MEDICARE AND CLINICAL LABS: What is new for 2010 and 2011

1. MEDICARE AND CLINICAL LABS: What is new for 2010 and 2011 CCLA Annual Meeting San Diego November 3, 2010

2. WE WILL DISCUSS • National and Local Lab Policies • Requesting Reconsideration • Revisiting Documentation Needs • Enrollment and PECOS: Needs for Referring docs to be in system • Tests in Dialysis composite rates • Coverage for New Lab Tests • Meet with CMDs & Others • Thoughts on Pricing & Coding • Q & A

3. NATIONAL COVERAGE DECISIONS • National: NCDs come from CMS • Based on scientific studies & data collected • Presented often at MCAC-open meetings • Notice and comment welcome • Reconsiderations always possible • NCDs cover entire country • May specify services always covered • May specify services never covered • Published in CMS Coverage Manual • May change as science changes, new studies emerge, or as laws change. • Reconsiderations always possible

4. LOCAL COVERAGE DECISIONS • Local: LCDs from 1 or more states/areas • Written by local CMDs about situations that are data based & need control or educational instruction • Presented at state CACs open to medical and specialty societies representatives • Presented at open meetings to all comers • Notice and comment always welcome • Reconsiderations always possible • LCDs cover a Medicare Jurisdiction (e.g., J-1) • Discuss and describe medical necessity • Usually give codes & conditions for payment but that information in accompanying articles • May state frequency of service and diagnoses and always published locally and nationally • Reconsiderations always possible

5. HOW LOCAL IS LOCAL? • Jurisdiction Size • Usually 3 or more states • CMS reducing jurisdictions from 15 to 10 in next few years • Cooperation within a Contractor • Cooperation of CMDs • CMS tends to prefer sameness of policies across jurisdictions • Recent meeting in Baltimore to make policies more uniform in construction • New jurisdiction transitions make policies similar over time

6. WHEN LOCAL COVERAGE BECOMES NATIONAL • When all tests done is a single laboratory within single state • Home Brew—the test performance does not cross state lines • Does not need FDA approval • All billing from single location • Past 14 day rule • CMS looking again at 14 day rule • With absence of national policy local coverage essentially becomes national coverage

7. LOCAL J1 COVERAGE DECISIONS • Example of J-1 LCDs (Currently 84 “B” LCDs) • Category III codes • Circulating tumor cell assays • Cytogenic studies • Free PSA • Mammaprint • Oncologic in-vitro chemoresponse assays • Oncotype DX • Flow cytometry and immunohistochemistry • Some Part A LCDs (institutional) may also apply • Local articles may also specify lab use without a definite policy---to help with billing and coding • We suggest codes, uses and frequencies • We discuss what we look for in new tests

8. REQUESTING LCD RECONSIDERATIONS • Send in writing to local Contractor (Palmetto) • Specific address for reconsiderations on our web site • Specific address of CMDs • Add supporting scientific evidence • Literature in peer reviewed journals • Expert opinion from credible sources • Guidelines / statements from specialty societies • Results of medium or long term studies • Be specific in requests • CPT, ICD-9, organ systems or special circumstances • Be conscious of vested interests • Contractor must respond in 30 days to valid reconsideration requests

9. REVISITING DOCUMENTATION • Contractors are reviewing lab tests • Includes MACs, CERT, and RACs • What Contractors are finding: • Although signatures on lab slips not required, there must be evidence that tests were ordered and appropriate by treating physician • Chart notes must show intent / reason for test • Test must be reasonable and necessary for diagnosis or therapy • Some lab tests have LCD / NCD with edits • Inadequate documentation by doctor may lead to post-payment denial by CERT or RAC

10. ORDERING-/-REFERRING RULES FOR MEDICARE • MD Clin. Nurse Specialist • DO Clin. Psychologist • Dental Surgery Nurse Midwife • Dental Medicine Clin. Social Worker • Podiartist Nurse Practitioner • Optometrist Chiropractor • Physician Assistant These providers can order / refer

11. ORDERING PHYSICIAN • All Claims Ordered / Referred Must Have: • NPI of ordering provider • Number in PECOS system • Specialty as listed • Grace Period • Initial: 10/5/09 to 12/31/10 warning message on remittance • ACA Reform: 6/04/10 and after: claim rejected if referring individual not in PECOS or MAC list • CMS is not enforcing as yet---will enforce sometime before 1/3/11

