CAPScan

January 2008
Feature Story

A defense of PC billing

The CAP defended the right to bill for the professional component of clinical pathology services in a brief provided Dec. 3 to a Florida state appeals court, for a case in which an insurer maintains it has no obligation to pay for the services.

The brief, which was compiled by the CAP, American Medical Association, and Florida Medical Association, outlines the importance of the services to patients and summarizes prior legal cases that have recognized that professional component services are valuable and necessary medical services for which pathologists should be paid.

In the appellant case of Health Options Inc. v. Palmetto Pathology Services, the defendant HMO maintains that despite a trial court’s rejection of its position, it has no obligation to pay for professional component services provided to its subscribers because these services are “hands-off” and “not ‘rendered to’ specific HOI [Health Options Inc.] members.”

However, as the CAP described in its brief and the trial court previously ruled, the services that Florida Pathology Services provided are critical to ensuring that the results of each laboratory test for each patient are timely, medically reliable, and clinically useful.

“If pathologists have a sufficient relationship with the patient to expose them to malpractice liability for the misreporting of a clinical lab result,” the CAP says in the brief, “then it must follow that they should be able to bill the patient or patient’s insurer for those services which underlie that relationship.”

The brief cites prior legal cases that established precedence in support of billing for professional component services, including the leading federal case on the subject, Central States v. Pathology Laboratories of Arkansas. In that case, the court rejected the insurer’s argument that pathologists “do not render medical services to the Hospital patients.” To the contrary, the court of appeals found that “Pathology Laboratories provides supervisory services of value to all patients, and interpretation services of value to some.”

In the current case, Health Options will have the opportunity to file a reply brief. The appeals court will hold oral arguments sometime this year before it makes its decision.

Cytology PT House bill now has companion in Senate

Legislation was introduced in the U.S. Senate Dec. 19 that would establish a continuing medical education testing program for pathologists and others who screen for cervical cancer.

Sens. Mary Landrieu (D-La.) and Johnny Isakson (R-Ga.) introduced S. 2510, the Cytology Proficiency Improvement Act of 2007, as a companion measure to House bill H.R. 1237. Both bills would modernize and improve outmoded federal regulations under the Clinical Laboratory Improvement Amendments of 1988 that subject those who screen and interpret Pap tests to annual proficiency testing. The current cytology proficiency testing requirement is based on regulations written more than a decade ago.

The Senate bill, like its House counterpart, would provide much needed reform by requiring those who read Pap tests to participate in rigorous annual continuing medical education rather than the current testing program. The CME approach would be an improvement over the proficiency testing approach because it would challenge screening and interpretive skills in a constructive learning environment and keep pace over time with advances in science and technology.

The Senate bill further clarifies how CME results would be incorporated into the laboratory’s quality assurance activities. Under the bill, the laboratory director would use CME testing results, and other CLIA-established metrics, to assess individual performance and, if necessary, take appropriate action in terms of remedial training or further continuing medical education. These CME results would also be shared with and reviewed by the laboratory’s accrediting organization as part of its laboratory inspection and accreditation process.

S. 2510 and H.R. 1237 build upon the existing and extensive federal quality control requirements of CLIA, proŽviding the laboratory director and accrediting bodies with an additional tool to evaluate the quality of cervical cancer screening in the laboratory.

The CAP has been working with the 66-member Cytology Proficiency Improvement Coalition in support of H.R. 1237, and this work will continue as backing builds for the Senate companion measure.

Cut in physician payment conversion factor delayed

The Medicare, Medicaid and SCHIP Extension Act of 2007 passed the U.S. Senate and House in late December in a legislative action that will delay for six months the scheduled 10.1 percent cut in the Medicare physician reimbursement conversion factor.

In the legislative package, the technical component “grandfather” was also extended until June 30, permitting eligible independent laboratories to continue billing Medicare directly for the technical component of certain physician pathology services.

The legislation extends the State Children’s Health Insurance Program through March 2009 and the Medicare Physician Quality Reporting Initiative and eligibility for a 1.5 percent bonus through December of this year.

The legislation, which the president signed into law on Dec. 29, replaces the scheduled payment cut inflicted by the flawed sustainable growth rate formula with a 0.5 percent increase in the conversion factor until June. The Centers for Medicare and Medicaid Services uses the SGR to establish the conversion factor used in calculating Medicare reimbursement to physicians.

However, the legislation does not address future physician fee cuts or a continuation of the TC grandfather beyond June, which means Congress will have to act again this year to avoid a cut in Medicare payments to physicians and expiration of the grandfather policy.