U.S. Legislative/Regulatory News

1. House Passes Medicare Bill with Competitive Bidding Repeal

On Tuesday, June 24, 2008, the House passed the “Medicare Improvements for Patients and Providers Act of 2008 (HR 6331).” The legislation was introduced by House Ways and Means Committee Chair Charles Rangel (NY) and Energy and Commerce Committee Chair John Dingell (MI).  Based on S. 3101 introduced in early June by Senate Finance Committee Chair Max Baucus (MT), HR 6331 contains a provision to repeal the competitive bidding demonstration project for clinical laboratory services.

The bill was passed under “suspension of the rules,” a procedure generally used to quickly pass non-controversial legislation. Bills considered under suspension of the rules require a two-thirds majority vote, or 290 votes, to pass. HR 6331 passed by a surprisingly solid vote of 355-59.

In addition to a provision to permanently repeal competitive bidding, HR 6331 also reduces the Consumer Price Index (CPI) payment update for clinical laboratory services by 0.5 percent for the next five years. Clinical laboratory services are currently under a five year freeze scheduled to end December 31, 2008.

With Congress looking for savings and to craft a very narrow and specific bill, the best way to ensure that repeal of competitive bidding is part of any Medicare bill to also include a “pay for.”  This “pay for” will be applied by reducing the CPI update by 0.5 percent for the next five years, totally $600 million.

By spreading the $600 million “pay for” out over five years and only taking a 0.5 percent reduction each year, clinical laboratories will receive a CPI update each year for the first time since 2004, while at the same time permanently eliminating the threat of the current competitive bidding demonstration project. Our intelligence indicates that even opponents of repeal for competitive bidding will not block it due to the included savings.

HR 6331 also includes:

• A provision to block a scheduled  10.6 percent cut to the physician fee schedule through December 31, 2008, and a 1.1 percent update in 2009

• An 18 month extension of the “Grandfather Clause,” which would allow Medicare reimbursement for the technical component (TC) for pathology services provided to a “covered” hospital to continue to be paid to the laboratory providing the service instead of the hospital. “Covered hospitals” are defined as those having an arrangement with an independent laboratory that was in effect as of July 22, 1999.

• A provision that allows Critical Access Hospitals (CAHs) to receive 101 percent of reasonable costs for laboratory services regardless of whether the specimen is collected in the hospital or off site.

• An 18 month delay of the competitive bidding program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS).

HR 6331 is largely funded by reductions to Medicare Advantage (MA). The White House has consistently stated it will not support cuts to MA. The Bush Administration immediately released a statement opposing the bill and again threatened a veto. With the 355-59 vote, the House theoretically has 65 more votes than the two-thirds majority needed to override a veto.

Meanwhile, according to Washington insiders Senate Finance Committee Chair Max Baucus (MT) and Ranking Member Charles Grassley (IA) have reached agreement on Medicare legislation. Both Senate Republicans and Democrats have made attempts in recent weeks to move bills.  On June 12, 2008, S 3101 introduced by Senator Baucus failed by six votes (54-39) to achieve the 60 votes needed overcome a Republican filibuster. Last week Minority Leader Mitch McConnell (KY) had attempted to move a Republican version of Medicare legislation by requesting unanimous consent. Senate Majority WHIP Dick Durbin (IL) objected and the measure failed. Repeal for competitive bidding is included in both the Democratic and the Republican bills, and will likely be included in any compromise.

The situation remains extremely fluid. Although a compromise had been reached, as of this writing the Senate is now expected to instead consider HR 6331 on Thursday, June 26, 2008.

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2. Competitive Bidding Action Alert Update:
Please Act Now!

As stated above, the House has passed HR 6331 that includes a repeal of the competitive bidding demonstration project, and the Senate is poised to vote on HR 6331 legislation today, June 26, 2008.

It is critical to ensure passage of this important bill (HR 6331) to repeal competitive bidding. In addition to our continued overall grassroots campaign, we are asking CLMA members in Mississippi, North Carolina, Ohio, Virginia and New Mexico to contact the following Republican Senators to increase bipartisan support:

Senator Roger Wicker (MS); http://wicker.senate.gov/public/

Senator Thad Cochran (MS); http://cochran.senate.gov/

Senator Richard Burr (NC); http://burr.senate.gov/public/

Senator George Voinovich (OH); http://voinovich.senate.gov/public/index.cfm

Senator John Warner (VA); http://warner.senate.gov/public/
Senator Pete Domenici (NM); http://domenici.senate.gov/.

