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ePolicy News April 2014

Tuesday, April 1, 2014



Politics Trump Policy: Congress Passes 17th Temporary Payment Patch in Lieu of Permanent SGR Repeal

Bill Averts 24-Percent Cut to PFS Reimbursement, Lays Out Plan to Revalue Entire CLFS, Delays ICD-10 Implementation, and Sets Annual Target to Revalue Misvalued PFS Codes

On Monday, March 31, the U.S. Senate passed H.R.4302, the Protecting Access to Medicare Act of 2014. The bill, passed in the U.S. House of Representatives late last week, authorizes another temporary payment patch to avert the 24 percent reduction in physician reimbursement called for by Medicare’s flawed Sustainable Growth Rate (SGR) payment formula. The 13-month payment patch extends the positive 0.5 percent update authorized in the previous payment patch for the remainder of CY 2014 and freezes payment rates beginning in CY 2015 through March. It is intended to secure physician reimbursement rates and patient access while biding Congress time to negotiate financial offsets for the funding of permanent SGR repeal legislation. The President will sign the bill into law today, which marks the expiration of the previously-authorized payment patch through March 31.

ASCP is grateful to Congress for averting the double-digit cuts to Medicare reimbursement called for by the SGR. However, the Society joins the entire physician community in its disappointment that Congress has failed to leverage this unprecedented bipartisan, bicameral agreement on the policy underlying SGR repeal legislation due to political disagreements regarding the funding sources underlying its passage. Ironically, failure to agree on financial offsets to help fund complete SGR repeal now costs Congress an additional $21 billion, driving the cumulative cost of the 17-payment patches authorized since 2003 to $177 billion and merely deferring the inevitable cost of complete SGR repeal.

The Clinical Laboratory Fee Schedule Revaluation (CLFS) Plan

Nonetheless, all is not lost in regard to ASCP’s advocacy efforts around this issue. While Congress is not yet in a position politically to pass SGR repeal, it was responsive to one of the Society’s policy recommendations to help fund SGR repeal. Accordingly, to help fund this payment patch legislation, Congress will be allocating cost-savings (estimated at $2.5 billion) from the mandatory revaluation of the clinical laboratory fee schedule (CLFS) that was finalized by the Center for Medicare and Medicaid Services (CMS) in the CY 2014 Medicare Physician Fee Schedule (PFS) Final Rule.

In proactively proposing the allocation of cost-savings accrued via the mandatory revaluation process that is already set to take place, the laboratory community aimed to secure an active role in the implementation process, ensure patient protections, and deter Congress from subjecting laboratories to additional reimbursement cuts to help fund SGR repeal. The legislative language incorporated in H.R. 4302 was drafted primarily by the American Clinical Laboratory Association, with the input of ASCP and other member organizations representing the laboratory community. It repeals CMS’s authority to revalue CLFS rates based on technological change and replaces the revaluation process with a market-based approach that relies on the collection of test-specific price and volume information from private sector payors. Data collection will begin no sooner than Jan. 1, 2016 and occur every three years thereafter. CLFS payment rates will be calculated based on the volume-weighted median of the private sector rates collected, and new payment rates will apply to Medicare services no sooner than Jan. 1, 2017. ASCP is especially pleased that the final language upholds the patient safeguards intended to secure patient access throughout the revaluation process, including:

  • Required per test phase-in of payment reductions that exceed an annual adjustment threshold;

  • Positive payment adjustments to protect vulnerable Medicare beneficiary populations; and

  • Exemption from additional payment adjustments once the CLFS service rate is revalued (e.g. geographic adjustment, budget neutrality adjustment, annual update, etc.).

For a detailed outline of the CLFS revaluation process, click here.

