Medicare Program; Conditions for Payment of Power Mobility Devices, Including Power Wheelchairs and Power-Operated Vehicles, 17021-17030 [06-3271]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 71, Number 65 (Wednesday, April 5, 2006)]
[Rules and Regulations]
[Pages 17021-17030]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3271]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 410

[CMS-3017-F]
RIN 0938-AM74


Medicare Program; Conditions for Payment of Power Mobility 
Devices, Including Power Wheelchairs and Power-Operated Vehicles

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule conforms our regulations to section 
302(a)(2)(E)(iv) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003. This rule defines the term power mobility 
devices (PMDs) as power wheelchairs and power operated vehicles (POVs 
or scooters). It sets forth revised conditions for Medicare payment of 
PMDs and defines who may prescribe PMDs. This rule also requires a 
face-to-face examination of the beneficiary by the physician or 
treating practitioner, a written prescription, and receipt of pertinent 
parts of the medical record by the supplier within 45 days after the 
face-to-face examination that the durable medical equipment suppliers 
maintain in their records and make available to CMS or its agents upon 
request. Finally, this rule discusses CMS' policy on documentation that 
may be requested by CMS or its agents to support a Medicare claim for 
payment, as well as the elimination of the Certificate of Medical 
Necessity (CMN) for PMDs.

DATES: Effective Date: These regulations are effective on June 5, 2006.

FOR FURTHER INFORMATION CONTACT: Karen Rinker, (410) 786-0189. Camille 
Soondar, (410) 786-9370 for CMN issues.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 902 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173) amended section 
1871(a) of the Act and requires the Secretary, in consultation with the 
Director of the Office of Management and Budget, to establish and 
publish timelines for the publication of Medicare final regulations 
based on the previous publication of a Medicare proposed or interim 
final regulation. Section 902 of the MMA also states that the timelines 
for these regulations may vary but shall not exceed 3 years after 
publication of the preceding proposed or interim final regulation 
except under exceptional circumstances.
    This final rule finalizes provisions set forth in August 26, 2005 
(70 FR 50940) interim final regulation.
    In addition, this final rule has been published within the 3-year 
time limit imposed by section 902 of the MMA. Therefore, we believe 
that the final rule is in accordance with Congress's intent to ensure 
timely publication of final regulations.
    Sections 1832(a)(1) and 1861(s)(6) of the Social Security Act (the 
Act) established that the provision of durable medical equipment (DME) 
is a covered benefit under Part B of the Medicare program. Section 
1834(a)(1)(A) of the Act provides that Medicare will pay for covered 
items defined in section 1834(a)(13) which, in turn, defines the term 
``covered item'' to include DME defined in section 1861(n). Section 
1861(n) provides that DME includes wheelchairs, including power-
operated vehicles that may appropriately be used as wheelchairs, that 
are necessary based on the beneficiary's medical and physical 
condition, meet safety requirements prescribed by the Secretary, and 
are used in the beneficiary's home, including an institution used as 
the beneficiary's home other than a hospital described in section 
1861(e)(1) or a skilled nursing facility described in section 
1819(a)(1) of the Act. Section 414.202 of our regulations further 
defines DME as equipment that can withstand repeated use, is primarily 
and customarily used to serve a medical purpose, generally is not 
useful to a person in the absence of an illness or injury, and is 
appropriate for use in the home. We have interpreted the term 
wheelchair to include both power wheelchairs and power-operated 
vehicles (POVs or scooters), and we collectively refer to power 
wheelchairs and power-operated vehicles as power mobility devices 
(PMDs).