Please call or email immediately and convey the following:

“Dear Senator ___________:      I am [name], [title} at [laboratory name and location] which provides important laboratory services to Medicare beneficiaries in your state.   I am writing to urge that you vote for cloture and passage of the “The Medicare Improvements for Patients and Providers Act of 2008” (HR 6331) when it comes before the Senate this week.

Passage of HR 6331 is urgently needed to repeal the laboratory competitive bidding demonstration project, stop a 10.1% reduction in the Physician Fee Schedule slated to take effect June 30, and extend the so-called technical component grandfather clause – all vitally important issues for laboratories and for the Medicare beneficiaries who depend on these services.

The repeal of the laboratory competitive bidding demonstration project is a provision that has bipartisan support – repeal legislation was sponsored by Senator Salazar and Senator Roberts (S. 2099).    This ill conceived project imposes unworkable requirements, ignores the complexity of laboratory services and threatens the quality of, and access to, laboratory services. 

Again, we strongly urge a “yes” vote for cloture and final passage of HR 6331.”

Thanks to all CLMA members for your support!

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3. Court Grants CMS Extension to Respond to Competitive Bidding Lawsuit

The United States District Court for the Southern District of California has granted the Centers for Medicare and Medicaid Services (CMS) a motion to continue the deadline for filing a response to the competitive bidding lawsuit filed in San Diego.

On April 8, 2008, United States District Judge Thomas J. Whelan granted a preliminary injunction (PI) blocking implementation of the competitive bidding demonstration project in the San Diego-San Marcos-Carlsbad Metropolitan Statistical Area (MSA).

The original lawsuit was filed by Sharp HealthCare, Scripps Health, and Internist Laboratory of Oceanside against U.S. Department of Health and Human Services (HHS) Secretary Michael Leavitt on January 29, 2008. The Clinical Laboratory Coalition (CLC), of which CLMA is an active member, fully supports the lawsuit.

As part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, CMS chose the San Diego area as the first of two demonstration project sites to test competitive bidding for the procurement of clinical laboratory services.  Those laboratories that did not win the bid could not bill for reimbursement of Medicare clinical laboratory services for the three-year duration of the project.  Rather than creating competition, it would result in fewer laboratories, less competition and the government in essence picking winners and losers.

CMS had already accepted bids on laboratory services and was about to announce bid winners on April 11, 2008. Judge Whelan’s order granting a PI means that CMS cannot proceed with implementation of the demonstration project in San Diego, cannot announce the winning bidders, and cannot disclose information on any bids submitted. The injunction will stay in place until further order of the court.

CMS originally had 60 days to respond with a due date of June 9, 2008. As a result of the Court order granting the extension, CMS’ response is now due on August 8, 2008.

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4. CMS Announces Public Meeting for New 2009 CPT Codes

In the June 13, 2008 Federal Register, CMS announced a public meeting to discuss payment determinations for new 2009 Current Procedural Terminology (CPT) codes for clinical laboratory tests. The meeting is scheduled for Monday, July 14, 2008 from 9:00 a.m. - 2:00 p.m. (EDT) and will be held in the CMS Auditorium in Baltimore, Maryland.

CMS holds the meeting in accordance with section 1833 (h) of the Social Security Act and section 531 (b) of the Medicare, Medicaid and SCHIP Benefits Improvement Protection Act of 2000 (BIPA), Pub. L. 106-554.  BIPA mandated procedures that permit public consultation for payment determinations for new clinical laboratory tests.

Also, section 942 of the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173)” requires CMS to establish procedures to determine payment for laboratory tests assigned a new or substantially revised HCPCS code on or after January 1, 2005.

Specifically, CMS is required to publish a list of the new tests needing payment determination on the Internet or through some other appropriate avenue of communication, and then publish a notice in the Federal Register announcing a public meeting. This public meeting is designed to hear comments from stakeholders regarding recommendations as to payment methodology for each new test, that is, gap-fill versus crosswalk.

CMS must also publish its final payment determinations to the public with the criteria for making the determination and the data used to make that determination.

Over the past several years, CMS has held public meetings announced in the Federal Register to hear input on new laboratory tests and has published the results of that input and the agency’s decisions. CLMA has participated in all of these public meetings. The announcement published in the June 13, 2008 Federal Register marks the eighth such public meeting, and CLMA intends to attend this year’s meeting and present comments as described below.