Other Key Provisions in the Payment Patch Legislation

Though the payment patch legislation does not include the development of a compulsory quality reporting program and greater quality reporting flexibility, as proposed in previously introduced SGR repeal legislation, it does contain the following key provisions in addition to CLFS revaluation:

  • One-year extension of the PFS’s geographic adjustment (GPCI) “floor” of 1.0 for physician work;

  • One-year delay (Oct. 2015) of ICD-10 diagnosis coding set implementation;

  • Establishment of appropriate use criteria (AUC) for diagnostic imaging services and enforcement of prior authorization requirements on outliers that don’t adhere to AUCs – with suggestions to consider AUCs for diagnostic laboratory tests next;

  • Establishment of a 0.5 percent annual target in savings accrued from adjustments for misvalued services within the PFS (For 2017 through 2020, $4 billion); and

  • Revision to the Medicare sequester in 2024 that effectively amplifies the sequester’s impact on all Medicare providers in that year ($4.9 billion).

Next Steps: SGR Repeal and Stark Reform

ASCP remains committed to advocating for complete repeal of the SGR. Over the next year, the Society will be frequently engaging our membership to stand as a united front in support of immediate SGR repeal. Moreover, though ASCP is discouraged that Congress was nonresponsive to Stark reform as a suggested pay-for for SGR repeal, the Society will continue to combat political opposition to this patient-centric, non-partisan policy initiative. As a member organization of the Alliance for Integrity in Medicare (AIM) Coalition, ASCP will do everything possible to ensure that the recent inclusion of Stark reform in the President’s FY 2015 Budget Proposal will not go unnoticed. The partner organizations will continue to pressure the Office of Management and Budget (OMB) for an updated score of the Budget’s Stark reform proposal to include the additional cost-savings associated with the removal of anatomic pathology services from the in-office ancillary services exception to the Stark law. The AIM Coalition will also work toward recruiting additional co-sponsors on H.R. 2914, the “Promoting Integrity in Medicare Act of 2013 (PIMA)” and engaging the Congressional Budget Office to score its associated cost-savings.



FDA Supports HPV Test as a Primary Screening Tool

A U.S. Food and Drug Administration (FDA) advisory panel voted unanimously last month that a DNA test for the human papillomavirus (HPV) could be used before or in place of the Pap smear for initial cervical cancer screening. In three separate 13-0 votes, the Agency’s Medical Devices Advisory Committee Microbiology Panel concluded that the Cobas HPV test, developed by Roche Molecular Systems, is both safe and effective as a primary screening tool for cervical cancer.

Should the FDA itself agree with its advisory committee, comprised of academic pathologists, microbiologists, and gynecologists, and approve the new use of Roche’s HPV test, it would become, for now, another screening tool. Widespread adoption of the new test by clinicians will likely not take place until professional societies recommend it in guidelines, which could take years.

While the panel’s vote was unanimous, some members expressed reservations about using HPV testing as the sole screening tool as opposed to the current practice of co-testing. Current U.S. guidelines recommend that women between ages 30 and 65 undergo either co-testing with both HPV and Pap every five years, or Pap testing alone every three years. Women between ages 21 and 30 are advised to have Pap testing every three years.

The Cytopathology Education and Technical Consortium (CETC), an independent consortium of professional organizations involved in diagnostic cytopathology, provided testimony to the advisory panel, outlining a number of concerns that may potentially impact safety and efficacy for cervical cancer screening in the United States, should HPV primary screening gain FDA approval. ASCP, as well as the American Society of Cytopathology (ASC), the American Society for Cytotechnology (ASCT), the College of American Pathologists (CAP), the International Academy of Cytology (IAC) and the Papanicolaou Society of Cytopathology (PSC) are member organizations of the CETC.

The advisory committee's recommendation will be considered by the FDA in its review of the primary screening indication for the Roche Cobas HPV Test. While the FDA is not bound by the committee's guidance, the Agency does take its advice into consideration when reviewing medical devices.