[[Page 17022]]

    When POVs were first introduced, we were concerned about their 
stability and the danger they could pose to a Medicare beneficiary. 
Therefore, we issued a regulation (57 FR 57688) allowing only 
specialists in physical medicine, orthopedic surgery, neurology, and 
rheumatology to prescribe POVs. At that time, we believed that these 
specialists were the most qualified to perform the required evaluation 
to determine whether a POV was medically necessary and whether the 
beneficiary had the capacity to operate the POV safely and effectively. 
At the same time, beneficiaries were able to get a prescription for a 
power wheelchair without seeing a specialist. We did not issue a 
similar regulation for power wheelchairs because we did not harbor the 
same concerns about their safety.
    Our requirement that only certain specialists could prescribe a POV 
may have created a disincentive for qualified beneficiaries to obtain 
POVs. Many beneficiaries may not have realized that under an exception 
to this requirement set forth in Sec.  410.38(c)(4), they could obtain 
a prescription from their physician if a specialist was not reasonably 
accessible. For example, if travel to the specialist would be more than 
one day's round trip from the beneficiary's home or if the 
beneficiary's medical condition precluded travel to the nearest 
available specialist, we stated that these circumstances would satisfy 
the ``not reasonably accessible'' requirement. We allowed this 
exception under the previous regulation because it addressed the needs 
of beneficiaries who lived in rural or other areas with limited access, 
or who were physically unable to see a specialist.
    However, since POVs were first introduced the technology has 
improved. For example, the POV now has an improved turning radius that 
gives it greater stability and makes it easier to use. Given that these 
technological advancements have made many POVs safer to use, a 
specialist assessment of the beneficiary's capacity to operate a POV, 
while recommended, is no longer required.
    In addition, CMS and the Office of the Inspector General (OIG) have 
identified inflated and falsified billings as a serious problem among 
certain DME suppliers. Medicare payments for power wheelchairs have 
increased approximately 350 percent from 1999 to 2003 (from $259 
million in 1999 to approximately $1.2 billion for 2003), while overall 
Medicare program outlays have risen approximately 28 percent. In an 
effort to address fraud and abuse, Medicare contractors have always had 
the authority to review claims and additional documentation to 
determine if services provided were reasonable and necessary in 
accordance with section 1862(A)(1)(a) of the Act.
    Section 302(a)(2) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, Public Law 108-173 (MMA), added section 
1834(a)(1)(E)(iv) to the Act, which provides that payment may not be 
made for a covered item consisting of a motorized or power wheelchair 
unless a physician (as defined in section 1861(r)(1) of the Act), or a 
physician assistant, nurse practitioner, or clinical nurse specialist 
(as those terms are defined in section 1861(aa)(5) of the Act) has 
conducted a face-to-face examination of the beneficiary and written a 
prescription for the item. This regulation is intended to implement 
section 1834(a)(1)(E)(iv) of the Act.
    Payment for the history and physical examination will be made 
through the appropriate evaluation and management (E&M) code 
corresponding to the history and physical examination of the patient. 
Due to the MMA requirement that the physician or treating practitioner 
create a written prescription and this regulation's requirement that 
the physician or treating practitioner prepare pertinent parts of the 
medical record for submission to the DME supplier, we established an 
add-on G Code G0372 (used in addition to an E&M code for the 
examination) to recognize the additional work and resources required to 
document the need for the PMD. Prescribing physicians or treating 
practitioners who submit the required supporting documentation may 
submit a claim for payment for the add-on G code. The payment amount is 
based on the physician fee schedule relative values for a level 1 
established office visit (CPT 99211), which we believe is equivalent to 
the typical amount of additional physician work and resources. We 
published the implementing instructions for the 2005 G Code in Change 
Request (CR) 4121 which became effective on October 25, 2005.