The specific purpose of the July 14, 2008 meeting is for stakeholders to make recommendations on the assignment of payment levels for new CPT codes to be included in the 2009 Clinical Laboratory Fee Schedule, effective for services starting January 1, 2009.

The codes for consideration for the 2008 meeting are:

(Please note that numbering of codes has not yet been finalized)

Pathology and Laboratory

Chemistry

            8372X Myeloperoxidase (MPO)

            8395X Oncoprotein; des-gamma-carboxy-prothrombin (DCP)

Hematology and Coagulation

            85XXX Coagulation and fibrinolysis, functional activity, not otherwise                    specified (e.g., ADAMTS-13), each analyte

Immunology

Microbiology

            879XX  Infectious agent enzymatic activity other than virus (e.g.,                             sialidase activity in vaginal fluid)

In Vivo (e.g., Transcutaneous) Laboratory Procedures

            8872X  Bilirubin, total, transcutaneous

            8874X1 Hemoglobin, quantitative, transcutaneous, per day;                                                   carboxyhemoglobin (For in vitro carboxyhemoglobin                                      measurement, use 82375)

            8874X2 Hemoglobin, quantitative, transcutaneous, per day;                                       methemoglobin (For in vitro quantitative methemoglobin measurement, use 83050)

(88400 has been deleted. To report, use 8872X)

Interested parties are invited to make oral presentations and/or to submit written comments directed toward technical issues relating to payment determinations for the new codes. Participants are to provide expert input on the nature of the clinical laboratory tests, and make individual recommendations as to whether the new codes should be cross-walked or gap filled to determine payment. The development of the codes, largely performed by the AMA CPT Editorial Panel, will not be discussed as part of the public meeting.

In the 2007 physician fee schedule (PFS) final rule, CMS formally codified the process for determining payment for new clinical laboratory tests through public input, and for the first time there are specific requirements regarding input on payment for new laboratory codes. Presenters at the public meeting should address the following six items:

1. New test code(s) and descriptor
2. Test purpose
3. Test method
4. Costs
5. Charges
6. Payment determination (crosswalk or gapfill) with rationale

Presentations that do not address all six items may be deemed incomplete and may not be considered by CMS in making a payment determination for the new code unless the missing information is provided within 15 days (July 29 , 2008) following the meeting.

A summary of the new codes, the payment recommendations from the July 14, 2008 public meeting, and CMS’ tentative payment recommendations will be posted at http://www.cms.hhs.gov/ClinicalLabFeeSched by early September 2008. Final written comments on the tentative payment determinations will be accepted until September 19, 2008. 

Final payment determinations will be posted on the CMS web site in October 2008.

Beginning June 16, 2008, registration for the July 14, 2008 public meeting may be completed online at http://www.cms.hhs.gov/ClinicalLabFeeSched. 

The deadline for registration is July 9, 2008

To access the Federal Register announcement of the public meeting, please visit  http://www.access.gpo.gov/su_docs/fedreg/a080613c.html.

Scroll to “Centers for Medicare and Medicaid Services,” “Notices” and then “Meetings

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5. CMS Announces MAC for Jurisdiction 7 (J7)

CMS has announced that Pinnacle Business Solutions, Inc. (PBSI) has been awarded a contract of up to five years to serve as the Part A/Part B Medicare Administrative Contractor (A/B MAC) for Jurisdiction 7 (J7). J7 includes Arkansas, Louisiana and Mississippi.  PBSI is based in Little Rock, Arkansas. Some operations will also be performed in Jackson, Mississippi; Baton Rouge, Louisiana; and Monroe, Louisiana offices.

Section 911 of the “Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) requires the Secretary of Health and Human Services (HHS) to implement Medicare Contracting reform by 2011.

This reform is intended to standardize contracting principles by introducing competition and performance incentives. Through open competition, A/B MACs will perform the functions of, and will replace current Fiscal Intermediaries and Carriers. The A/B MACs will be a provider’s primary point of contact and will receive, process, and pay all Medicare claims for both Part A and Part B. The full fee-for-service workload is scheduled to be transitioned over to the A/B MACs by October 2009.

