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The new technology for cervical cancer screening: costs versus reimbursement.

Running a lab often means you have to wave at Scylla while inching past Charybdis. You may want to offer the newest technology, but will you be able to pay for it?

Recent years have seen a number of technological innovations to the conventional Pap smear. These new methods vary from sample preparation technique to automated screening of slides to slide mapping. As with the introduction of any medical device or procedure, the debate about clinical effectiveness is heated - with manufacturers and supporters pushing for approvals from the Food and Drug Administration and acceptance from the medical community while some third-party payers and other proponents of conventional methods remain unconvinced. Now laboratories are faced with sifting through volumes of research and marketing data to determine whether to offer the new technology and how to offset the higher costs.

Laboratories are traditionally caught between offering the best possible service, which often means keeping up with advances in technology, and not losing money while achieving this goal. The debate about medical necessity could rage on for quite some time; meanwhile, should you not offer what could be a significant improvement to an old test? Here we will discuss the different types of technology available (see "Technology synopsis," p. 46), the issues of assessing and adding value to an undervalued test, and how some laboratories have incorporated these technologies and are dealing with issues of cost effectiveness.

The value of technology

Deciding to offer any of the new testing options begins with studying the new test's value in terms of medical necessity. A big obstacle for the lab to overcome when offering one of these new tests is that many healthcare professionals view the conventional Pap smear screen for cervical cancer as the most successful cancer screening test ever developed. According to the National Cancer Institute, since the test's introduction in the 1950s, the death rate from cervical cancer has declined by more than 70%. Currently in the U.S., approximately 15,000 cases of cervical cancer are diagnosed each year, and approximately 5,000 women die from the disease. Improving an already successful tool is difficult enough; add to it the task of justifying the additional expense of the new technologies, and you've got a full-blown return-on-investment study underway.

Oddly enough, the debate is not whether these new technologies are an improvement of the conventional Pap, because the general consensus seems to suggest that they are more effective in identifying abnormal cells (data varies by product; vendors can provide bibliographical information on clinical studies). The controversy lies in determining exactly how much more effective these technologies are and how this relates to the elevated cost of the new test versus the conventional method. In a July 1998 press release, the American College of Obstetricians and Gynecologists stated that while the new technologies approved to that date improved the sensitivity of the Pap test, their routine use could not be recommended based on costs and lack of sufficient data demonstrating a reduction in incidence of late stage disease or improvement in the survival rate of cervical cancer.

Cervical cancer is a slowly progressing tumor, so even if the new technologies detect a higher rate of low-grade lesions, most of what they detect doesn't progress to disease. In fact, doctors don't always find low-grade lesions dangerous enough to treat. Questions have been raised on the years of life saved using the new technology, and many feel that the additional money would be better spent on educational programs for women on the importance of getting tested every year. It also stands to reason that survival data may not be available for many years.

On the other hand, according to the NCI, cervical cancer is virtually 100% curable if detected early. However, the false-negative rate of the conventional Pap smear is higher than 20%.

Proponents also assert that years of life saved may not be the best measure to use when payers need to consider the shorter-term financial impact. Tests shown to detect more significant lesions mean earlier detection and therefore earlier and less expensive treatment. Fewer false-positive results or uncertain diagnoses mean fewer dollars spent on unnecessary follow-up procedures, not to mention less anguish for the patient.

How do questions of medical necessity affect the laboratory considering this new technology? Again, it goes directly to establishing the value of the service to clients - patients, physicians, hospitals, and payers. The conventional Pap test was often given away for much less than the cost of performing the test as an inducement to the client to send the lab more business. NeoPath, located in Redmond, WA, is the manufacturer of AutoPap, the only automated screener approved for primary screening. The company sent a response letter to ACOG's July press release that stated, "Any undervalued test whose accuracy is only 80% will always appear more cost effective if it is repeated often enough and is cheap enough."

The conflict surrounding medical necessity also directly relates to cost effectiveness in that determining the tests' clinical value impacts the amount of reimbursement established by payers. Now, to offer the newer, better, more expensive service, labs will be faced with the task of "putting the value back in" to this vastly undervalued test.

Dynamics of reimbursement

Despite the many difficulties with obtaining adequate reimbursement, those who believe in the technology believe in it strongly and feel that the situation for payment and acceptance is improving. Vicky Robinson, vice president of marketing for Cytyc, a company located in Boxborough, MA, that manufactures the ThinPrep Pap test, a monolayer slide preparation system, says, "There's been a definite increase in momentum as more payers came on board. You can see the market influence as a competitive reflex when payers look at what other providers are doing." Insurers reimbursing for Cytyc's test account for 100 million covered lives.