II. Provisions of the Interim Final Rule

    The interim final rule with comment period (IFC) revised Sec.  
410.38(c) of our regulations (August 26, 2005). A summary of those 
revisions follows:
     The definition of a ``power mobility device'' (PMD). We 
defined PMDs as a subclass of wheelchairs that includes both power 
wheelchairs and power-operated vehicles that a beneficiary uses in the 
home.
     The definition of a ``physician'' and a ``treating 
practitioner.'' As directed by section 1834(a)(1)(E)(iv) of the Act, we 
defined the term ``physician'' in accordance with section 1861(r)(1) of 
the Act. We defined the term ``treating practitioner'' to mean a 
physician assistant, nurse practitioner, and clinical nurse specialist, 
as those terms are defined by section 1861(aa)(5) of the Act. We used 
the term ``treating'' to further explain that the practitioner must be 
the one who has conducted the face-to-face examination of the 
beneficiary.
     The definition of ``supplier.'' We defined the term 
supplier as a durable medical equipment supplier.
     The physician or treating practitioner must conduct a 
face-to-face examination of the beneficiary and write a PMD 
prescription.
     The PMD prescription must be in writing, signed and dated 
by the physician or treating practitioner who performed the face-to-
face examination and received by the supplier within 30 days after the 
face-to-face examination. We defined the term ``prescription'' as a 
written order that must include the beneficiary's name, the date of the 
face-to-face examination, the diagnoses and conditions that the PMD is 
expected to modify, a description of the item, the length of need, the 
physician or treating practitioner's signature and the date the 
prescription is written.
     A beneficiary discharged from a hospital does not need to 
have a separate face-to-face examination if the physician or treating 
practitioner who performed the face-to-face examination during his or 
her hospital stay issues the written prescription and supporting 
documentation for the PMD and they are received by the supplier within 
30 days after the date of discharge.
     The face-to-face examination requirement does not apply 
when only accessories for PMDs are being ordered.
     In addition to the prescription for the PMD, the physician 
or treating practitioner must provide to the supplier supporting 
documentation which will include pertinent parts of the medical record 
that clearly support the medical necessity for the PMD in the 
beneficiary's home. Pertinent parts from the documentation of the 
beneficiary's PMD evaluation may include the history, physical 
examination, diagnostic tests, summary of findings, diagnoses, and 
treatment plans. The physician or treating practitioner should select 
only those parts of the medical record that clearly demonstrate medical 
necessity for the PMD. The parts of the medical record selected should 
be sufficient to delineate the history of events that led to the 
request for the PMD; identify the mobility deficits to be

[[Page 17023]]

corrected by the PMD; and document that other treatments do not obviate 
the need for the PMD, that the beneficiary lives in an environment that 
supports the use of the PMD and that the beneficiary or caregiver is 
capable of operating the PMD. In most cases, the information recorded 
at the face-to-face examination will be sufficient. However, there may 
be some cases where the physician or treating practitioner has treated 
a patient for an extended period of time and the information recorded 
at the face-to-face examination refers to previous notes in the medical 
record. In this instance, those previous notes would also be needed.
    We explained that we believe that the removal of restrictions 
regarding who can prescribe POVs will increase a beneficiary's access 
to the PMD that is most appropriate for the beneficiary's condition. 
Prior to the effective date of the interim final rule, section 
410.38(c) of the regulation limited some physicians and all treating 
practitioners from prescribing POVs.
     Physicians, treating practitioners, and suppliers must 
comply with all applicable Federal laws and regulations, including the 
HIPAA Privacy Rule. Any physician, treating practitioner or supplier 
that is a HIPAA covered entity must meet the relevant HIPAA Privacy 
Rule requirements, including the minimum necessary standard, when 
disclosing the supporting documentation and requested additional 
information. The physician, treating practitioner or supplier that is a 
HIPAA covered entity should make sure to redact any materials that may 
be contained within the medical record that are not necessary to 
support the prescription. For example, a gynecologic report would not 
be needed in the records submitted for a beneficiary whose clinical 
need for a PMD is based solely on disability secondary to a stroke.
     The supplier must obtain the prescription and supporting 
documentation prior to dispensing the PMD.
     Upon request, suppliers must submit to CMS or its agents 
the PMD prescription and supporting documentation that they received 
from the physician or treating practitioner.
     Upon request, suppliers must submit additional 
documentation if the PMD prescription and supporting documentation are 
not sufficient to determine that the PMD is reasonable and necessary. 
Additional documentation may include physician office records, hospital 
records, nursing home records, home health agency records, records from 
other healthcare professionals, and test reports. This documentation 
does not need to be submitted with every claim, but must be made 
available to CMS or its agent upon request.
     The PMD must meet any safety requirements specified by 
CMS.