PBSI will take over processing claims for the following Fiscal Intermediaries (FIs) and Carriers:

• Cahaba GBA (Carrier for Mississippi)
• Mutual of Omaha Insurance Company (FI for some providers in Arkansas, Louisiana, and Mississippi)
• Pinnacle Business Solutions, Inc. (FI and Carrier for Arkansas; Carrier for Louisiana)
• TriSpan (Blue Cross and Blue Shield of Mississippi) (FI for Louisiana and Mississippi)

The A/B MAC contract is valued at $178 million over five years. It includes a base period and four one-year options that will provide PBSI with the opportunity to earn award fees based on the ability to meet or exceed performance standards set by CMS. All MAC contracts will be recompeted every five years. PBSI will immediately begin transition activities and will assume full responsibility for processing claims in Arkansas, Louisiana, and Mississippi by February 2009.

PBSI is the eighth A/B MAC contractor named by CMS to date.  Previous awards include the following:

• J3 (Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming)- Noridian Administrative Services, LLC (NAS)
• J4 (Colorado, Oklahoma, New Mexico, and Texas)- Trailblazer Health Enterprises (Trailblazer)
• J5 (Iowa, Kansas, Missouri and Nebraska)- Wisconsin Physician Service Health Insurance Corporation (WPS)
• J12 (Delaware, Maryland, New Jersey, Pennsylvania, and the District of Columbia) - Highmark Medicare Services, Inc.
• J1 (California, Hawaii, Nevada, American Samoa, Guam and the Northern Mariana Islands) - Palmetto GBA
• J13 (Connecticut, New York)-National Government Services (NGS)
• J 2 (Alaska, Idaho, Oregon and Washington)

Under the Cycle Two acquisition process, on August 31, 2007, CMS issued RFPs for the following:

• J8 (Indiana, Michigan)
• J9 (Florida, Puerto Rico, U.S. Virgin Islands)
• J10 (Alabama, Georgia, Tennessee)
• J6 (Illinois, Minnesota, Wisconsin)
• J11 (North Carolina, South Carolina, Virginia, West Virginia)
• J14 (Maine, Massachusetts, New Hampshire, Rhode Island, Vermont)
• J15 (Kentucky, Ohio)

For more information on Medicare Contracting Reform and the transition to A/B MACs, please visit http://www.cms.hhs.gov/MedicareContractingReform/.

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6. Joint Commission Announces 2009 National Patient Safety Goals

On June 17, 2008, the Joint Commission announced the 2009 National Patient Safety Goals and related requirements for each of its accreditation programs  and Disease-Specific Care Certification Program. The goals apply to more than 15,000 Joint Commission-accredited and –certified health care organizations and programs.

The major changes for 2009 are three new hospital and critical access hospital requirements to prevent deadly infections that are due to multiple drug-resistant organisms (MDROS), central line bloodstream infections, and surgical site infections. These new requirements will have a one-year phase in period with defined milestones. Full implementation is expected by January 1, 2010.

Other changes to the National Patient Safety Goals include as requirement to eliminate transfusion errors related to patient misidentification in hospitals, critical access hospitals, ambulatory care facilities and office –based surgery practices. New requirements in several programs focus on engaging patients in their healthcare related to infection control, prevention of surgical adverse events, and the patient identification process.

First introduced in 2003, the development, annual review and modification of the National Patient Safety Goals are the responsibility of the Sentinel Event Advisory Group. This panel includes widely recognized patient safety experts, nurses, physicians, pharmacists, risk managers and other professionals with hands-on experience with patient safety in hospitals and other health care settings. The Joint Commission works with the panel to conduct an annual systematic review, including the identification of potential new goals, and seeks input from practitioners, providers, organizations, purchasers, consumer groups and others. The Joint Commission’s Board of Commissioners approves the goals and requirements each year.

To read the 2009 National Patient Safety Goals, including those specific to the clinical laboratory, please visit http://www.jointcommission.org/PatientSafety/NationalPatientSafetyGoals/.

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EDUCATION NEWS

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And, as an added bonus, you are charged the same single phone line rate regardless of how many people participate.

We encourage you to visit the audioLab Web site to learn more about this exciting learning opportunity.

Register Today!

New:              Best Practices for Bedside Bar Code Labeling
                        Tuesday, July 15 / 2:00 PM – 3:30 PM, ET

UPDATE!      Town Hall audioLab rescheduled to

Tuesday, July 23, 2008 2:00 PM - 3:30 PM, ET

Did you know? 

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