Mr. Marc Hartstein
Director, Hospital and Ambulatory Policy Group
Centers for Medicare and Medicaid Services
Mail Stop C4-01-26
7500 Security Boulevard
Baltimore, MD 21244
RE: Gapfilling for Molecular Pathology Tests
I am writing on behalf of ACLA to follow-up on our prior conversations regarding the gapfilling process for new molecular pathology codes, which CMS has mandated. As you know, in the past, ACLA has raised concerns about the fairness and transparency of the gapfilling process. Last month, in a letter to Center for Medicare Services Director Jon Blum, we again expressed our concerns about the way the gapfilling exercise was proceeding and the lack of transparency in the process. In our previous discussions, both you and Jon Blum urged us to give the process time to play out before taking any action. It now has been five months since the decision to use gapfilling for the new codes was announced. Based on our interactions with the contractors who are pricing the tests, we continue to have the same concerns about the fairness and transparency of the process. As a result, we are requesting the opportunity to meet with you and your staff to discuss our specific recommendations: i.e., (1) CMS should instruct contractors to make available their data and methodologies to show how they arrived at their pricing determinations, and (2) CMS should convene an “Open Door Forum” to review the price-setting process for the remainder of the year and to respond to the numerous questions that have arisen.
As you will recall, the new pathology codes were added to the CPT Manual for 2012, but CMS delayed their implementation for a year so that it would have time to determine how best to implement them. During that process, ACLA urged CMS to use a cross-walking process to establish prices for the new molecular pathology codes, largely because it is the simplest and most transparent method for pricing the new codes and because these new codes represent existing well-established tests. However, in its November Notice of Final Payment Determinations, CMS determined that it would use the gapfilling process to price the new codes. At that time, ACLA expressed concern about the significant workload involved in this task, the short time in which contractors had to price the new codes, the relative inexperience of most contractors with gapfilling and molecular pathology, and the potential for a negative impact on patient care. In a November 30, 2012 letter to Acting Administrator Marilyn Tavenner, we requested that if CMS continued to require the contractors to use the gapfilling process, as an interim solution beginning January 1, 2013, the agency should provide cross-walk pricing for 2013 to allow sufficient time for the contractors to complete the gapfill pricing process and to ensure that laboratories continue to be paid for these services without disruption. Alternatively, we suggested that CMS could establish G-codes to replace the stacking codes and price them at the same level as the stacking codes, and laboratories could use the G-codes until the gapfilling process was completed. We do not believe that it is too late for CMS to consider these alternatives, given the way the process is unfolding.
This far into the process, it is increasingly clear that there are major problems with how gapfilling is proceeding. Even though we are less than a week away from when prices must be reported to CMS—and almost two years from the time when the codes were first announced— the process is still far from complete, and significant questions persist about how contractors arrived at the prices that they have posted. For example, at this time, only Cahaba, Noridian, NGS and Palmetto have priced a substantial number of the new codes. CGS posted its proposed prices, which appear identical to those developed by Palmetto. Novitas has released only a handful of codes at this time, because, according to the contractor, it is not permitted to publish its prices before giving them to CMS. Nonetheless, the Novitas prices that are available are identical to those posted by Palmetto. Noridian has priced a substantial number of the codes; remarkably, its prices are exactly 89.5 percent of the price established by Palmetto. NGS and NHIC have priced only a handful of tests, supposedly because they have received claims for only those few. (Of course, if those contractors price only the tests as they receive claims, it raises significant questions about what happens if they have not received any claims for certain tests by March 31, when they have to report prices to CMS. Are the contractors’ prices for those tests just not included when CMS posts prices at the end of April?) At this point, First Coast and Wisconsin Physician Services have not posted any prices and it is not clear when they will. Moreover, despite our requests, contractors have provided little background on how they arrived at the particular prices.
As a result, we continue to have significant concerns about the process, including the following:
These numerous questions make it vitally important that interested stakeholders have the ability to review the analyses and data being relied on by the contractors. After CMS posts the contractor prices on April 30, there is a 60-day comment period required by the regulations. However, without more information on the processes used by the contractors, laboratories will be denied the opportunity to submit meaningful comments. We cannot be expected to explain our concerns about the way the prices were derived if we have no information to review. Furthermore, there are several contractors who have posted no pricing information or very limited pricing information at this time; thus, we have no ability to determine the basis for their pricing decisions. In other situations when CMS posts proposed prices, there is a plethora of background information made available to commenters. For example, when the proposed Physician Fee Schedule rule or the Outpatient Prospective Payment System rule is released, a significant amount of background data are presented that allow interested parties to determine the basis for the resulting price levels and to make informed comments. We believe that this gapfilling exercise requires a comparable process if laboratories and other stakeholders are to have a meaningful opportunity to provide their input during the upcoming comment period.
As a result, we are requesting that prior to the initiation of the comment period on May 1, 2013 contractors should be instructed to make available their methodologies and data that show how they arrived at their prices (including information about tests they excluded from pricing calculations). If necessary, we would be willing to work with CMS on identifying tests of particular importance so that it is not necessary to publish that information for the entire range of over one hundred codes. When directing contractors to make this information public, CMS must provide the contractors with parameters for how they present their work so that stakeholders have meaningful information to review. Again, without such information, stakeholders’ right to comment is meaningless. We also believe that CMS should convene an “Open Door Forum” or stakeholders’ meeting at that time to review the price-setting process for the remainder of the year and to respond to numerous other questions that have arisen about specific issues, such as those discussed above.
In our previous discussions relating to gapfilling, we were urged to be patient and were assured that the gapfilling process would be a transparent one. Unfortunately, we do not believe that has been the case, and we are concerned that the lack of transparency will continue to impede the ability of laboratories to comment meaningfully on the prices arrived at by contractors. As you can understand, this is a matter of great concern and seriousness to clinical laboratories. We look forward to discussing this with you further. Please contact me at your earliest convenience so that we can set up a time to meet.
President, American Clinical Laboratory Association