12. OTHER ENROLLMENT • Revalidation of all physicians not already in PECOS (Provider Enrollment Chain Online System) • Revalidation of some labs & IDTFs • Need to update any changes within 30 days – in PECOS or paper change • Address, phone, suite • New members in group • Other changes • If no claims to Medicare in one year—physician is automatically disenrolled

13. HOW TO TELL IF PROVIDER IS PROPERLY ENROLLED • If referring provider currently not enrolled, you will get a notice on your electronic remittance forms---and remind provider to re-enroll • You can find PECOS enrollees on CMS internet: • http://www.cms.gov/MedicareProviderSupEnroll/06_MedicareOrderingandReferring.asp#TopOfPage • Download in PDF or ZIP form and “search” • Another source from a private company internet site • http://www.oandp.com/pecos/ • This DME company updates files when CMS updates their files

14. ENROLLMENT PROBLEMS PERSIST • Who is not enrolled or re-enrolled in PECOS • Older physicians who have not changed anything • Military, VA doctors, fellows in specialty training • Thousands of physicians still not enrolled • It usually takes 60-90 days to process a new enrollment • This is due to the complexity of enrolling and the need to review all the data and make certain data is not in conflict (e.g., 855i—855r---855c, signatures, etc.) • Please contact your providers not currently in PECOS and encourage them to re-enroll promptly • By Jan 3, 2011 if providers are not enrolled we will reject the lab claim

15. DIALYSIS HAS NEW PROSPECTIVE PAYMENT • New composite rates include: • Additional drugs • Additional lab tests • Quality control items • New rates start 1/1/2011 • Labs will probably re-contract with dialysis facilities when they perform tests in composite rate and no longer separately reimbursable

16. LABS SUBJECT TO CONSOLIDATED BILLING • 82040 Assay of serum albumin • 82108 Assay of aluminum • 82306 Vitamin d, 25 hydroxy • 82310 Assay of calcium • 82330 Assay of calcium, Ionized • 82374 Assay, blood carbon dioxide • 82379 Assay of carnitine • 82435 Assay of blood chloride • 82565 Assay of creatinine • 82570 Assay of urine creatinine

17. LABS SUBJECT TO CONSOLIDATED BILLING • 82575 Creatinine clearance test • 82607 Vitamin B-12 • 82652 Vitamin D 1, 25-dihydroxy • 82668 Assay of erythropoietin • 82728 Assay of ferritin • 82746 Blood folic acid serum • 83540 Assay of iron • 83550 Iron binding test • 83735 Assay of magnesium • 83970 Assay of parathormone

18. LABS SUBJECT TO CONSOLIDATED BILLING • 84075 Assay alkaline phosphatase • 84100 Assay of phosphorus • 84132 Assay of serum potassium • 84134 Assay of prealbumin • 84155 Assay of protein, serum • 84295 Assay of serum sodium • 84466 Assay of transferrin • 84520 Assay of urea nitrogen • 84540 Assay of urine/urea-n • 84545 Urea-N clearance test

19. LABS SUBJECT TO CONSOLIDATED BILLING • 85014 Hematocrit • 85018 Hemoglobin • 85025 Complete (cbc), auto. (HgB, Hct, RBC, WBC, & Platelet) and automated DIFF. • 85027 Complete (cbc), automated (HgB, Hct, RBC, WBC, and Platelet count) • 85041 Automated rbc count • 85044 Manual reticulocyte count • 85045 Automated reticulocyte count • 85046 Reticulocyte/hgb concentration • 85048 Automated leukocyte count • 86704 Hep b core antibody, total

20. LABS SUBJECT TO CONSOLIDATED BILLING • 86705 Hep b core antibody, igm • 86706 Hep b surface antibody • 87040 Blood culture for bacteria • 87070 Culture, bacteria, other • 87071 Culture bacteri aerobic othr • 87073 Culture bacteria anaerobic • 87075 Culturr bacteria, except blood • 87076 Culture anaerobe ident, each • 87077 Culture aerobic identify • 87081 Culture screen only

