ACLA: American Clinical Laboratory Association

ACLA Delivers Lab ‘Results’ for Members

The American Clinical Laboratory Association (ACLA) is THE voice for clinical laboratories, and an effective advocate before federal and state government. Following are highlights of ACLA’s record of achievement on behalf of the laboratory industry.

1. Competitive Bidding - Repealed

2. Laboratory Developed Tests - Legislative Language Averted

3. "POD" Labs

4. HHS OIG “Excess Charge” Proposed Rule Withdrawn

5. FDA Guidance on In Vitro Diagnostic Multivariate Index Assays

6. Flow Cytometry Services Restored

7. CMS Narrows and Delays "Medically Unlikely Edits” (MUEs)

8. TC "Grandfather" Provision Extended

9. Medicare Lab Co-Pay Dropped

10. Success on State Issues: Florida, New Jersey, New York, Pennsylvania

11. Health Information Technology (IT)

12. ACLA Active in CPT Coding Development/Revisions

13. ACLA Raises Concerns on MedPAC Lab Value Requirement

14. MedPAC Delays Recommendations on Lab Services

15. Medicare “Claims Processing Fee” Withdrawn

16. Path Change Request Rescinded

1. Competitive Bidding

On July 15th, the House and Senate voted overwhelmingly to override the President’s veto of “The Medicare Improvement for Patients and Providers Act of 2008”. The law includes three key provisions sought by the laboratory community: Total repeal of the laboratory competitive bidding demonstration project, extension of the so called “TC grandfather clause” for 18 months and reversal of a 10.6% reduction in the physician fee schedule. ACLA led efforts in opposing the Medicare competitive bidding demonstration project for laboratory services. ACLA effectively communicated the many reasons why laboratory services should not be competitively bid in Medicare and is a leader in an effort to urge Congress to repeal the demonstration project.

2. Laboratory Developed Tests

Senators Ted Kennedy (D-MA), Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Senator Barack Obama (D-IL), member of the Senate HELP Committee, have introduced in the first session of the 110th Congress legislation that would strengthen oversight of laboratory developed tests (LDTs). ACLA opposed Senator Kennedy’s legislation (S.736) because of concerns that it would stifle innovation for patient care and supported Senator Obama’s legislation (S.976). ACLA successfully signed on with 25 other organizations asking Senator Kennedy to allow more time for stakeholder discussion on his bill. ACLA worked with Senator Obama's office to include a provision in legislation to reauthorize FDA user fee programs that would require HHS to fund an Institute of Medicine study on the oversight of genetic tests unless the Secretary’s Advisory Committee on Genetics Health and Society (SACGHS) completed their report on genetic test oversight. That bill was passed by Congress and signed by the President in October, 2007. SACGHS did complete their report in February 2008. The report identified a gap in oversight related to clinical validity and their belief that it is imperative to close this gap as expeditiously as possible. The report further called for a genetic test registry to be informed by a stakeholders meeting in 2008 to assist in identifying the lead HHS agency and in determining the data elements to be included in such a test registry. ACLA has finalized and submitted to the agencies a model for the regulatory oversight of genetic tests. The key elements are that it maintains CMS as the agency with direct regulatory oversight and enforcement over laboratory test services and provides a clearly defined consultative role for FDA in clinical validity review.

3. "POD" Labs

ACLA is in the forefront of efforts to raise concerns about abusive pathology arrangements known as “PODs” or “Condo Labs.” These are contractual agreements allowing non-pathology clinicians and physician groups to bill for pathology services, for their own patients, in which they do not have active involvement in the pathology services. The Centers for Medicare and Medicaid Services has incorporated concerns expressed by ACLA in proposed changes to the rules on reassignment. CMS proposed changes to the reassignment provisions and said it would consider whether or not there should be an anti-markup provision on the professional component of testing. CMS also proposed a change in the definition of “centralized building” under the physician self referral provisions. These changes were delayed because of a law suit by several urology group practices. The judge recently ruled in favor of the government and the proposed changes will move forward. ACLA has now reinstituted meetings with CMS to discuss additional changes to the In Office Ancillary Services exception of the Stark rules to completely eliminate the opportunity for perverse incentives related to utilization.

4. HHS OIG “Excess Charge” Proposed Rule Withdrawn

A proposed rule by the Health and Human Services (HHS) Office of Inspector General (OIG) was withdrawn in June 2007 which would have potentially exclude Medicare providers, including labs, from the Medicare program for submitting claims containing “excessive charges.” Excessive charges could include a single CPT code for which Medicare pays more than 120 percent of customary and usual charges. ACLA led opposition to this rule on behalf of the laboratory industry and submitted comments on the proposal. It also asked Ernst & Young to compile a survey of ACLA members comparing Medicare, Medicaid, and third party reimbursements - which showed that Medicare and Medicaid on average pay significantly less than third party payers. ACLA met with the HHS OIG office of legal counsel to deliver the results of the survey. No final rule has been promulgated.