The controversy and increased media coverage is also helping to drive the reimbursement debate. From newspapers such as the Wall Street Journal to nighttime TV news programs such as Dateline, the public at large is being made aware of the issues and their options, which in turn is pushing third-party payers and managed care to review carefully decisions about money. Kim Norton, director of reimbursement and government affairs at NeoPath says, "There is a lot of pressure on Medicare to increase reimbursement for Pap smears."

Medicare national limit. Of course, Medicare policies are particularly important in determining reimbursement for new technologies. Many private payers use the Medicare reimbursement rate as the baseline for which they establish their own policies. The Medicare national limit for Pap testing is currently set at $7.15. Jay Marshall, MD and co-medical director of the cytology laboratory at Associated Regional and University Pathologists in Salt Lake City, tells MLO, "Pap testing in general is at a level where it can't get any better without a significant increase in terms of cost."

It appears as though that increased level of service and cost is at hand - now the industry is watching the interplay of various pressures, awaiting an outcome.

Many of the new procedures are listed by Medicare as "gap filled," which means that no national limit has been set. The next few months should determine how those procedures will be priced. The Health Care Financing Administration requires local Medicare carriers to establish a rate for the new procedures based on charges from actual claims. Carriers will look at claims for 3 months - up until March 31, 1999 - after which they will close the books and submit their data to HCFA by May 3, 1999. By September 1999, HCFA should make a decision on national limits for the new procedures.
1999 Cervical cancer CPT codes

88142 Specimen collected in preservative fluid, automated thin
 layer preparation with manual screening. No Medicare limit
 (gap filled).

88143 - with manual screening and rescreening. No Medicare limit
 (gap filled).

88144 - with manual screening and computer-assisted rescreening
 (AutoPap). No Medicare limit (gap filled).

88145 - with manual screening and computer-assisted rescreening
 using cell selection and review (PapNet). No Medicare limit
 (gap filled)

88147 Primary screening by an automated system (AutoPap; code for
 "no further review" slides). No Medicare limit (gap filled).

88148 - automated system with manual rescreening (AutoPap; code
 for slides reviewed by a human). No Medicare limit
 (gap filled).

88150 Manual screening not using Bethesda system reporting.
 (Conventional Pap smear; same as 1998.) Medicare limit

88152 - with manual screening and computer-assisted rescreening
 (AutoPap rescreening code; same as 1998). Medicare limit

88153 - with manual screening and rescreening (QC rescreening by
 a human). Medicare limit $7.15.

88154 - with manual screening and computer-assisted rescreening
 using cell selection and review (PapNet). Medicare limit

88164 Manual screening with Bethesda system reporting.
 (Conventional Pap smear; was 88156 in 1998.) Medicare limit

88165 - with manual screening and rescreening (QC rescreening by
 a human). Medicare limit $7.15.

88166 - with manual screening and computer-assisted rescreening
 (AutoPap rescreening code; was 88158 in 1998). Medicare
 limit $7.15.

88167 - with manual screening and computer-assisted rescreening
 using cell selection and review (PapNet). Medicare limit

Reference: Data provided by Kim Norton, director of reimbursement
and government affairs for Neopath in Redmond, WA.

Both vendors and healthcare practitioners seek to influence this decision. Vendors are meeting with as many carriers as they can during the 3-month period while laboratories and physicians are submitting as many claims as possible. The government, however, is of course reluctant to spend the additional money without demonstrating an overwhelming clinical benefit.

CPT codes. Initially, labs were also faced with the fact that the new technologies had no assigned current procedural terminology (CPT) codes. Now, although those codes have been assigned as of January 1, 1999, this doesn't necessarily mean that enhanced reimbursement is increasing (for new codes, see Box, above). First, payers have 3 months to load the new codes onto their systems. Within that time frame, laboratories may get claims sent back with the explanation "not a covered service." What this actually means is that the system doesn't recognize the code. Vendors are actively working with lab customers to prepare them for this possibility. Kim Norton explains, "As long as customers expect these denials, they're okay with it. They need to know to appeal these claims; and NeoPath is prepared to help them do that."

Also at issue is how payers interpret the codes. Many of the new CPT codes are assigned to procedures without a national reimbursement limit set by Medicare. John Chavez, manager of billing operations for SED Laboratories in Albuquerque, NM, describes the situation, "The new codes allow people to understand the new procedures, but the reimbursement methodologies have not responded as quickly as assigning a new code. Payers are reluctant to unilaterally enhance reimbursement unless they have some sort of guidance, either by prevailing industry practice or by looking to Medicare." Some payers may respond by reimbursing at the same rate as a conventional smear.