III. Analysis of and Responses to Public Comments

    We received approximately 65 timely comments. In general, the 
commenters appear to be pleased with the provisions in the interim 
final rule, specifically the add-on payment for additional 
documentation submission, the removal of the sub-specialty requirement 
for prescribing POVs, and the elimination of the Certificate of Medical 
Necessity.
    In addition, the industry response has been very positive. As a 
result of the educational outreach to physicians and treating 
practitioners, suppliers have noted a significant improvement in the 
timeliness, completeness, and substantive content of medical record 
documentation submitted in support of PMD prescriptions.
    Comment: Several commenters stated that in practice, it is 
difficult to obtain all of the needed documentation from the 
prescribing practitioner within 30 days of the face-to-face 
examination, especially if the beneficiary has a complex condition 
requiring additional evaluation for the fitting of the device and 
appropriate accessories.
    Response: We agree. We have extended the allowable time frame from 
30 days to 45 days. CMS believes the additional 15 days is a reasonable 
compromise to accommodate the workflow between the supplier and 
physician or treating practitioner without seriously compromising the 
beneficiary's need for the expedient and efficient obtainment of 
necessary durable medical equipment, and CMS's need to ensure timely 
administration of the DME benefit while minimizing fraud and abuse.
    Comment: Several commenters, along with some physician groups, 
applauded the establishment of the add-on G code and payment for the 
submission of medical record documentation by the physician or treating 
practitioner to the PMD supplier.
    Response: We appreciate these comments. To further assist with 
implementing the add-on G code and payment for the submission of 
medical record documentation, we have issued implementing instructions 
to local contractors.
    Comment: Some commenters suggested that the additional payment to 
physicians and treating practitioners would be insufficient if the 
supporting documentation comes from an external source since this would 
increase the burden.
    Response: We believe that the additional payment is sufficient for 
the increased burden, including if the documentation comes from an 
outside source. This outside source material, such as consultant 
reports and test results, is generally already contained in the 
beneficiary's medical record, even though the physician or treating 
practitioner did not create it. In the absence of this outside source 
material supporting the need for the device, the prescribing physician 
or treating practitioner would likely have created equivalent 
documentation internally. Thus, the payment is sufficient for the 
burden of submitting this documentation whether it was created 
internally or externally.
    Comment: Several commenters said that the Mobility Assistive 
Equipment (MAE) National Coverage Decision (NCD) is too complex for 
physicians to accomplish. The MAE NCD, which includes PMDs can be 
accessed at http:/ /www.cms.hhs.gov/mcd/viewncd.asp?ncd_id= 280.3&ncd-- version=2& basket=ncd%3A280% 2E3%3A2% 3AMobility +Assistive 
+Equipment +%28MAE%29.
    Response: CMS believes this comment is outside the scope of this 
rule, and we will not address it here.
    Comment: Some commenters said that it would take physicians and 
treating practitioners longer than 10 minutes to identify and submit 
supplemental documentation to the DME supplier.
    Response: It is important to bear in mind that this estimate does 
not include the time needed to evaluate the patient or generate the 
original documentation by the physician or treating practitioner. The 
resources needed for creation of the medical record documentation are 
included in the calculation of the payment for the service that is 
being documented, in this case the Evaluation and Management (E&M) code 
for the face-to-face examination. The combined payment based on the E&M 
code and the add-on code is to recognize the additional physician/
treating practitioner work and resources required to document the need 
for the PMD. If a physician or treating practitioner believes that a 
home visit is necessary, a claim for that service would be submitted. 
Similarly, the time for consulting a non-prescriber such as a PT/OT to 
evaluate the beneficiary and produce a consultation report for the 
referring physician or treating practitioner is accounted for in the 
appropriate consultation code.

