April 04, 2018
6 min read

AGA: It’s time to close the Medicare colonoscopy loophole, reform Stark law

You've successfully added to your alerts. You will receive an email when new content is published.

Click Here to Manage Email Alerts

We were unable to process your request. Please try again later. If you continue to have this issue please contact customerservice@slackinc.com.

Recently, the American Gastroenterological Association has urged physicians and patients to join them in pressuring CMS to close the Medicare “colonoscopy loophole,” in which patients are charged a co-pay for their screening colonoscopy if a polyp is found and removed. The association has provided an online form and pre-drafted letter for those who wish to contact CMS about this issue.

Further, the AGA recently announced that this year it will focus on urging CMS and Congress to reform three key regulations that increase care costs without benefiting patients, including prior authorizations, step therapy and Stark reform.

Healio Gastroenterology and Liver Disease recently spoke with Peter S. Margolis, MD, AGAF, chair of the AGA Government Affairs Committee, about the burden these regulatory issues impose upon patients and providers, and why now is the time for reform.

Healio: What is the Medicare colonoscopy loophole?

Margolis: It’s an interesting quagmire of a problem. The Patient Protection and Affordable Care Act, better known as the ACA or Obamacare, waived coinsurance and deductibles for preventive medical procedures, including colonoscopy for colon cancer screening. However, because of the unique nature of colonoscopy, the coding for it can be screening, diagnostic or therapeutic. So, when we’re doing the colonoscopy to screen for colon cancer, if we see a polyp, we need to remove it. When this happens, Medicare and some insurance companies will now consider the colonoscopy to be a diagnostic and therapeutic procedure rather than a preventive screening procedure, and this potentially results in charges to a patient in the form of a copay or a coinsurance.

Healio: Do similar loopholes exist for other preventive procedures?

Margolis: This issue is unique to colonoscopy, as there’s no other screening test that is also diagnostic and therapeutic. A mammography or cervical screening, for instance, may detect an early lesion, but afterward patients are referred to a radiologist and a surgeon for their diagnosis and therapeutic intervention. In contrast, a colonoscopy can achieve all these things at once, and it makes no sense to do a colonoscopy for any other reason; if you find a polyp, you must remove it.

Healio: Why should patients and providers get involved to help close this loophole?

Margolis: Let’s say a 65-year-old Medicare patient comes to see me, and I tell them they’re going to have a screening colonoscopy because their primary doctor wanted them to and they were eligible for it. If I did the test and it was negative, and I didn’t find any suspicious polyps, then there would be no co-pay because it was just a screening test. Now if I performed a colonoscopy in that same person and I did find and remove a polyp, now the person has to wake up and pay a co-pay. So, when patients see their gastroenterologist for a screening colonoscopy, they’re assuming the procedure is going to be covered, but when they receive the co-insurance bill from Medicare if they have a polyp removed, they often become upset with the gastroenterologist. Of course, it’s not the fault of the gastroenterologist; it’s the Medicare policy.

Healio: How did this policy become enacted in the first place, and what is the best regulatory solution?


The ACA includes specific language that waives the deductible for a screening colonoscopy that becomes therapeutic, which was added due to AGA advocacy, since Medicare beneficiaries were given a waiver of deductible for a screening colonoscopy as part of the Deficit Reduction Act of 2005. When that benefit was implemented, it was the first time we became aware of this loophole issue. Congress included specific language for the deductible; however, they also decided to waive coinsurance for screening colonoscopy. Since the language was so specific to the deductible, CMS has stated they cannot apply the same waiver to the coinsurance.

The Removing Barriers to Colorectal Cancer Screening Act would help address this problem. There are currently two bills — the House bill HR1017 and the Senate bill S479 — for which we’ve been lobbying for years. So, both houses of the government have a parallel bill that would correct the cost-sharing problem for Medicare patients by waiving the coinsurance for screening colonoscopy regardless of the outcome.

The legislation was introduced by representatives from both sides of the aisle, meaning the bill has bipartisan support. It has 251 co-sponsors in the House and about 40 co-sponsors in the Senate, so there’s more than enough people on board to get through, but it’s unfortunately stuck in the abyss of the legislative process.


Healio: How can patients and providers get involved to help advocate for the bill?

Margolis: They can go to the CMS website and contact them directly using an online form and pre-drafted letter supporters can send to CMS via the AGA website (https://app.govpredict.com/portal/take_action_on_medicare_colonoscopy_loophole). AGA can also help them get in contact with their local representatives (https://app.govpredict.com/portal/advocacy/p5twzvu2/take_action).

