The legislation, S. 947, the Physician Pathology Services Continuity Act of 2009, was introduced by Sen. Blanche Lincoln (D-Ark.) and cosponsored by Sen. Pat Roberts (R-Kan.) and has been referred to the Finance committee.

The “grandfather” protection affects hospital-lab arrangements in effect as of July 22, 1999, the date when the Centers for Medicare and Medicaid Services (CMS) first proposed to end the pathology TC billings, arguing that the TC is reimbursed under the hospital’s Part A inpatient payment, and labs should seek TC payment from the hospital, not Part B.

Congress has repeatedly blocked CMS from implementing the payment policy change and has granted numerous extensions of the “grandfather” provision, most recently in the Medicare Improvements for Patients and Providers Act that became law July 15, 2008.

The “grandfather” protection applies to the hospital, not the lab, CMS says. Hospitals may switch labs without losing the protection; however, independent labs cannot switch hospitals and still be protected. CMS also has defined the TC of pathology services to include not only anatomic services, but also cytopathology and surgical pathology.