CAP Seeks Clarification of Direct Billing in Pennsylvania

The College of American Pathologists (CAP) is urging the Centers for Medicare and Medicaid Services (CMS) to ensure compliance in Pennsylvania on current federal prohibitions on reassignment related to a proposed Medicaid expansion waiver for the state. Pennsylvania has proposed to expand Medicaid enrollment under an operational plan now used by Iowa and Arkansas. According to CAP, the plan is known as the “private option,” in which premium assistance is offered to individuals who qualify under Medicaid expansion income eligibility criteria as provided for under the Affordable Care Act. The premium assistance program utilizes qualified health plans in the state health insurance exchange to deliver purchased coverage benefits outside the traditional operation of the Medicaid program. Iowa and Arkansas both received approval of their respective programs in 2013. CAP is concerned about use of the waiver to usurp requirements for Medicaid programs, specifically requirements for direct billing by providers of health care services, including pathology and laboratory services. “The explicit federal prohibition on reassignment of Medicaid claims, in particular, prevents numerous business and medical practice abuse in the provision of pathology and laboratory services,” wrote Gene Herbek, M.D., CAP president, in an April 10 letter to CMS. “It is our judgment that such abuses in pathology/laboratory services are engendered when claims are reassigned by the provider of the service to the ordering clinician. These abuses include fee-splitting, self-referral, markups, kickbacks, and rebates that all have potential to incentivize the unnecessary provision of pathology/laboratory services by ordering clinicians who perform no component of the service.” CAP took no position on the agency’s approval of the waiver other than expressing concern on the need to ensure compliance with the current federal prohibition on reassignment. Takeaway: The College of American Pathologists wants to ensure that approval of a Medicaid waiver in Pennsylvania ensures that there will be no reassignment of state Medicaid claims and requires payment to the provider of the service.