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This week’s headlines:
Congressional action

House passes FY2013 budget resolution
On March 29, the House of Representatives passed by a vote of 228-191 the Fiscal Year 2013 Budget Resolution proposed by the House Budget Committee Chairman Paul Ryan (R-Wis.), covering federal spending beginning October 2, 2012, through September 30, 2013. The budget covers proposals for federal appropriations and includes reforms to entitlement programs like Medicare, Medicaid, and Social Security. Specifically, the House-passed budget caps discretionary spending $19 billion below the previously agreed-to levels under last year’s Budget Control Act; calls for the repeal of health system reform, including the Independent Payment Advisory Board (IPAB); assumes a ten-year fix for physician payments under Medicare (SGR); and cancels the upcoming spending cuts scheduled to begin January 2013 due to the failure of Congress in reaching a deficit-reduction agreement last November, under which physicians could face up to a 2 percent cut.

The House-passed budget resolution follows the February release of the President’s FY2013 budget proposal and reflects significant spending and policy differences. Senate Democratic leadership has indicated that the Senate will not consider a budget proposal but will rather craft spending bills based on the spending levels previously agreed to in last year’s Budget Control Act. The AADA will continue to monitor these budget developments and their potential impact on the practice of dermatology.

Federal agency focus

AADA and AMA urge CMS to stop plans to back-date penalties
The Centers for Medicare and Medicaid Services (CMS) has issued proposals to back-date the penalty programs associated with electronic prescribing and the electronic health record incentive program so that a physician will face a penalty based on activity in a year prior to the year of the penalty specified in the law. For example, CMS would base the 2012 e-prescribing penalty on a physician’s e-prescribing activity that occurred in 2011. The AADA, together with the American Medical Association and other specialty societies, has urged CMS against this approach. In addition, in the face of an expected onslaught of overlapping regulatory mandates and reporting requirements, CMS has been urged to ease the burdens on physician practices relative to the value-based modifier, the transition to ICD-10, and re-evaluate the penalty timelines associated with the physician quality reporting system.

AADA and AMA object to the use of RAC contractors to conduct pre-payment review
The Centers for Medicare and Medicaid Services (CMS) will commence the Recovery Audit Prepayment Review Demonstration on or after June 1, 2012. In response, the AADA, the American Medical Association (AMA) and other specialty societies have advocated that CMS rescind this program.

The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors (RACs) to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The reviews will focus on seven states with high populations of fraud- and error-prone providers (Florida, California, Michigan Texas, New York, Louisiana, Illinois) and four states with high claims volumes of short inpatient hospital stays (Pennsylvania, Ohio, North Carolina, Missouri) for a total of 11 states.

The inadequacy of certain RACs in the administration of the recovery audit process, and the significant burden placed on physician practices to engage RACs and appeal inaccurate RAC determinations have been widely reported. The Academy, the AMA, and other specialty societies strongly object to the use of RAC contractors to conduct the pre-payment review process and have requested that CMS further apply all existing contractor regulations to RACs.

Private payer activity

Aetna announces surgical pathology testing requirement
Aetna has announced that it will require practices offering in-office surgical pathology testing to be both CLIA certified and College of American Pathologists (CAP) accredited in order to receive payment for surgical pathology services. Aetna’s new in-office pathology lab policy will impact their contracted medical practices nationally, and includes over 5,000 medical practices with around 7,000 participating physicians. This will apply to both the technical and professional component of services billed in the CPT-4 code range 88300-88314 and 88342. Practices will be required to obtain CAP credentialing by Aug. 1. Practices that do not comply will need to refer Aetna patients to in-network labs, including Quest Diagnostics and AmeriPath, including the Dermpath Diagnostics division.

Aetna suggests that to avoid a “gap in payment,” CLIA and CAP accreditation should be submitted by May 1 for practices with both credentials, though Aetna has also extended the compliance deadline for practices interested in obtaining their CAP accreditation by or before Aug. 1.

The codes that are impacted are the surgical pathology codes 88300-88309, the special stains codes 88312 – 88314 (including histochemical staining with frozen sections(s)), and the pathology consultation codes 88342.

The Academy looks forward to collaborating with Aetna to ensure that its policies do not negatively impact the delivery of timely diagnostic services, which are integral to providing high-quality direct dermatologic care to patients in an office-based setting.

The American Academy of Dermatology is working to gather all the relevant information to inform an effective advocacy plan. As such, if you or your practice receives this policy change from Aetna, we ask that you share it along with your contact information to the Academy’s Government Affairs staff via email to ppm1@aad.org or via facsimile to (847)330-1120.

Anthem Blue Cross Blue Shield reverses modifier 25 reductions in Kentucky and Indiana
Following months of targeted advocacy efforts, the American Academy of Dermatology Association (AADA) worked closely with Anthem Blue Cross Blue Shield of Kentucky and its parent company, WellPoint Inc., to reverse its new policy that, since Jan. 1, has reduced reimbursement by 50 percent for evaluation and management (E/M) services billed with modifier 25 in conjunction with procedure codes.

Beginning June 1, WellPoint will reimburse at 100 percent of the allowable amount for these E/M codes, rather than 50 percent of the allowable amount. However, WellPoint will maintain the 50 percent reduction for E/M codes billed with a modifier 25 with a preventive visit code. The AADA reminds members that claims for an E/M visit and a separate procedure on the same date require both services to be medically necessary and adequately documented, and that the modifier 25 should be added to the E/M code. The E/M service should reflect work above and beyond what is included in the procedure.

