Federal

ASCP Comments on PFS
Urge Tough Anti-"Pod" Rules

On August 31, ASCP submitted its comments on the 2008 Physician Fee Schedule (PFS), urging the Centers for Medicare & Medicaid Services (CMS) to adopt tough regulatory provisions to prevent abusive billing practices, such as those that may be used by clinicians utilizing "pod" or "condo" laboratories to circumvent Medicare anti-fraud rules. Pod labs utilize the Medicare reassignment provisions to enable clinicians and other entities to capture and markup the reimbursement resulting from the referral of pathology services. ASCP also urged CMS to work proactively with Congress to address problems with the sustainable growth rate (SGR) and to revisit its proposals for the date of service of stored specimens.

ASCP strongly supported CMS's proposal to extend the anti-markup prohibitions to both the professional and technical component. Currently, Medicare rules only prohibit the markup of the technical component (TC) of purchased diagnostic services performed by outside suppliers and billed by a different individual or entity–though Medicare program instructions do restrict who may bill for the professional component (PC). ASCP suggested that the anti-markup provision should be applicable regardless of whether the TC or PC is purchased by the billing physician or medical group, or whether the physician or other supplier performing the TC or PC reassigns his or her billing rights to the billing physician or medical group. This framework would apply the anti-markup provision to all arrangements not involving a reassignment from a full-time employee.

Similar to ASCP's comments last year, the Society once again called on CMS to clarify that the Medicare reassignment of benefits rules pertaining to contractual arrangements are subject to program integrity safeguards relating to the right of payment for diagnostic tests.

The absence of a prohibition on the markup on both the TC and PC of pathology services creates an economic incentive for clinicians to attempt to profit from these services. This incentive also can result in an overutilization of reimbursed services. With CMS monitoring the utilization of Medicare reimbursed services, substantial overutilization of certain pathology services could result in CMS initiatives that may adversely affect the ability of pathologists to bill for legitimate services.

The Department of Health and Human Services' Office of Inspector General recently conducted three audits of physician group practices to examine their use of the reassignment provisions to bill for pathology services. The OIG audits revealed that all of the audited physician groups substantially increased utilization after entering into reassignment arrangements for pathology services—699%, 230%, and 26%.

ASCP also urged the Administration to work with Congress to fix the flawed SGR formula, which has resulted in CMS proposing negative annual updates in the Physician Fee Schedule (PFS) for several years. Using the SGR as a guide, CMS has proposed that the physician fee schedule receive a negative 10 percent update in 2008, assuming Congress does not act to stop the negative update. Congress is currently working on a legislative package that would reverse the negative update and provide for a very modest increase.

To improve the likelihood that CMS would change its rules as proposed, ASCP urged the agency to make its anti-markup and reassignment proposals exclusive to pathology. This was suggested in part to shield pathology from concerns that the CMS proposals could adversely affect radiology and imaging services.

ASCP also commented on the date of services for stored specimens. Last year, the agency changed the date of services requirements for stored specimens, resulting in the date of service usually being defined as the date the specimen was collected. This change, which was applied only to clinical diagnostic laboratory tests, has created problems for a number of laboratories because it can negatively impact reimbursement. CMS proposed this year to apply these same standards to physician pathology services. ASCP opposed the change urging the agency to reconsider this both proposals.

ASCP Responds to FDA Draft Guidance on IVDMIAs

In July, the Food and Drug Administration (FDA) released a second draft guidance on their intent to regulate in vitro diagnostic multivariate index assays (IVDMIAs). It was issued in response to numerous comments from stakeholders in the laboratory community concerned that the FDA's definition for IVDMIAs was much too broad and had the potential to include a wide range of tests. This revised draft provides a more detailed definition of an IVDMIA by including examples of tests the agency does and does not consider to be IVDMIAs. It also outlines premarket and postmarket requirements for these assays.

Despite FDA's attempt to clarify which tests will be affected, many in the laboratory community still consider the definition of an IVDMIA to be too subjective to enable laboratories themselves to determine how particular tests will be classified. Other pressing concerns remain as well, including how affected laboratories will manage trying to meet both FDA and CLIA regulations, the impact a lengthy approval process will have on the development of new tests, and if insurers will reimburse for assays performed during the premarket study phase.

ASCP President, John S. J. Brooks, MD, outlined these concerns in a letter to the FDA submitted on behalf of the American Society for Clinical Pathology. ASCP will continue to monitor developments on FDA's new IVDMIA regulatory procedures and will report any changes in ePolicy.

ASCP Submits Comments on Phase V of MUEs

ASCP recently submitted comments to a CMS contractor on the fifth round of proposed “edits” under the Medically Unlikely Edits (MUE) program.

