Dermatologists Say Anthem Cuts Affect Patient Care

Much lower payments disrupt relationships derms have with pathologists diagnosing complex cases

CEO SUMMARY: Deep cuts in what Anthem pays pathologists for the professional component for certain AP services are having a harmful effect on the long-standing relationships that dermatologists have with dermatopathologists, some physicians say. By disrupting these relationships, Anthem is harming patient care, they add. Since late last year, in a growing number of states, Anthem has cut what it pays for the professional component for certain tests in the 8000 series of CPT codes by as much as 70%.

DERMATOLOGISTS ARE SPEAKING OUT about the negative effects they see as a result of the aggressive cuts that Anthem is making in what it pays for anatomic pathology services.

Reductions of 50% to 70% in the rates that Anthem pays to anatomic pathologists are harming patient care for those patients who have complex and serious skin conditions such as melanoma, the deadly form of skin cancer, they said.

Last fall, Anthem cut what it paid for the professional component in Missouri for certain tests in the 8000 series of CPT codes by as much as 70%. Since then, the nation’s second-largest health insurance company has cut payments by 50% to 70% to pathologists in Alaska, California, Georgia, Indiana, Ohio, Wisconsin, and Washington State, according to Vachette Pathology, a consulting firm in Sylvania, Ohio.  (See, “Anthem Rolling Out More Anatomic Path Price Cuts,” TDR, July 1.)

Same in Kentucky and Virginia. Payment reductions are planned for New York on Jan. 1, 2020, and also in Colorado, Connecticut, Kentucky, Maine, New Hampshire and Nevada, Vachette said.

In a letter to Anthem’s Chief Clinical Officer Stephen Friedhoff, MD, in April, George Hruza, MD, the president of the American Academy of Dermatology (AAD), objected to Anthem’s reductions in what it pays for AP services. Previously, Anthem had been among the best payers for such services for its 40-million members in 14 states.

Despite Hruza’s complaints, representatives from Anthem told the AAD during a conference call on July 3 that the health insurer would not change its policy, Hruza said in an interview with THE DARK REPORT.

“Basically, Anthem officials said, ‘Thank you for your concern, but we don’t feel we need to make any changes.’ And in fact, they said, they were expanding the cuts to other states,” Hruza said.

“Because Anthem has operations in many states, this change will have a big impact—especially in those states where Anthem is the number one health insurance provider,” Hruza added. In those states, such deep cuts in payment will have a significant effect on patients’ access to dermatopathology care, he said.

Complex Histopathology

Hruza, other dermatologists, and dermatopathologists with whom they work are worried because the professional component of AP services involves complex histopathology processes and assessments that are unlike the routine nature of most clinical laboratory testing, he said.

“Diagnosing tissue is not like doing a blood test, where the physician gets a number from the lab and can tell if the test is normal or not,” he said. “In dermatology, many diagnoses depend on careful and precise analysis. I consider the work that dermatopathologists do to be a qualitative examination, rather than a quantitative one.

“That requires a lot of interaction between the dermatologist and the dermatopathologist,” Hruza commented. “There are many different ways to interpret patients’ specimens, and that interpretation requires dermatologists to consult with dermatopathologists.

“Because we consult with dermatopathologists all the time, we can understand each other,” he commented. “That understanding allows us to take good care of patients.” Such consults produce accurate, reliable, and timely diagnoses of patients’ conditions, he said.

“For many skin conditions, the dermatologist needs to call the dermatopathologist because, for those conditions, a clinical pathologic correlation is required,” he added.

“This is equally true when a patient presents with a growth that’s suspicious for melanoma,” he continued. “The dermatologist can view a number of lesions that might be considered ‘in between,’ meaning the diagnosis might not be obvious,” he said. “In those cases, every dermatologist must be comfortable with the pathologist or the dermatopathologist he or she is using for these consultations.

“In the most difficult cases, the referring physician wants to make sure that a dermatopathologist reads the slide,” he commented. “But unfortunately, in some labs a dermatopathologist may not view those slides with skin biopsies and some other specimens. That can lead to additional difficulties.” Not having a dermatopathologist read difficult cases has a detrimental effect on accuracy, he explained.

Because Anthem is slashing payments sharply, some dermatopathologists are likely to leave the insurer’s network, Hruza predicted. “Reimbursement rates that go down to 50% of what Medicare pays mean pathologists are about to be reimbursed much less than they get now and already they are barely breaking even,” he said.

“Most dermatopathology labs can’t operate on such low payment rates from Anthem,” he added. “Basically, they will not be able to view specimens because they cannot continue contracting at that rate. There’s just no way.”

Instead, dermatologists will send specimens to the larger clinical lab companies such as Laboratory Corporation of America and Quest Diagnostics, he said. “But when that happens, dermatologists will have little or no relationship with the dermatopathologists at big lab companies like Quest or LabCorp,” he added.

“In such large labs, a dermatologist may never work with the same dermatopathologist each time he or she refers a case,” he said. “So, there will be no chance to build a new relationship.”

In its efforts to get Anthem to reconsider its rate reductions, the AAD is working with the American Medical Association, the American College of Mohs Surgery, and the American Society for Dermatologic Surgery, Hruza said.

Dermatopathologist Fears Anthem’s Goal Is to Shift Cases to Large National Lab Firms

FOR DERMATOLOGIST M. YADIRA HURLEY, MD, the cuts Anthem is making in payment for anatomic pathology services are a sign that small dermatology practices with physician office labs and dermatopathologists in small AP groups are about to lose access to case referrals.

Hurley is a Professor of Dermatology and Pathology and Director of Dermatopathology at SLUCare and in the Department of Dermatology at Saint Louis University School of Medicine.

The deep reductions in payment that Anthem is rolling out nationwide will have a significant effect on small private labs and private groups of dermatologists with a dermatopathologist on staff, she said. The large national labs, such as Laboratory Corporation of America and Quest Diagnostics, can absorb such deep payments cuts with volume, she added.

The effect will be a loss of the relationships that dermatologists have established over many years with dermatopathologists, Hurley commented.

“Anthem is forcing the hand of dermatologists to send biopsies to pathologists with whom they may not be comfortable or that they may not know well,” she said. “Dermatologists are losing the right to choose their dermatopathology consultant for biopsy specimens.

“The large corporate labs may not provide the relationship between the dermatologists and the dermatopathologists that is often required for the optimal quality patient care that local labs provide,” she added. “Not only that, but many times local labs can get results back faster, especially for rush diagnoses or for an important cancer diagnosis.”

For lesions that are difficult to diagnose—in particular melanocyte lesions—dermatopathologists have developed specific language for the various types of specimens in question. “We have different terminology for all the different kinds of ambiguous lesions that we encounter,” she said. “When dermatologists work with new pathologists, that terminology may be completely different.

“When making a complex diagnosis based on a specimen under the microscope, the terminology can be very, very different depending on where you trained,” Hurley explained. “In those cases, it’s important for a dermatologist to be able to choose the dermatopathologist they want to diagnose those specimens.

“Experience shows that, if they can choose the dermatopathologist, when the report comes back, they are more likely to understand clearly what that dermatopathologist means when they use certain wording,” she said. “As dermatologists, we know how to identify a benign specimen and we know how to identify melanoma. But in-between lesions are much more difficult to diagnose. For those, you want to be very precise in the language you use to describe them.

“In those cases, the dermatologist will want to call the pathologist or dermatopathologist and know that both physicians are comfortable in the use of similar terms that were previously used,” Hurley commented.

Contact George Hruza, MD, at the American Academy of Dermatology or; contact M. Yadira Hurley, MD, at


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