Pathology Informatics Central to Health Information Technology

The Office of the National Coordinator for Health Information Technology (ONC) released two data briefs in February 2014 regarding “Patient Access to Test Results among Clinical Laboratories” and “Health Information Exchange among Clinical Laboratories.” The reports are based on their National Survey on Health Information Exchange in Clinical Laboratories conducted in May 2013. ONC reached out to ASCP to promote the survey among its members, and the results will be utilized in ASCP’s advocacy initiatives. The Patient Access to Test Results brief described the levels of direct patient access to test results that was allowed by clinical laboratories in the United States in 2012. Some important data from the report include significant variation in the proportion of clinical laboratories, allowing patients or representatives with direct access to clinical test results by state. Patient access to test results was significantly higher than the national average in Indiana, Minnesota, Missouri, Oregon, Oklahoma, Puerto Rico, South Dakota, and Utah. The brief also indicated that with the changes to CLIA and the HIPAA Privacy Rule as well as participation in the EHR Incentive Program, patients’ access of their laboratory results is expected to increase substantially over the years.

The second brief on health information exchange among clinical laboratories described the “capability and extent to which independent and hospital laboratories send test results as structured data to ordering practitioner’s EHR systems.” ONC reported that the most common mechanism for sharing test results was through an interface to an EHR (56 percent), followed by web portals, either provided by the laboratory (26 percent) or a third party (22 percent). The two most common challenges reported by the laboratories for sending test results are high subscription rates for exchange services providers (19 percent) and the lack of harmonization of industry accepted standards (17 percent).

ASCP supports the implementation of standardized health information technology within the nation’s healthcare system as a means to improve patient care, patient safety, and public health. Pathology informatics will be central to these improvements in health care.




Policy in Practice:
ASCP Offers Guidance for Laboratories Required to Provide Patient Access to Test Reports

As previously reported by ASCP, the Centers for Medicare and Medicaid Services (CMS) released a Final Rule in early February granting patients direct access to their laboratory test reports. Prior to the release of this Final Rule, state-level laws regarding direct access testing (DAT) dictated whether or not a patient could (1) order their own tests and/or (2) directly access their test results. This federal regulation supersedes state laws restricting access to laboratory test reports, including laws in 13 states completely restricting patient access and laws in seven states requiring provider approval prior to granting patient access.

Though this rule seems straightforward, there are a few important areas of distinction. ASCP has developed guidance material in an effort to aid implementation and assure compliance. We encourage our members to reference this material for a better understanding of the contents of this Final Rule. Key details and clarifications are as follows:

  • Two Main Laboratory Requirements: (1) Update HIPAA Notice with Patient Right to Access; (2) Enable patient access within 30 days of request (with one 30-day extension permitted).
  • Compliance Date: Oct. 4, 2014.
  • Important Regulatory Distinction: Laboratories that conduct healthcare transactions electronically (HIPAA-covered entities) are required to provide patient access while laboratories that do not (non-HIPAA-covered entities) will have discretion to grant patient access.
  • Test Report Types: Aside from employment-related test reports, laboratories must provide access to all patient-specific test reports, including laboratory-developed test (LDT) reports; laboratories are not required to provide access to public health surveillance test reports.
  • Scope of Information: The patient must be granted access to all patient-identifiable records maintained by the laboratory, including archived and offsite records.
  • Limited Exception for Denial of Requests: Patient access may be denied if it is likely to endanger the life or physical safety of the patient or another person.”
  • Allowable Patient Fees: Laboratories may recoup the cost of copying test results but may not recoup the costs associated with test result documentation, test report retrieval, patient ID verification, liability insurance, and/or the cost of maintaining information systems.
  • Request for and Provision of Access: Laboratories are granted flexibility as to how they set up systems to receive, process, and respond to requests for access by individuals.
  • Form and Format of Access: If a laboratory is unable to provide the patient information in the form requested, they are permitted to provide it in a more readily producible format.
  • Third Party Access: Upon request, laboratories must provide access to test results to any person that has the authority under applicable state law to make health care decisions for the patient.
  • Provider Responsibility: Providers are encouraged, but not required, to inform patients of their right to receive test results directly from the lab, and they are encouraged to provide the lab’s contact information.
  • Laboratory Responsibility: Laboratories are not required to interpret test reports, although they may provide additional educational/explanatory materials regarding test results to patients.