Additionally, physicians can get involved with the AGA’s Advocacy Day at Digestive Disease Week in June, as well as through virtual advocacy days that AGA hosts throughout the year, so you can get involved without even having to leave home. Providers interested in getting involved can contact AGAAdvocacy@gastro.org to learn more.

The more we reach out to Congress and the Senate, the more likely it is that this bill will be passed. It’s a no-brainer bill — the only challenge is that the bill does not have an official Congressional Budget Office (CBO) score to see how much the fix would cost. The first unofficial estimate with Senate Finance Committee staff had the bill costing about $200 million over 10 years, but that was a few years ago. Since that time, Medicare added an anesthesia benefit to the screening colonoscopy for beneficiaries, so the cost will increase. We are still waiting for an official score. Fortunately, the ACA already has language in it that requires the wavier, so ACA recipients do not have to pay a co-pay if their test turns diagnostic.

Healio: Can you discuss AGA’s advocacy for Stark reform?

Margolis: There’s a huge push, not just from gastroenterologists, but from many in the medical community, to modernize the language in Stark legislation.

When Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA), it changed the way physicians would be paid under Medicare and sought to transition physicians to a more value-based payment system. Physicians were incentivized to develop physician-driven payment models to improve efficiency and patient outcomes. However, with the existing Stark self-referral laws that prohibit physicians from referring patients to an entity in which they have a financial interest, practices are unable to participate in many advanced alternative payment models (APMs).

The Stark laws, which were enacted nearly 30 years ago, pose barriers to care coordination since they prohibit payment arrangements that consider volume or value of referrals or other business generated by the parties. These prohibitions stifle care delivery innovation by inhibiting practices from incentivizing their physicians to deliver patient care more efficiently, because the practices cannot use resources from designated health services in rewarding or penalizing adherence to new clinical care pathways.

Congress recognized that the Stark laws were a barrier to new care delivery models when it authorized the Health and Human Services Secretary to waive the Stark self-referral and anti-kickback laws for accountable care organizations (ACOs). Physician-driven APMs also need to be given this exception to drive innovation in health care and to implement the MACRA law as Congress intended.

AGA supports S. 2051/H.R. 4206, the Medicare Care Coordination Improvement Act, which would provide CMS with the regulatory authority to create exceptions under the Stark law for APMs and to remove barriers in the current law to the development and operation of such arrangements. The legislation would allow CMS to waive the Stark laws for physicians seeking to develop and operate APMs like what Congress allowed for ACOs. AGA believes this legislation is necessary for many of the innovative payment models developed by gastroenterologists to be implemented in the Medicare program

Healio: What should providers know about AGA’s other regulatory priorities regarding reform for step therapy and prior authorizations?

Margolis: The problem with requirements for step therapy is that currently, when we prescribe biologics or certain other therapies, the insurance industry can require physicians to make patients go through a step leveling of therapy before they get to approval for the medication or therapy they were originally requesting. So, let’s say you’re a very sick patient with ulcerative colitis, and I want to put you on a particular biologic. These therapies are very expensive, but I know if I put you on it, you’ll improve more rapidly. However, your insurance company can tell me, well before I can prescribe the biologic, my patient needs to try and fail several more inexpensive therapies. The problem with this is, by the time the recommended biologic gets approved, the patient could be extremely sick and end up in the hospital, potentially even losing their colon. So, for these reasons, these requirements must be changed.

Similarly, with prior authorizations, there is a push to require insurance companies to reform their practices. If I recommend a biologic therapy, and your insurance company rejects it or requires a prior authorization, it can take weeks for them to respond. Then I need to fill out paperwork, because the insurance company wants more information, the prior authorization gets requested and rejected again, and by now, the patient is extremely sick, they’ve missed days of work, and all these things are delaying care.

What AGA is trying to do is advocate for a much more reasonable, streamlined approach by requiring a response within a defined amount of time, and if the insurance company does not respond within this time frame, the patient and providers will have the right to assume it’s going to be covered. We’re not asking for open formulary, but if insurance companies want to be involved with a limited formulary, there must be some reasonable approach; you can’t leave patients hanging and make doctors delay care with all this paperwork and rejection.

Disclosures: Margolis is chair of the AGA Government Affairs Committee.