[[Page 17024]]

    The 10 minute figure is an estimate, based on experience and 
extensive review of historical claims data, of the average time 
consumed specifically to flag existing portions of the medical record, 
tell an office staff person to make a copy of those portions of the 
record, and for that person to copy and put them in an addressed 
envelope or give them directly to the patient, and for the supplier to 
receive this documentation. We expect that the actual time will vary 
based on individual practices and the complexity of the individual 
beneficiary's condition.
    Further, the determination of what parts of a record are extraneous 
will depend on the clinical condition of the patient and the basis of 
the mobility impairment. For example, we would expect that gynecologic 
information would be redacted if the beneficiary's need for a PMD is 
based on a stroke. However, if the beneficiary's mobility deficit arose 
from complications of a gynecologic malignancy, such information may be 
relevant. We believe that the physician or treating practitioner can 
make this distinction readily. In general, visits to a physician, and 
the resulting documentation, are problem-focused. This serves to 
simplify the task of redaction.
    Comment: Several commenters said that CMS should increase the 
amount of education activity directed at physicians and treating 
practitioners. One commenter recommended a web-based guide based on the 
MAE NCD. Another asked how CMS plans to train physicians on completing 
the prescription with the required detail.
    Response: The NCD is not part of this rule so we will not address 
that aspect of these comments here. We agree that physician and 
treating practitioner education about the appropriate prescription of 
PMDs is a priority. To that end, we have used a variety of methods 
including an Open Door Forum, MedLearn Matters materials, DMERC 
articles, informational one-pagers, and scripts for Medicare call 
centers. We have hosted a Physician Partners meeting on this topic and 
have communicated with physician professional societies. Further, some 
physician groups are working with DME suppliers to resolve 
documentation issues at the local level and have stated that they would 
be educating their members nationally once the DMERCs finalize a Local 
Coverage Determination (LCD) on PMDs. LCDs allow Medicare contractors 
to determine whether or not to cover an item or service in accordance 
with 1862(a)(1)(A) of the Social Security Act.
    Comment: One professional organization representing over 94,000 
physicians and medical students expressed support for the removal of 
the requirement for subspecialty prescription of POVs and for the 
elimination of the CMN.
    Response: We have retained these provisions in the final 
regulation.
    Comment: Several commenters said that we should keep the CMN.
    Response: CMS' experience has been that the CMN does not reliably 
accomplish its original purpose with regard to PMDs. The CMN did not 
serve to help physicians better document their patients' clinical needs 
for a PMD, it did not serve to ensure that beneficiaries always 
received appropriate equipment, and it did not serve as an effective 
deterrent to fraud and abuse. We believe the beneficiary's physician or 
treating practitioner is in the best position to evaluate and document 
the beneficiary's clinical condition and PMD medical needs, and good 
medical practice requires that this evaluation be adequately 
documented. Thus, to minimize the documentation requirements for 
providers while assuring that documentation is adequate, physicians and 
treating practitioners will now prepare written prescriptions (as 
required by MMA sec. 302 and this regulation) and submit copies of 
relevant existing documentation from the beneficiary's medical record, 
rather than having to transcribe medical record information onto a 
separate form such as a CMN.
    Comment: Several commenters asked that CMS create more specific 
guidelines that would outline all the documents needed from the 
patient's medical record or create a template (for example, a standard 
set of questions) to capture the information that CMS determines is 
medically necessary to justify the prescription.
    Response: CMS believes the current documentation requirements 
provide suppliers with a comprehensive picture of a patient's history, 
physical examination and functional assessment describing the patient's 
mobility limitation and his/her physical and mental ability to operate 
a PMD. CMS and the DMERCs have implemented extensive educational 
outreach to both suppliers and the medical community pertaining to the 
documentation requirements for PMDs. Examples of formal communication 
include CMS program instructions, MedLearn Matter articles, and several 
DMERC supplier articles explaining the new responsibilities of 
suppliers and a draft PMD Local Coverage Determination (LCD) 
formalizing all of these changes. In addition, medical review 
activities vary depending on the situation under review. CMS cannot 
develop an all inclusive list of documents or information that Medicare 
contractors may request during audits. When requesting additional 
documentation, Medicare contractors write to suppliers and ask for the 
specific documentation or information they need for the review.
    CMS has defined the circumstances under which contractors request 
additional information in the Program Integrity Manual (PIM). Local 
Coverage Determinations are issued by our contractors to describe in 
more detail the conditions under which Medicare payment is made. This 
additional documentation is only collected during the course of medical 
review audits and does not need to be collected for all claims.
    Comment: A commenter asked that CMS specify the quantity and type 
of documents that the supplier should collect.
    Response: We disagree. As noted in previous responses, there is no 
set volume of documentation (for example, number of pages or number of 
sections from a record) that, taken alone without regard to substantive 
content, will guarantee that the beneficiary's clinical condition meets 
the conditions for payment. Similarly, there is no type of document 
that, taken alone without regard to substantive content, will guarantee 
that the beneficiary's clinical condition meets the conditions for 
payment. It would be misleading to suggest otherwise.
    Comment: Some commenters expressed an apparent desire for a 
benchmark of completeness of medical record documentation.
    Response: This comment appears to reflect difficulty distinguishing 
the adequacy of the substantive clinical information described in 
various pieces of the medical record from the pieces of the medical 
record themselves. It is important to remember that the submission of 
any particular piece or combination of medical record documentation 
does not guarantee that the substantive clinical information contained 
therein establishes the medical need for the device. If the 
beneficiary's clinical condition does not meet the conditions for 
payment, the accurate medical record, regardless of completeness, 
volume and detail, would not support coverage by Medicare. Conversely, 
if the beneficiary's clinical condition is such that the conditions for 
payment are met, that might be adequately documented in a variety of 
ways from the available portions of the medical record.