Pathology Plays Important Role in Reducing Colorectal Cancer

March marked National Colorectal Cancer Awareness Month. To celebrate the progress made in reducing the disease, gastroenterology societies came together to discuss the importance of early detection and prevention. The American College of Gastroenterology (ACG), American Gastroenterological Association (AGA), and the American Society for Gastrointestinal Endoscopy (ASGE) convened the briefing at the Rayburn House Office Building in Capitol Hill with U.S. Rep. Donald M. Payne, Jr., (D-N.J.), as a guest speaker. More than 140,000 people are diagnosed with colorectal cancer in the United States, according to the group. Thanks to screening, however, fewer than 50,000 people die from the disease. Early detection of the disease has translated into $15 billion in Medicare savings annually, according to the National Colorectal Cancer Roundtable.

While there has been progress made in the area of colorectal cancer screening, there are challenges to overcome. Many patients still forego screening due to the stigma that comes with the disease. David A. Greenwald, MD, FACG, FASGE, AGAF, Professor of Clinical Medicine, Albert Einstein College of Medicine of Yeshiva University, New York City, presented the following myths and the facts about colorectal cancer.

  • Myth: Colorectal cancer is a man’s disease.
    Fact: Colorectal cancer is an “equal opportunity offender.” Men and women are equally affected.
  • Myth: Colorectal cancer can’t be prevented.
    Fact: In many cases, it can.
  • Myth: African Americans are not at high risk for colorectal cancer.
    Fact: African Americans are diagnosed with the disease and some die.
  • Myth: Age doesn’t matter.
    Fact: More than 90 percent are found in patients over 50 years of age.

Pathology plays an important role in screening and detecting the disease. It offers crucial information to the gastroenterologists, allowing them to diagnose the disease and make proper treatment recommendations.



Utah Court Denies Myriad Injunction in Lawsuit

Last month, a federal judge denied a request by Myriad Genetics for a preliminary injunction that would have immediately stopped a rival company, Ambry Genetics, from offering a genetic test for BRCA1 and BRCA2. The decision permits Ambry to continue offering the test pending the outcome of either a trial or a settlement. Myriad had enjoyed a profitable monopoly on testing for mutations of BRCA1 and BRCA2 which correlate to breast and ovarian cancer since they were granted a patent on the genes by the U.S. Patent and Trademark Office (USPTO) in 1997. Last summer, that monopoly came to an end when the U.S. Supreme Court ruled that genes were not eligible for patents because they were products of nature.

Following that ruling, several diagnostics companies, including Ambry, began offering the BRCA1 and BRCA2 tests at a significantly lower cost than Myriad. Myriad responded by suing each company on the basis that their Ambry BRCA1 and BRCA2 tests infringed other patent claims held by Myriad that were not invalidated by the Supreme Court. However, Judge Robert J. Shelby, of the United States District Court in Salt Lake City, wrote in his opinion that Ambry had raised “substantial questions” concerning whether those remaining claims were eligible for patents. He said, therefore, that Myriad had not established that it was likely to succeed in the case on the merits of its arguments, which is a legal requirement to win a preliminary injunction.

While not covered by this motion, several other pending lawsuits have now been transferred to Judge Shelby. These include cases involving Quest Diagnostics, Invitae, LabCorp, Counsyl, and GeneDX. The second lab that Myriad sued, Gene by Gene, settled the case with them last month.

The battle over the legality of gene patents began in 2009 when the American Civil Liberties Union (ACLU sued Myriad Genetics and the U. S. Patent and Trademark Office (USPTO), on behalf of researchers, genetic counselors, patients, and breast cancer and women’s health groups. ASCP and several other medical professional associations were also plaintiffs in the suit. The patents had allowed Myriad to be the exclusive U.S. commercial provider of screening assays for these genes, and 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 also gave Myriad the authority to prohibit researchers from investigating these genes without first gaining permission. The key point of contention in the case, as it moved through the lower courts with a series of lengthy and contradictory rulings, 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.

As a result of the Supreme Court’s recent rulings with regard to gene patents, the U.S. Patent and Trademark Office issued a new guidance applying the decisions. The guidance instructs patent examiners that all patent applications (not just those involving DNA or other nucleic acids) must be evaluated for whether they claim products or laws of nature and lays out criteria for doing so.

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