Medicare Special Stain LCD May Hinder Pathology Workflow

Medicare contractor’s crackdown on abuse raises concerns about wider consequences

CEO SUMMARY: Under a proposed rule for Medicare region J-11, a pathologist will no longer be able to use “reflex templates or pre-orders for special stains and/or IHC stains prior to review of the routine H&E.” While the proposed LCD is designed to target a relatively small number of pathologists who regularly overutilize special stains, if implemented as written, the LCD is expected to change the workflow for every pathologist ordering special stains. It also creates a new motive for RAC auditors to visit pathology labs.

PATHOLOGISTS USING SPECIAL STAINS in their daily practice have reason to be concerned about a local coverage determination (LCD) recently proposed by one Medicare administrative contractor (MAC).

Last month, Palmetto GBA, the MAC for the J-11 region of North Carolina, South Carolina, Virginia, and West Virginia, proposed the LCD titled, “MolDx: Special Histochemical Stains and Immunohistochemical Stains (DL35693),” to address what Palmetto called “aberrant local utilization.”

This proposal affects providers in Medicare region J-11. Pathologists and lab directors can comment on the proposal until December 25. After that, it may be revised or become effective as currently written. The effective date could be as early as this January.

The primary impact of the proposed LCD is to end a procedure common to many pathology laboratories. In the proposed LCD, Palmetto writes that use of “reflex templates or pre-orders for special stains and/or IHC stains prior to review of the routine hematoxylin and eosin (H&E) stain by the pathologist are not reasonable and necessary.”

To comply, the proposed LCD states that “a pathologist must first review the H&E stain prior to ordering special stains or IHC. The medical necessity for the special stain or IHC studies, the results of the stain or IHC, and review of the control must be documented in the surgical pathology report.”

Should this LCD take effect as written, it will create a new workflow task for every pathologist. As noted on a Pathology Blawg post of October 30, 2014, “the LCD will have an impact on all pathologists in that they will be required to fully explain the medical necessity for each ancillary stain they order in their report if they want to be reimbursed for it.”

Pathology Blawg was careful to observe that only a small number of overutilizing pathologists will be negatively affected by the proposed reimbursement restrictions, writing that “the reimbursement restrictions Palmetto is proposing will not impact the vast majority of pathologists who already order ancillary stains appropriately. Rather, they will for the most part only impact those pathologists who are ordering ancillary stains inappropriately.”

Unnecessary Utilization

Palmetto’s proposed LCD is intended to address overutilization of immunohisto-chemical (IHC) and special stains by pathologists for breast, gastrointestinal, prostate, lung, gynecologic, genitourinary, skin, soft tissue, central and peripheral nervous systems, bone marrow, and tumor chemosensitivity specimens.

The publication of the proposed LCD is a case of “be careful, you may get what you wish for!” That’s because, earlier this year, the College of American Pathologists (CAP), sent a complaint to CMS in response to an educational letter the MAC had posted on its website about ancillary stain overutilization by pathologists on gastric biopsies.

In that letter, dated June 25, 2014, among other things, CAP wrote that, “to the extent that Palmetto believes that any additional all-encompassing guidance is needed in the gastric biopsy area, it should establish such a coverage policy through the existing LCD process to ensure stakeholders the ability both to provide input during policy development and to appeal those policies with which they disagree.”

Educational Letter Removed

Palmetto did remove the offending educational letter from its website. That action was followed by the posting of the proposed LCD addressing appropriate utilization of special stains and IHC studies.

One lab industry executive watching these developments believes that, if approved as currently written, the proposal will make it more complicated for any pathologist to order a special stain. But that is only part of the story, observed Joe Plandowski, the founder of In-Office Pathology in Lake Forest, Illinois. “Should this LCD be implemented as written, pathologists in those states will face interesting workflow problems and have added risk from additional audits. For example, implementation of this LCD may also motivate Recovery Audit Contractors (RACs) and Zone Program Integrity Contractors (ZPICs) to visit local pathology groups to audit for improper utilization of special stains and IHC studies.”