[[Page 17025]]

    Comment: A commenter asked that we clarify the terms ``prescription 
in writing''. Does that mean hand-written or that the physician must 
list all the equipment and accessories on the prescription?
    Response: Section 302(a)(2)(E)(iv) of the MMA states, in part, that 
the physician or treating practitioner must write a prescription for 
the item. This rule provides that the prescription must be dated, 
signed and include the details of what should be provided by the 
supplier, but does not include accessories.
    Comment: A commenter asked if the provisions of the regulation 
apply to manual wheelchairs.
    Response: No, this regulation applies to POVs and power 
wheelchairs, both of which are types of PMDs.
    Comment: Several commenters said that we should allow physical 
therapists and occupational therapists (PT/OTs) to have a greater role, 
either as prescribers of PMDs or as an integral part of the evaluation.
    Response: Section 1834(a)(1)(E)(iv) of the Social Security Act 
limits the types of practitioners who can prescribe PMDs to physicians 
(as defined in section 1861(r)(1)), and to physician assistants, nurse 
practitioners, and clinical nurse specialists (as those terms are 
defined in section 1861(aa)(5)) and does not include PTs or OTs. We 
acknowledge that PT and OT expertise can be an important contribution 
in some contexts. In addition, the DMERCs have published an article 
describing a way to integrate PT/OT services into the evaluation 
process. A PT/OT can file a claim for payment for their evaluation 
services, provided that all other applicable payment conditions are 
met.
    Comment: A commenter asked that we use a different statutory 
definition of physician, which would allow podiatrists to prescribe 
PMDs.
    Response: Section 1834(a)(1)(E)(iv) of the Social Security Act (the 
Act) specifically provides that only physicians as defined under 
section 1861(r)(1) of the Act may prescribe PMDs. CMS does not have the 
authority to alter or use a different definition of the term 
``physician.''
    Comment: A commenter asked why a PT/OT would not be paid like the 
prescribing practitioner for the submission of supporting documentation 
to the DME supplier.
    Response: The responsibility for the submission of supporting 
documentation lies with the physician or treating practitioner. If the 
physician or treating practitioner believes that a professional 
consultation with a PT/OT is appropriate, the physician or treating 
practitioner can obtain the consultation. As with other clinical 
contexts, it is customary for the consultant to send a written report 
of the findings and recommendations back to the originating physician 
or treating practitioner for incorporation in the patient's medical 
record. The physician or treating practitioner would submit the 
consultation report as part of the supporting documentation.
    Comment: Several commenters discussed specific issues with PMD 
suppliers, such as market limitations based on geographic distribution 
or failure to dispense a prescribed device.
    Response: We view these comments as being outside the scope of this 
regulation and will not respond to them here.
    Comment: Several commenters asked that we eliminate the ``in the 
home'' restriction for PMD coverage.
    Response: The ``in the home'' restriction is statutory and thus 
these comments are outside the scope of this regulation.
    Comment: Some commenters noted that the mobility impairment can 
make it difficult to accomplish a face-to-face examination, especially 
if the physician or treating practitioner does not make home visits.
    Response: Per section 1834(a)(1)(E)(iv) of the Social Security Act, 
