objective choices among competing options—how they make tradeoffs depend on their values. Here are the choices we have to make. We cannot stuff 12 pounds of benefits into an affordable 10-pound bag unless we make choices—choices based first on the science of what is effective, and second on what people value. What are the 10 pounds? Begin the discussion with the public by weighing the benefits with a moderator.

The state of Oregon has done this for a long time, and several U.S. cities do this. Chapter Six of the IOM Report discusses how the HHS Secretary can hold these public discussions. Start with small employer plan. Get the public involved, so they can understand the criteria and offer their input. That way the healthcare plan is informed by science and informed by the public’s values.




Deadline on Congressional Super Committee Is Fast Approaching

The Nov. 23 deadline on the Congressional Super Committee, formally known as the Congressional Joint Select Committee on Deficit Reduction, is fast approaching, and so too is the window for encouraging Congress to fix the flawed sustainable growth rate (SGR). The Nov. 23 deadline requires the Super Committee to vote to approve a plan providing $1.5 trillion in deficit reduction over a 10-year period.

As ominous as the deadline may seem it is only one of several important deadlines Congress imposed to force itself to curtail spending. The November deadline only pertains to voting on a deficit reduction plan. It does not, however, require the committee to approve legislation cutting the deficit by $1.5 trillion by that date. The Super Committee has until Dec. 2 to submit to Congress and the President the specifics: the its report and legislative language.

The next key deadline is Dec. 23, the date by which both houses of Congress are required to vote on the Super Committee’s bill. However, this deadline pales in comparison to the next deadline: Jan. 15. This is the date by which Congress must enact the Super Committee’s deficit reduction legislation. If it fails to approve at least $1.5 trillion in deficit savings by this date, then $1.2 trillion in across-the-board spending cuts in government spending will be triggered.

As ironic as it may seem, Medicare providers may prefer to see Congress enact the $1.5 trillion in cuts. That’s because if the $1.2 trillion in across-the-board cuts are imposed, Medicare provider rates will be cut by 2 percent. In addition, after failing as their task to reduce annual deficits, the political climate may not be sufficient to enable Congress to fix the SGR or reverse the 30-percent cut in reimbursement rates it is expected to force in 2012.

Fortunately, many in Congress, for reasons outlined in last month’s ePolicy News story on the SGR, appear supportive of ASCP’s call for including a permanent fix to the SGR as part of the $1.5 trillion deficit reduction plan. Because of the importance of fixing the SGR, ASCP encourages its entire membership, as well as individuals who are not ASCP members, to use the ASCP e-Advocacy Center to send their elected officials in Washington a message about the importance of fixing the SGR this year.


Threat to Graduate Medical Education Funding Necessitates Call for Action
ASCP, AAMC Ask Congress to Stave Off Substantial Cuts to GME

ASCP and the American Association of Medical Colleges (AAMC) are urging their members to seek action from Congressional leaders, asking that they reconsider a deficit reduction proposal (being considered by the Congressional Super Committee, that has been charged with coming up with the needed cuts to slash the nation’s deficit) that would cut GME funding as much as 60 percent, a cut in funding of approximately $60 billion. Both organizations maintain that this would jeopardize residency training programs nationwide and that the inability to train new crops of physicians threatens the well-being of all Americans by reducing access to care. The Supercommittee has deadlines looming (See related story above.), so ASCP and AAMC are urging that people weigh in soon at 



ASCP Conducts Wage and Vacancy Trend Analysis (1988-2010)

For the past 22 years, ASCP has been conducting a biannual Wage and Vacancy (W&V) Surveys of the medical laboratory profession. Results from these surveys reveal that laboratory medicine is a rapidly evolving field. However, published data on the economic trends are few. In addition, information on how the field is adapting to changes in the economy, science, and technology over time may not be sufficient to make projections on the future of the profession.

For the first time, ASCP has examined each medical laboratory occupation from the W&V Surveys to ascertain each profession’s development during the 22-year period. Results show that the percentage of increase in laboratory personnel salaries exceeded that of all U.S.-employed individuals. The profession appears to also be making gains over the national inflation rates. These data suggest that overall, laboratory salaries have remained relatively stable compared to other workforce sectors in the United States.

The findings of this research were presented at the ASCP 2011 Annual Meeting/World Association of Societies of Pathology and Laboratory Medicine XXVI World Congress, Oct. 19–22, Las Vegas. Many of the laboratory professionals who attended the presentation expressed their opinions and provided comments. It includes their concerns on the significant need for laboratory professionals now and in the future. With many lab professionals nearing retirement, the profession may suffer a “brain drain,” and program closures. Since the salaries of entry-level lab professionals are almost the same as supervisors, the loss of vacant positions may not be immediately filled. Detailed results of the W&V Trend Analysis will appear in the January 2012 edition of Critical Values.



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