Phase V of the MUE program outlined 173 edits or limitations on the number of procedures that could be billed per patient per day. ASCP suggested changes to 62 CPT codes. Of these changes, ASCP argued that there should be no limits whatsoever on 30 of the 173 edits contained in the phase V draft. Imposing limits on these 30 codes, ASCP commented, would be “medically inappropriate.” These codes, ASCP noted, were either methodological CPT codes and/or not analyte specific. Many of the proposed limits concerned the detection of antibodies or infectious agents.

Also among the changes called for by ASCP were increases in the proposed limitations for the individual analytes that compose the basic metabolic panel. ASCP was concerned that the proposed limits for total calcium (82310), carbon dioxide (bicarbonate) (82374), chloride (824356), quantitative blood glucose, (except reagent strip) (82947), and urea nitrogen (84520), for example, were too low.

Moreover, ASCP was also concerned about the proposed MUEs for the clinical pathology consultation codes (80500 and 80502). Setting a limit of one billable service per patient per day would not allow for proper patient management in cases where a patient may be seen for more than one condition or disease in a day.

Phase V of MUEs is scheduled to be implemented on January 1, 2008.

Congress

SGR Fix/Children's Health Insurance Expansion Set to Pass Congress in Fall Session

The U.S House of Representatives recently passed legislation to temporarily correct the flawed Sustainable Growth Rate (SGR) formula that would result in a 15-percent reduction in physician Medicare payment over the next two years. Both the Senate and House have passed an expansion of the state Children's Health Insurance Program that provides health insurance for millions of children who would be uninsured without the program.

The legislative package that includes the SGR fix is the Children's Health and Medicare Protection Act of 2007 (CHAMP). The House legislation contains only a temporary solution to the SGR and the Senate version neglected to include a SGR provision. Both legislative packages are expected to be merged into a single bill that will be voted on before it is sent to the President for his signature. ASCP expects to see the SGR provisions incorporated into the conference version of the legislation.

ASCP supports the initiatives to both “Fix the SGR” and provide additional health insurance coverage for the nation's children.

Lawmaker Looks at Legislation to Force Repeal
Velázquez Calls for End to CMS Competitive Bidding Demo Project

As anticipated, Representative Nydia Velázquez (D-NY) introduced legislation last month to repeal the Centers for Medicare & Medicaid Services (CMS) proposed competitive bidding project for laboratory services. H. R. 3453, the “Community Clinical Laboratory Fairness Act of 2007” was introduced in response to a great deal of outcry from the laboratory community, who had expressed concerns over this proposal early on. Opponents were vocal at a July 16 CMS Open Door Forum, which sought to provide an overview of the proposal and at a July 25 hearing of the House of Representatives Committee on Small Business.

It was at that hearing on July 25, that Committee Chairwoman Velázquez vowed to introduce repeal legislation, stating that CMS' competitive bidding project threatens to dismantle this system overnight. “It seems CMS has ignored congressional intent and moved forward with a project that creates a cumbersome bureaucracy. As proposed, it [the competitive bidding demonstration project] could make it impossible for small labs to survive.”

CMS was mandated under the Medicare Modernization Act (MMA) of 2003 to conduct a demonstration project on the competitive acquisition of laboratory services under Medicare Part B clinical laboratory fee schedule. However, from the onset, the proposal has been ill-received. Arguments arose that such a model would take a huge toll on small business operations and vulnerable populations including nursing home residents and home-bound patients. Moreover, the laboratory community maintained that competitive bidding would reduce this integral component of health care delivery to a commodity, limit the number of labs available to serve patients, and compromise quality.

Should the repeal legislation pass, it would immediately put a halt to the competitive bidding project. Currently, H. R. 3453 has been referred to the following House Committees: Energy and Commerce, Ways and Means, Judiciary and Small Business. Advocates of the repeal are working to garner additional Congressional support.

States

NY Legislation Recognizes Laboratory Personnel

New York State Senator Stachowski recently introduced legislation, S6103, to amend the state's current education law by recognizing histotechnology as a separate and distinct discipline in the field of laboratory medicine. The bill would create licensure categories for histotechnologists and histotechnicians. ASCP applauds this effort. Part of the Society's criticism of the state's licensure requirements was that it did not take into consideration practitioners with specializations within the lab, failing to recognize the unique nature of the academic and practical aspects of performing histotechnology or providing for the education of histotechnicians or histotechnologists. The legislation is a positive step in acknowledging the specializations that laboratory medicine comprises. ASCP will work with Senator's Stachowski's office to secure passage of S6103 and to fix other problems with the New York Clinical Laboratory Technology Act.