CMS does not have the discretion to eliminate the requirement for the 
face-to-face examination.
    Comment: A few commenters mentioned that the examples we provided 
in the preamble to the interim final rule were unrealistic; especially 
in that physicians no longer make house calls. The commenters suggested 
that CMS clarify who is accountable for visiting the beneficiary's home 
to determine equipment needs.
    Response: We believe that the supporting documentation must show 
that the beneficiary lives in an environment that supports the use of 
the PMD, but CMS does not require a home visit for purposes of meeting 
this requirement. For the examples provided in the interim final rule, 
CMS believes that overall they are realistic and provide more clarity 
on the pertinent parts of the medical record.
    Comment: Several commenters objected to the ATP certification 
requirement that was proposed in the DMERCs' LCD.
    Response: We view these comments as being outside the scope of this 
regulation since the ATP certification requirement is not a requirement 
of this regulation. Accordingly, we will not respond to these comments 
here.
    Comment: A commenter asked what proof needs to be provided to CMS 
to show that the supplier received the prescription from the physician 
or treating practitioner within 30 days after the face-to-face 
examination.
    Response: We note that in response to comments, we have changed the 
30 day requirement to 45 days. We believe that a supplier should use 
established methods for documenting the receipt of the prescription 
(date/time stamps, delivery receipts, etc.).
    Comment: A commenter asked how long the prescription is good for 
(for example, how long does the supplier have to fill it).
    Response: We have not specified the duration of the prescription's 
validity in this rule. We understand that depending upon the complexity 
of the PMD and its accessories, it may take several months to fabricate 
and adjust the PMD before final delivery is made to the beneficiary, 
that is, the prescription is filled. We do not believe that this 
extreme length of time will be needed for less complex PMD 
prescriptions.
    Comment: If the prescription that the supplier receives is missing 
information (such as the diagnosis codes), can the supplier ask the 
physician for the missing information and annotate the prescription, or 
does the prescription need to be sent back to the physician or treating 
practitioner for the change to be made?
    Response: If a supplier believes the prescription is inadequate, it 
should send it back to the physician or treating practitioner or call 
the physician or treating practitioner and request that the physician 
or treating practitioner send a new prescription. CMS believes that 
permitting a supplier to annotate a prescription would not provide 
adequate assurance that the physician or treating practitioner has in 
fact agreed to the annotations. Since the 45-day period begins with the 
date of the face-to-face examination, any revision of the prescription 
by the prescriber would not reset this 45-day period unless the 
prescriber also conducted a new face-to-face examination with the 
revision of the prescription.
    Comment: Several commenters suggested eliminating the language, 
``The principal effect of this rule on these suppliers will be to 
increase their ability to assure that prescriptions are valid (in terms 
of medical necessity) before they supply equipment to beneficiaries* * 
*.'' (70 FR 50946). The commenters do not believe that suppliers should 
be responsible for reviewing a physician's clinical assessment 
especially since they are not clinicians themselves. A commenter