What adds complexity to this issue for the pathology profession is that, each time a pathologist orders a special stain, it is a self-referral. It is this aspect of special stains which motivates the relative handful of less-ethical pathologists to overutilize special stains and IHC studies.

Public Comment Period

Thus, as pathologists and interested parties submit comments to Palmetto about the proposed local coverage determination, any argument that pathologists should be allowed to exercise their professional discretion as to when a special stain is medically necessary (and how the language of the LCD impinges on the standard of care) is likely to ring hollow with administrators at Palmetto. After all, the LCD is a response to the alleged overutilization of special stains that originally caused Palmetto to take this action.

The good news is that pathologists, pathology practice administrators, pathology consultants, and industry vendors have until December 25 to submit comments about the proposed LCD. It provides one opportunity for pathology professionals to give Palmetto additional perspectives about the downstream consequences of the LCD that they overlooked or failed to consider.

However, for the reasons noted above, the LCD’s language is not likely to undergo much change. That makes it likely that the LCD will be implemented pretty much as written and as early as January.

What Motivated Palmetto GBA to Issue this LCD Requiring Prior Approval for Special & IHC Stains?

ONE REASON PALMETTO GBA issued its proposed rule to require additional documentation for special stains and IHC stains is that some pathologists complained that certain of their colleagues were ordering stains inappropriately, said Joe Plandowski, founder of In-Office Pathology.

“For several years, pathologists have complained about overutilization of special stains and IHC stains by certain pathologists, including those pathologists working in physician’s office labs and bad pathologists in general,” he said. “In fact the College of American Pathologists has pushed for something to be done about this problem involving overutilization of IHC and special stains.

“However, taking action against offenders means that such agencies as the federal Centers for Medicare & Medicaid Services (CMS) or its authorized contractor, Palmetto GBA, will issue rules that affect all pathologists—not just the overutilizers,” explained Plandowski. “Thus, by complaining about just one segment of pathologists, CAP and its allies seem to have convinced Palmetto to crack down on all pathologists. So now those rules will be onerous and it will be very difficult to get them revised.”

CAP Complained to CMS

In May, CAP complained to CMS about an effort by Palmetto to reduce the number of inappropriate stains for gastric biopsies, Plandowski said. Palmetto had cited recent articles in the medical literature that reported that ancillary stains should be done on no more than 20% of all gastric biopsies and they should be done before the pathologist examines the H&E, Plandowski said.

“But that’s not how it works when a pathologist needs stains for a gastric biopsy,” explained Plandowski. “Often, what the pathologist is looking for in a gastric biopsy is H. pylori. Anytime H. pylori is present, established protocols direct the pathologist to automatically do an IHC stain and an 88313. In these gastric biopsies, they are not looking at the H&E stain first and then ordering the special stains based on the H&E stain findings.

“But what happened was, following CAP’s complaints last May about one effort by Palmetto to raise a question about special stains, Palmetto has responded with a proposed LCD that is onerous for all pathologists,” he said.

Problem Was Perpetuated

In a post on the Digital Pathology Blog this summer, pathologist Keith J. Kaplan, M.D., wrote about this issue, saying, “It puts the College of American Pathologists in a difficult spot, because many of its members and their accredited laboratories… regardless of where they practice—be it pathologist, hospital or urologist/gastroenterologist-owned laboratory—have perpetuated the problem. No doubt with some help from some self- referring clinicians but also likely from themselves and their administrators.”

“Another issue of concern about Palmetto’s proposed LCD is the potential for it to be adopted by other MACs,” speculated Plandowski. “Should this happen, pathologists in other regions of the country will need to comply with this LCD when they order special stains and IHC studies. It is an example of one MAC cracking down on a small number of overutilizing pathologists, but in the process, that MAC’s new policy changes the workflow for every pathologist who orders special stains as other MACs across the United States decide to adopt the same policy.”

THE DARK REPORT observes that Palmetto’s attention to the problem of overutilization of pathology services is not an isolated episode. Federal healthcare fraud investigators are actively pursuing overutilization such as in the Biodiagnostic Laboratory Services case.





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