21. LABS SUBJECT TO CONSOLIDATED BILLING • 87340 Hepatitis b surface ag, eia • G0306 CBC/diff wbc w/o platelet • G0307 CBC without platelet

22. PROBLEM WITH LAB CODES FOR MOLECULAR / GENETICS • Lack of transparency in billing and description of codes • Available code descriptions do not identify the service performed • Methodology-based code descriptions are used in place of the specific test performed • Stacking codes (83890-83914) • Micro-array codes (88384-88386) • Cytogenetic codes (88230-88291)

23. PROBLEM WITH LAB CODES • Using combinations of these codes do not allow us to track what test was actually done • Reimbursing for tests we did not know we were covering---all across the country • AMA CPT is working on at least a partial classification system as we speak, but: • Details uncertain • Two tiers of codes planned • Time frame for publication problematic…even for first tier of codes • New tests using combinations of these codes are appearing weekly and labs are asking for reimbursement

24. Think "VALITILITY" for new molecular / genetic tests THE CONCEPT OF VALIDITY AND UTILITY • Before we cover a new test it must have validity and utility • Validity involves the quality of the test as a test and includes • Sensitivity • Specificity • Reproducibility • Utility is whether the new test gives prognostic or diagnostic information useful for the treating physician in decision making for the patient • Selecting a treatment course • Making a clinical decision (NOT JUST CONFIRMING WHAT IS ALREADY KNOWN)

25. Not always available!! Usually these are earliest papers available!! May take time for societies to release!! CONCEPT OF SCIENCE VERSUS CREATIVE WRITING • We realize true research requires time and significant financial investment---but we need the facts…just the facts • Peer reviewed articles in responsible journals • Double blind, placebo controlled, crossover studies with statistical significant results are the best form of review when available. • Individual case reviews and small groups of patients studied over short periods of time are least convincing • White papers from specialty societies, Tech assessments, advice from clinical experts NOT under financial control of company…all are favorably considered • Requests by individual physicians are variable

26. CONCEPT OF SCIENCE VERSUS CREATIVE WRITING • Sometimes the facts are harder to believe • Internal, unpublished data from inside the company developing the test • Individual case reports that sporadically appear in journals --- often “throw away” journals • Poster sessions and abstracts of a few patients with no real controls • Letters from doctors who want the test but do not have scientific reasons for wanting them • Dr. Jeter will discuss evidence based decision making that Palmetto will use in evaluating new tests

27. MEETING WITH LOCAL MEDICAL DIRECTOR • Palmetto GBA CMDs are very busy • Policies, articles, coverage • Med Review and chart adjudication • Education, outreach to societies / groups • Contact with CMS & other organizations • Transition to new Jurisdiction • Our CMDs will find time for meeting • In Person: office, hotel, other location • Telephone, Web, etc. may be more efficient • Time is always a consideration • Send info, data, literature in advance • Allows CMDs to be prepared, shortens meeting, allows quicker resolution • Must fit between CMDs travel, outreach, teleconferences with CMS and home office • PLEASE Send info, data, literature in advance !! It saves everyone time

28. HELP US WITH PRICING • Show us the pricing if test is contractor priced • Prefer single pricing vs code stacking • Reality versus imagination: • What is included in pricing • What should not be included • Can it be cross walked to existing CPT codes • Easier to determine prices • May use NOC codes at first to describe its use • We will compare prices to similar tests • If new test we need to perform GAP Filling • We will need steps to perform test • We will need prices of supplies and work • We will need price per test or per group of tests • We do not pay for standards, duplicates, and controls for each test Medicare cannot pay for the development of new tests

29. QUESTIONS THAT SOMETIMES CONFOUND ME • Is this a ME TOO TEST • Companies marketing very similar but not identical tests • Should we cover all or only the “best” ? Is it the science or the marketing of the test that determines use • Does this replace an earlier test? If so should we only cover one test or the other but not both • Does it give new information or rehash old and re-confirm what a doctor already knows • Do physician practitioners really know if one test is better than another without valid CER (Comparative Effectiveness Research) It is rare to have head to head competition between tests

30. BUT WE DO HAVE EXPERTS TO HELP US • Dr Jeter, out in house CMD and PATHOLOGIST • Experts from the molecular genetics field • Experts from the California Association of Pathologists • And we hope you would be our experts too! Thank you!! Do you have any questions?