Reassignment and Physician Self-Referral Letter to CMS
TO: PSA Affiliated Practices
FROM: John R. Outlaw,CHC, PSA Chief Compliance Officer
RE: Reassignment and Physician Self-Referral Letter to CMS
On Monday October 9, 2006 PSA mailed the below letter to Mark B. McClellan, M.D., Administrator, Centers for Medicare & Medicaid Services, Department of Health and Human Services, regarding changes to the Medicare reassignment and physician self-referral rules. PSA is continuallly working with CAP to build support for the prohibition of Pods, Condos, and Anatomic POL's.
PSA will also be covering this topic at the 2006 Pathology Business Conference in Amelia Isand, FL. To learn more about this meeting visit www.psapath.com.
Dear Dr. McClellan:
Pathology Service Associates, LLC (PSA) wishes to offer the following comments on changes to the Medicare reassignment and physician self-referral rules as proposed in the “Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2007 and Other Changes to Payment Under Part B”, CMS-1321-P (71 Fed. Reg. 48982, August 22, 2006). PSA is a business support service company for independent practices of pathology, providing billing and other back-office solutions for some 380 pathologists in 24 states. Unfortunately, we have seen that very independence which we seek to preserve as a highly-valued and necessary element in providing high-quality patient care threatened in recent years. A variety of schemes have been carefully crafted to subvert the intent of Medicare policy by circumventing the very laws, rules and regulations meant to constrain them. Therefore, we applaud CMS’ latest proposed changes designed specifically to curb the recent growth of these so-called “pod” or “condo” laboratories.
Perhaps more important, however, we encourage CMS to take aggressive action now to fend off a newer, and perhaps larger, threat to the truly independent practice of pathology, which has appeared recently in the form of in-office (POL) anatomic pathology labs. These labs are a result of the various warnings and prohibitions against the pod labs, crafted specifically to achieve “technical” compliance with the in-office ancillary exception and other Medicare laws, rules and regulations. These anatomic POL’s still pose the same threat in the form of economic incentives and therefore the potential for abuse in the increased utilization of anatomic pathology services.
While we are generally supportive of CMS’ efforts to restrict the various contractual joint ventures which threaten independence of the pathology industry, we believe that continuing to address this issue through various technical requirements, however well-thought and intended, will have little practical long-term impact. As long as anatomic pathology services continue to be viewed as a potential new source of revenue for certain specialty physician practices, permitting them to profit from their own self-referrals, they will find a way to circumvent the technical requirements of the law.
For that reason, we believe that the most effective means of addressing this threat is to exclude anatomic pathology services from the in-office ancillary services exception. We believe this will effectively eliminate the financial incentives that create the most significant threat of fraud and abuse in the program, while preserving the ability of physicians to provide these necessary services for the care of their patients, as purchased services under existing regulations. To that end, we ask CMS to work with the College of American Pathologists (CAP) to develop appropriate regulatory language that will deal more directly with the root cause of the current abuse in the pod and anatomic POL schemes by removing the financial incentive currently associated with the self-referral for anatomic pathology services.
Thank you for the opportunity to provide these comments.
Respectfully,
John R. Outlaw, CHC
Cheif Compliance Officer
Pathology Service Associates, LLC