What's being done

Despite the definite financial risk involved, laboratories are choosing to offer the new technologies. The consensus among those interviewed by MLO is that their chosen method meant better care for patients than the conventional smear. ARUP uses NeoPath's AutoPap; and Dr. Jay Marshall commented on the choice, "No cytology lab is making money. ARUP made the decision that they wanted to provide a level of service where every negative smear got two screens." Michael Warner, administrator for Pathology Associates of Syracuse, NY, an institution that uses Cytyc's ThinPrep, says, "We did not get into it to save money or because it was cost effective. After seeing the difference in the slides, it was early a better method of providing healthcare."

Procedural issues. Incorporating any of these new methods into your laboratory means considering several factors other than reimbursement, including workflow, staffing, startup costs, test volume, as well as customer and payer base. In the case of ThinPrep, the most substantial workflow change occurs in the preparation stage. Pathology Associates purchased three of Cytyc's processors to accommodate the additional time necessary to process the specimens; and Bruce Dziura, MD and medical director of Greater Springfield Pathology and Bay State Reference Laboratories, Springfield, MA, says that his lab's prep time definitely increased. "However," he adds," we could also absorb a one-third increase in Paps without increasing cytotech time, which is the greater expense."

In using AutoPap, there was initial concern at both ARUP and SED Laboratories that computerized screening would replace human interpretation. Dr. Marshall says, "We tried to offset that concern by telling our staff that we wanted to increase our volume rather than decrease the number of people." Even so, learning to trust a machine's interpretation takes time; but in both cases, cytotechnologists turned out to be supportive. Steve Neumon, BS, CT(ASCP), and cytology manager at SED tells us, "People are sleeping better at night because they have immediate feedback on the quality of screening they did. If a cytotech doesn't find something on a slide ranked by the machine as possibly abnormal, then I can rescreen it and we can immediately go over the findings. Everyone appreciates the directed approach." In addition, both institutions evaluated the primary screening capabilities of the machine by initially rescreening the 25% of slides ranked by AutoPap as "no further review." Dr. Marshall explains, "The staff was more comfortable when they saw that the slides were ranked truthfully."

Achieving a workable comfort level with ThinPrep takes time as well. "The morphology is different than the conventional smear; and that can be scary to those used to looking at conventional Paps," says Dr. Dziura. Both Pathology Associates of Syracuse and Greater Springfield Pathology trained employees using split sample testing from physicians for side-by-side comparisons. "At first, the cytotechs were reading the conventional smears first; but as they gained confidence with ThinPrep and realized how much easier it was to work with, they would start reading the ThinPreps first," Dr. Dziura points out.

Converting physicians. The key to convincing physician customers to use the new technologies seems to be old fashioned legwork. The labs would send high-level people to every practice the lab dealt with to discuss the value of the technology, the reasons for conversion, results from initial use, and on what basis the physicians could offer it to their patients. In the case of ThinPrep, Pathology Associates of Syracuse is 92-95% converted, and Greater Springfield Pathology is 98% converted. Michael Warner of Pathology Associates attributes their success to sending people out in person to talk with doctors and nurses.

AutoPap conversion works a little differently. ARUP and SED labs made their decisions to use the technology based on a single standard of care for parents. They told their clients that to continue using their service, they had to use AutoPap. The option of not running the smears through the machine was not available. Both institutions reported that they didn't lose any business with AutoPap, but getting new business has been difficult.

Dealing with payers. Although physician clients may be excited about using the new approach, getting money from payers is another story. How well your costs are covered depends on a multitude of factors, including your billing methods, your payer mix, and your area of the country. In some cases, if the insurance company won't pay, the patient can be billed for the difference. In any case, depending on the institution's relationship with its payers, either the institution can negotiate with payers directly or vendors will do this for you. Michael Warner chose to go directly to the payers and address issues of value and of preventive healthcare as more effective in the long run. Pathology Associates is currently reimbursed at a level where they can cover costs.

Location has everything to do with reimbursement rate. While insurance companies in some areas such as Springfield and Syracuse reimburse at an adequate level, other areas of the country do not. SED Laboratories is located in New Mexico, where payment is below the national average, especially for ancillary and lab services. Nanci George, vice president of marketing for SED, says, "This area of the country is very HMO penetrated, resulting in low reimbursement. Our organization is more than 50% capitated and that makes marketing a challenge." Where SED has worked with physician groups or facility billing, they've seen success, but these are not the bulk of their clients, and negotiating with managed care organizations is very difficult. "Everyone is excited about AutoPap," says George, "but not everyone is excited to pay for it. We work with our clients individually to facilitate a fair price."

To help labs determine how or if they can recoup their costs, vendors have developed revenue models based on the individual situation. These models take various data into account, including test volume, payer mix, and reimbursement levels.


In cases where negotiation is possible, both vendors and practitioners are quick to tell payers that, based on their results, the increased cost saves money through better diagnostic care. Labs who spoke to MLO reported a decrease in false negatives, uncertain diagnoses, and the need for retesting, as well as an increase in definitive diagnoses and in finding more significant lesions.