Themes in Patient Safety

Lab Managers' Skill Set a Good Fit for Patient Safety Initiatives

Patient safety has become a front and center topic in healthcare ever since the now infamous 1999 Institute of Medicine report, To Err is Human: Building A Safer Healthcare System, estimated that as many as 98,000 patient deaths per year were attributable to medical error. This report lead to many more studies and many more equally frightening statistics. It expanded the mission for governmental accrediting entities and gave birth to a number of private organizations whose objectives include monitoring the prevalence of these adverse events and helping hospitals and other healthcare providers improve the quality of their service. It also made patient safety courses part of the curriculum in medical and public health schools. Within hospitals and other institutions that provide patient care, new management groups or departments, staffed with a variety of clinicians bearing newly created titles, were formed to investigate medical errors and make protocol recommendations.

Certainly, these are changes for the better, but, all too often, hospital patient safety committees lack a representative from the laboratory. In hospitals, quality patient care relies on the actions of many individuals, each responsible for an integral component of that care. These individuals include physicians, nurses, administrative personnel, radiology technicians, dietary aids, and of course, laboratory staff. Measurable strides in patient safety depend on improving the intricate system that allows the contributions of each of these providers to impact patient care with utmost accuracy and timeliness. To Err is Human and numerous subsequent reports on patient safety, assert that most medical errors occur, not by bad healthcare workers, but good employees working in bad systems. With each of the Joint Commission's 2008 Safety Goals, sixteen of them, a list of the affected patient-care providing entities follows. The laboratory is listed beside four of these goals. Every hospital patient safety management group needs to include a member from the laboratory.

Susan Morris, CLS(NCA), MT(ASCP), MPH, serves in this capacity at St. Luke's Magic Valley Regional Medical Center in Twin Falls, Idaho. Her position as a Patient Safety Officer is a hospital-wide administrative level position. She works with representatives from other departments to resolve issues and redesign processes. Her responsibilities include leading post-incident investigations, conducting root cause analysis, leading pro-active error prevention teams in Failure Modes & Effects Analysis, a systematic, proactive method for evaluating a process to identify where and how it might fail. Morris also manages her institution's compliance with the Joint Commission's Patient Safety Goals and oversees the implementation of the Institute for Healthcare Improvements 5 Million Lives campaign, which seeks to protect patients from five million incidents of medical harm during the period of December 2006 to December 2008.

Morris is also charged with improving the safety culture of her institution. That means when an error occurs, rather than assigning blame, managers need to examine flaws in the current system that allowed the error. To create a culture of safety, managers need to make it safe for staff to report errors. Nothing can be learned from unreported incidents—every error or near-miss is an opportunity to make a process safer and more error-proof.

Morris attests to the value of her frequent communication with managers at all levels from other departments at her hospital to improving patient safety. “Healthcare is complex,” says Morris. “Lab managers cannot resolve patient safety issues strictly from within the lab. They must be actively involved with other members of the healthcare team to understand the interactions.”

However, an even better reason to include laboratory managers in patient safety activities is that they already possess a skill set that lends itself to investigating deficiencies in quality and implementing improvements. Henry C. Lee, MT (ASCP), DLM, CPHQ, is the Director of Performance Improvement at Hollywood Presbyterian Medical Center in Los Angeles, California. Although his is a hospital administrative position and not a laboratory position, his experience in the laboratory prepared him well for his current set of responsibilities as head of a department which monitors hospital-wide activities for compliance with Joint Commission, the State Department of Health, CMS, and other regulatory agencies. “Lab managers are tuned into quality and quality control, and using data to make improvements in procedures” says Lee. The goal of performance improvement is to ensure that the processes in place are performing optimally. Lee elaborates, “An example of this is the proficiency testing that the laboratory performs. Using those data and comparing it with established benchmarks forces the laboratory to narrow the allowable limits with calibration and quality control. At the same time, if there was an instrument or operator error, corrective action will be taken to narrow the variability. In doing so, there will be fewer lab errors and fewer erroneous results reported.”

Lee concurs regarding the importance of having laboratory management involved in hospital-wide patient safety initiatives. “Patient safety,” he says, “goes beyond the laboratory identifying the correct patient, drawing the right specimens, and obtaining accurate results. It depends on reporting those results so the clinician can act upon them. The laboratory may perform tests accurately and get the reports out; however, if the clinician fails to receive the results, he or she cannot act upon it. When an accurate critical lab value is reported in the right time frame so the physician can act on what the test indicates, that constitutes patient safety and quality healthcare.”

Andrea T. Bennett, MT (ASCP), MPH, is a Senior Program Manager for Membership and Public Policy Development in ASCP's Washington, DC office. She works part-time at a community hospital in the area.