The AADA collaborated with dermatologists at the state level, as well as with the Indiana State Medical Association, the Indiana Academy of Dermatology, and the Kentucky Medical Society, to achieve this result.

State policy roundup

Anti-indoor tanning advocates unite on Rhode Island bills
On March 30, the AADA, along with the Rhode Island Dermatology Society, Brown University dermatologists, American Society for Dermatologic Surgery Association (ASDSA), American College of Mohs Surgery, American Society for Mohs Surgery, Society for Pediatric Dermatology, Joanna M. Nicolay Melanoma Foundation, and the National Council on Skin Cancer Prevention sent a letter to the editor to the Warwick Beacon supporting legislation to prohibit minors from accessing indoor tanning devices. Both House and Senate bills on this topic are awaiting action by the House Health, Education and Welfare Committee. The letter to the editor calls on the committee chairman, Rep. Joseph McNamara, to hold a vote on the pending legislation. Jason Neustadter, MD, chief dermatology resident at Brown University, a melanoma survivor and AADA member, Lionel Bercovitch, MD, also were interviewed by the Warwick Beacon. A hearing on the House bill was conducted in Committee on April 4 and included testimony by Drs. Neustadterand Bercovitch and AADA member Martin Weinstock, MD, professor of dermatology and professor of epidemiology, Brown University.

Tennessee dermatologists support regulation of the medical spa industry
On April 4, Tennessee Dermatology Society President, Dawn Vincent, MD, joined the Tennessee Medical Association at the Tennessee Legislature in support of legislation to regulate the performance of cosmetic medical procedures as the practice of medicine. Dr. Vincent commented on the importance of education and training of physician supervisors and non-physician clinicians who perform delegated cosmetic medical procedures. The House bills, and its Senate companion, have met strong opposition from the medical spa industry, aestheticians, and electrologists. This legislation will be heard by the House Health and Human Resources Committee on April 11. If approved by the Committee, the bill will be sent to the full House for a vote on the floor.

California and New York pursue cosmetic medical procedure tax
The AADA is collaborating with the American Society for Dermatologic Surgery Association (ASDSA) to oppose two pieces of legislation in California that would levy a new tax on the performance of cosmetic medical procedures. Assembly Bill 1963 exempts “necessary medical services” from the proposed service tax, and Assembly Bill 2540 specifies “elective cosmetic surgery” would be subject to taxation. The Assembly Committee on Revenue and Taxation is set to review this legislation at a scheduled hearing on April 9.

On March 26, the New York State Department of Taxation and Finance issued an opinion on its policy regarding applicable sales tax on botulinum toxin and dermal filler cosmetic products. Medical drugs and devices are currently exempted from the state’s sales tax. As such, the sales tax exemption applies to dermal fillers when they are utilized to treat medical conditions such as facial lipoatrophy. The guidance document indicates that when used to treat medical conditions, illnesses, or diseases in patients, rather than for cosmetic purposes, it is the department’s policy that botulinum toxin compounds and dermal fillers will be treated as drugs or medicines. The AADA is working closely with the ASDSA, the New York State Society of Dermatology and Dermatologic Surgery, and the Medical Society of the State of New York to follow up with the department and other policymakers in the state on this issue.

Political affairs – SkinPAC

SkinPAC surpasses $580K
SkinPAC raised more than $93,000 in March, making it the second most successful month in SkinPAC’s history. This accomplishment can be attributed to the initial roll out of SkinPAC’s 2012 campaign and the heightened priority of AADA President Dan Siegel to make SkinPAC a $1 million per election cycle political action committee.

Another way SkinPAC will be raising money this year will be to continue holding regional fundraisers. Clay J. Cockerell, MD, Seemal Desai, MD, and William Posten, MD, will host a fundraiser for SkinPAC on April 5 at 6:30 p.m. in Dallas at Cantina Larado. The goal of this particular event is to get residents and young dermatologists involved in SkinPAC by having a low-dollar function costing $60 to attend. It will feature AADA President Dan Siegel and U.S. Rep. Joe Barton (R-Texas).

Brent Moody, MD, and Pat Davey, MD, are taking the lead on hosting a SkinPAC fundraiser targeting Mohs surgeons on May 5, 2012. The event will be in Chicago to coincide with the American College of Mohs Surgery’s annual meeting. The location is still to be determined, but the reception will start at 7 p.m. Dr. Siegel also will play a key role to make this event a success.

To RSVP or find out more about SkinPAC and these events, please contact AADA’s manager of political affairs, at (202) 712-2609, or by email at shewitt@aad.org.

SkinPAC’s political purpose is to solicit and receive contributions to be used to make political campaign expenditures to those candidates for federal elective office, and other federal political committees, who demonstrate understanding and interest in the views and goals of the American Academy of Dermatology Association.

Contributions to SkinPAC are not deductible as charitable contributions for federal income tax purposes. SkinPAC cannot accept contributions from corporate accounts. All AADA members have the right to refuse to contribute without reprisal. Federal law prohibits us from accepting contributions from foreign nationals. Federal law requires us to use our best efforts to collect and report the name, physical address, occupation, and the name of the employer of individuals whose contributions exceed $200 in a calendar year.

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