For example, Dr. Dziura's facility tracked the financial outcomes of better diagnoses and found that the lower cost of improved outcomes more than offset the enhanced cost of the ThinPrep. They did an in-house study on the rate of atypical squamous cells of undetermined significance (ASCUS). Using the new technology, they saw a one-third decrease in ASCUS diagnoses; and then calculated the costs of what each ASCUS diagnosis generated in terms of follow-up within the next year, including office visits, biopsies, and colposcopies. Spread over the entire patient population, this decrease saved approximately $10.40 per patient per year. That saving alone offset two-thirds of the increased cost of the technology.

No one is looking for a financial windfall from the new technologies, but everyone needs to cover their costs; and many have taken the risk to go ahead and offer the service based on what they feel is better patient care. How great the risk depends on each individual situation.

RELATED ARTICLE: Technology synopsis

To prepare a conventional Pap smear, a doctor scrapes the cervix with a collection device and immediately smears the cells onto a slide. Approximately 20% of the cells are transferred from the collection device to the slide while the rest are thrown away with the device. Then, a cytologist manually screens each slide, looking for only a few abnormal cells in a sample of thousands. The new technologies focus on improving the two steps above - specimen collection and the screening process.

Specimen collection.

The ThinPrep Pap test is manufactured by Cytyc Corp. in Boxborough, MA, and was approved in May 1996 as a replacement for the conventional Pap smear. Then, in November 1996, the FDA approved the labeling of the method as "significantly more effective" than the conventional Pap smear for the detection of low-grade squamous intraepithelial lesions (LSIL) or more severe lesions in a variety of patient populations.

The ThinPrep method uses a thin-layer, liquid-based technology where physicians rinse the collection device in a vial of proprietary fluid medium that preserves the cells. The rinsing of the collection device preserves virtually all of the cell sample, as opposed to the conventional method, where most of the cells are discarded. After the vial is sent to the lab, the sample is placed in the company's processor, which disperses the sample to remove the blood, mucous, and other nondiagnostic debris and then mixes and filters the sample to collect a thin, even layer of material, which is transferred onto the slide.

AutoCyte in Burlington, NC, has developed PREP, another monolayer method currently under review by the FDA for use as a replacement to the conventional smear. Again, cervical cells are collected in a vial of preservative solution; but PREP uses a cell enrichment (gradient centrifugation) process to remove the excess nondiagnostic debris from the sample. The system also follows a batch processing format to automate preparation.

Monolayer samples provide a uniform layer of cells, unobscured by debris whereas conventional slides may have areas of clumped cells that are several layers thick. Also, because the bulk of the sample is preserved and because those cells are mixed thoroughly, proponents of the monolayer technologies maintain that these samples more accurately represent the condition of the cervix.

Automated screening/rescreening.

Two automated screening systems on the market are AutoPap, manufactured by NeoPath Inc. in Redmond, WA, and PapNet from Neuromedical Systems Inc. in Suffern, NY. Of all available technologies only AutoPap is currently FDA approved for primary screening of samples. PapNet is used for rescreening of slides for quality control purposes, but the company began the clinical trials for primary screening approval in June 1998. Another system, AutoCyte's SCREEN, was submitted to the FDA in 1998.

The AutoPap system for primary screening uses a high-speed microscope equipped with proprietary imaging technology to first archive 25% of a batch of slides as normal, requiring no review by a cytotechnologist. To do this, approximately 1,000 images per slide are acquired and analyzed by sifting the cell morphologies from these images through interpretation algorithms. The remaining 75% of slides are assigned individual rankings and triaged for cytotechnologist review.

PapNet uses neural networks that search for abnormal cells. It then selects a group of suspicious cells for further examination and creates a digital record of the mapping coordinates for each abnormal cell. Finally, the system takes a digitized image of the cells and arranges them in a grid.

Autocyte's SCREEN presents an image gallery of the 120 most significant and abnormal cells. After reviewing these images, the cytotechnologist compares his/her diagnosis with the result of the system's diagnostic classification. The combined classification result determines whether a case is reviewed as abnormal.

Slide mapping.

AccuMed International Inc. in Chicago, IL, has several FDA-approved products as well. Its AcCell system consists of two laboratory components: the TracCell 2000 and the AcCell workstation. TracCell is the front end of the system; it analyzes specimens and creates a "road map" of each slide, which is then forwarded to the AcCell workstation, which guides the cytotechnologist through the diagnostically relevant material. The company received FDA clearance in October 1998 to use ThinPrep-prepared slides with their system in addition to earlier clearance with conventionally prepared slides.
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Title Annotation:includes related article on new technologies in pap smear tests
Author:Pallatroni, Lisa
Publication:Medical Laboratory Observer
Date:Mar 1, 1999
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