5. FDA Guidance on In Vitro Diagnostic Multivariate Index Assays

On September 7, 2006, the Food and Drug Administration (FDA) published draft guidance on In Vitro Diagnostic Multivariate Index Assays (IVDMIAs), requesting comments within 90 days. The guidance creates a new approach to “medical device” regulation for IVDMIAs, and FDA has said it will require premarket review for certain laboratory-developed tests that combine assays and algorithms to produce results tailored to a specific patient. ACLA successfully requested FDA to extend the January 5, 2007 deadline for comments, as well as that further meetings between the laboratory industry and FDA be held before a final guidance is issued. Over 300 representatives were present at the February 8, 2007 FDA public meeting on IVDMIAs. In its statement, ACLA indicated support for the goal of the draft guidance – namely, to dispel the existing confusion and lack of clarity regarding FDA’s regulatory approach toward certain laboratory-developed tests. However, ACLA noted that the Guidance Document falls short of achieving the goal, and asked FDA to proceed with formal rulemaking. An updated draft guidance was issued by FDA in July 2007. ACLA filed additional comments proposing a regulatory model for IVDMIA oversight. An important aspect of the model is an interagency Memorandum of Understanding defining a significant consultative role for the Food and Drug Administration while maintaining the Centers for Medicare and Medicaid Services and CLIA as the exclusive regulatory authority for laboratory test services.

6. Flow Cytometry Services Restored

The final 2007 Physician Fee Schedule, published by the Centers for Medicare and Medicaid Services (CMS) on November 1, 2006, included a number of provisions affecting clinical laboratories and pathology services. Of particular note, CMS accepted all of ACLA’s recommendations for revisions to the technical component of flow cytometry services. This action partially restores payment for these critically important patient services (increases between 14 and 25 percent despite the imposition of budget neutrality reduction adjustments) and comes as a result of a two-year history of ACLA meetings and dialogue with senior CMS officials. Following the significant payment reductions announced in 2004, ACLA presented CMS with updated information derived from laboratory members performing flow cytometry services. The data detailed clinical staff time involved with the procedure, as well as additional equipment and supply items. The data submitted by ACLA resulted in partial restoration of the flow cytometry payment.

7. CMS Narrows and Delays "Medically Unlikely Edits” (MUEs)

The Medically Unbelievable Edits [now renamed Medically Unlikely Edits (MUEs)] program is intended to identify obvious billing errors and to prevent erroneous Medicare billing claims by placing a unit of service limitation on each CPT code. The Centers for Medicare and Medicaid Services (CMS) is implementing MUEs in multiple quarterly phases. When the MUE program was first announced in late 2005, ACLA was one of the first to meet with CMS to raise concerns, among them that the proposed unit of service edits for pathology and clinical lab medicine were inconsistent with accepted medical practice, needed clearer explanation of the selection criteria, should include the opportunity to appeal the proposed edit, and, if implemented, would have negative healthcare consequences for Medicare recipients. Following multiple meetings and communication with CMS, ACLA learned that no laboratory or pathology codes would be included in the January 2007 Phase I edits, and that edits will be phased in beginning with a small set of non-controversial anatomical edits. ACLA has now provided comment on the complete series of proposed MUEs and provided the recommendation that all final MUEs should be made public.

8. TC "Grandfather" Provision Extended

ACLA and a coalition of other health care providers were successful in including in the "Medicare Improvement for Patients and Providers Act of 2008" a provision extending the so-called “technical component grandfather clause” through the end of calendar year 2009 . Using the grandfather clause, Medicare has permitted independent laboratories to bill and receive direct payments from Medicare for both specimen preparation (also known as the technical component of the service) and the diagnosis (known as the professional component) of hospital patient specimens. CMS has sought to discontinue paying labs separately for the technical component but Congress has repeatedly extended the provision. ACLA continues to seek legislation that will provide a permanent TC extension.

9. Medicare Lab Co-Pay Dropped

ACLA was the leader in the successful battle to eliminate a 2003 legislative provision that would have cut the Medicare lab fee schedule by 20 percent and require labs to try to make up the loss by billing and collecting a 20 percent co-pay from Medicare beneficiaries. The provision passed the Senate and was on its way to passage in the House until ACLA mounted a major advocacy campaign to stop it. Congress dropped the provision in November 2003, and ACLA has successfully kept the provision from being reintroduced.

10. Success on State Issues: Florida, New Jersey, New York, Pennsylvania

Florida

- A proposal by the Florida Agency for Health Care Administration (AHCA) to pick a single laboratory winner for Florida from the 100 laboratories providing services to Medicaid was withdrawn twice in the face of a May 2005 campaign by ACLA. ACLA led the opposition to the Invitation to Negotiate, filing administrative challenges to the proposal and coordinating a legislative advocacy campaign. ACLA led the challenges to the Florida proposal, and was the leader in the successful fight to defeat legislation in the Florida legislature that would have given AHCA carte blanche authority to implement competitive bidding. - In June 2004, ACLA testified before the Florida Board of Clinical Laboratory Personnel opposing a proposal requiring cytotechnologists to obtain a baccalaureate degree in cytotechnology. ACLA urged adoption of CLIA requirements. The Board rejected the B.A. proposal.

New Jersey

In June 2004, ACLA testified before the New Jersey Senate Committee on Health in opposition to legislation requiring pathologists to review and certify as accurate all cervical cancer screening specimens, including negative results. Following the hearing, the committee voted unanimously to revise the legislation to require random re-screening of 20 percent of negative results by a cytotechnology supervisor.

New York

ACLA raised concerns through comments and discussions with New York state officials with what ACLA considered overly broad proposed “quality assurance standards” for genetic tests. The proposal was withdrawn in the fall of 2004.

Pennsylvania

A proposal to impose co-pays on Pennsylvania Medicaid and General Assistance beneficiaries for laboratory services was not included in the final budget adopted in early July 2005 by the Pennsylvania State legislature. The Pennsylvania Governor’s budget for 2006, introduced in February 2005, would have imposed co-pays on laboratory tests. ACLA and other laboratory groups opposed imposition of the co-pay and worked to defeat it.

11. Health Information Technology (IT)

ACLA Takes Lead Role for Lab Community

ACLA is a leader for the lab industry in promoting lab interests as the government and outside groups develop health care IT interoperability standards. ACLA is positioned on important health care IT boards and coalitions, as well as having a working relationship with key government officials.

Standards for Electronic Transmission of Health Data

In a public statement before the American Health Information Community (AHIC) on October 31, 2006, ACLA provided alternatives to the work of the Health Information Technology Standards Panel (HITSP) in the area of laboratory results reporting for both recommending a standard not currently utilized anywhere within the United States and forsaking a viable alternative in the EHR-Lab Interoperability and Connectivity Specifications (ELINCS). Part of the ELINCS effort also included finding a long-term home for the specification – and one which was not vendor-dominated. On December 19, the California HealthCare Foundation announced that ELINCS would be adopted and maintained by HL-7, the preferred organization among laboratory companies to adopt the standard.

National Provider Identifier

On January 16, 2007, ACLA requested CMS to permit the continued use of legacy identifiers in both electronic standard transactions and paper transactions for one year beyond the current compliance date of May 23, 2007. Without a contingency plan, potential disruptions in claim processing due to a lack of NPI readiness throughout the health care industry could threaten access to lab services to millions of patients. In March 2007, ACLA published its HIPAA National Provider Identifier White Paper, Impact of the NPI on the Independent Laboratory Industry. The purpose of the paper is to provide an educational review of key topics and issues relevant to the independent lab industry as the NPI replaces existing identifiers.

12. ACLA Active in CPT Coding Development/Revisions

ACLA is an active participant in the development, revision and payment of CPT codes for laboratory tests. ACLA’s CPT Committee works with the Pathology Coding Caucus, which develops consensus recommendations for the AMA’s CPT Editorial Panel for new code applications. ACLA provides recommendations to CMS for payment for new CPT codes at a public meeting each summer and then comments on the payment recommendations from CMS.

13. ACLA Raises Concerns on MedPAC Lab Value Requirement

In January 2005, the Medicare Payment Advisory Commission (MedPAC) passed a recommendation to Congress that would require labs to submit all laboratory values on claims submitted to Medicare. ACLA met with MedPAC Executive Director Dr. Mark Miller to express concerns, as well as sharing those concerns with key members of Congress. No further action of this nature has occurred.

14. MedPAC Delays Recommendations on Lab Services

ACLA met in March 2006 with the Executive Director of the Medicare Payment Advisory Commission (MedPAC) to present the findings from an independent report on Trends in Medicare Laboratory Testing Services, which showed that any increase in laboratory utilization was consistent with medical practice guidelines. The report sponsored by ACLA and the American Association of Bioanalysts, the American Society for Clinical Laboratory Scientists, AdvaMed, and the Clinical Laboratory Management Association was prepared by Dr. Chris Hogan, Ph.D. At the meeting Dr. Mark Miller, MedPAC Executive Director, stated his appreciation of the study information. He further stated that any recommendations on lab services would be presented to the Commissioners no sooner than March 2007. No lab recommendations have been submitted by MedPAC as of March 2008.

15. Medicare “Claims Processing Fee” Withdrawn

ACLA successfully urged the removal of a costly “claims processing fee” from a September 2004 bill moving through the U.S. House that would have created a $5 fee for each Medicare claim returned for “completion or correction.”

16. Path Change Request Rescinded

ACLA contacted CMS in January 2005 regarding a Change Request for “Independent Laboratory Billing for the Technical Component of Physician Pathology Services Furnished to Hospital Patients.” The notice appeared to change the application of the covered entity to the laboratory so that the individual laboratory would have needed to have the arrangement with the hospital. CMS advised ACLA that this was not their intention and rescinded the change request.