[[Page 17026]]

questioned whether or not the supplier would be held liable if the 
supplier agrees with the physician's additional documentation but the 
DMERC reviewer decides differently. Or would the supplier be protected 
by the limitation of liability provision in 42 U.S.C. 1395pp(a)?
    Response: We believe that it is the supplier's responsibility to 
provide a legible copy of the written prescription and any other 
required information as defined in this rule. CMS believes that a party 
engaged in healthcare-related businesses should ensure that its staff 
has adequate expertise to carry out its responsibilities, and should 
obtain the training necessary to achieve and maintain that level of 
expertise. The supplier should obtain as much documentation from the 
patient's medical record as it determines that it needs to assure 
itself that the coverage criteria for payment have been met. If the 
information in the patient's medical record does not adequately support 
the medical necessity for the item, then for assigned claims the 
supplier is liable for the dollar amount involved unless a properly 
executed advance beneficiary notice (ABN) of possible denial has been 
obtained. A supplier must maintain the prescription and supporting 
documentation provided by the physician or treating practitioner and 
make them available to CMS and its agents upon request.
    Comment: A commenter suggested that CMS create and require a 
certification of expertise in the assessment of seating and mobility of 
the disabled population. This would allow any healthcare professional 
to assess PMDs.
    Response: We believe this comment is beyond the scope of this rule, 
therefore we defer a response.
    Comment: A commenter suggested that providers of rehabilitation 
seating and wheeled mobility products be listed on the National 
Registry of Rehabilitation Technology Suppliers (NRRTS) registry or 
submit documentation to meet those standards.
    Response: This is beyond the scope of the regulation. Therefore, we 
will not respond to this comment in this final rule.
    Comment: Several commenters suggested that some provisions of the 
interim final rule are inconsistent with other guidance CMS has issued 
on the topic. Commenters say, for example, that the LCD implies the 
receipt of supporting documentation is discretionary where the rule 
does not; the DMERC letter contradicts the rule by stating that a 
physician must distinguish between the patient's in-home and out-of-
home mobility needs and that the patient must pay the difference for 
out-of-home features; the rule states physicians or treating 
practitioners must provide the supplier with supporting documentation 
where the LCD states the report of the face-to-face examination should 
provide information relating to the following questions and the report 
should provide pertinent information, and the DMERC letter states that 
a physician may choose to refer patients to other qualified medical 
professionals and the rule does not.
    Response: This final rule trumps any sub-regulatory guidance and 
should be followed. To the extent that any commenters believe that the 
LCDs addressing PMDs do not reflect the provisions of this rule, we 
suggest that the commenters make these comments to the draft LCDs. In 
addition, CMS would not use a regulation to ask the DMERCs to clarify 
their letters.
    Comment: One commenter mentioned that the wheelchair codes are not 
easily accessible on the CMS Web site and suggested that CMS put a 
query program on the Web site to allow a search for codes by 
description.
    Response: The codes are a separate CMS initiative and since they 
are outside the scope of this rule, we defer a response.
    Comment: A few commenters suggested that CMS delay the 
implementation of the regulation until April 2006 (the same timeframe 
as the coding initiative and elimination of the CMN) and believes that 
CMS violated the APA by publishing an IFC.
    Response: We disagree with commenters' suggestion that we violated 
the Administrative Procedure Act (APA) by publishing this rule as an 
interim final rule. The APA provides that the procedure of publishing a 
notice of proposed rulemaking can be waived if an agency finds good 
cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest, and if the agency 
incorporates a statement of this finding and supporting reasons in the 
rule issued.
    As we stated in the interim final rule, we believe that we had good 
cause to waive the notice of proposed rulemaking because the rule 
conformed our regulations to section 1834(a)(1)(E)(iv) of the Act, 
removed a regulatory restriction on who could prescribe a POV, 
addressed fraudulent and abusive billing practices for PMDs, and 
implemented reforms that would bring more certainty to all participants 
in the PMD industry. The full text of our statement in support of 
waiving the notice of proposed rulemaking can be found at 70 FR 50943.
    In addition, CMS believes that parties affected by the IFC have 
taken significant steps towards implementing the IFC's provisions and 
that delaying the rule's effective date would only cause significant 
confusion among physicians and treating practitioners, beneficiaries 
and the supplier community.
    Comment: A few commenters disagreed with the statement in the IFC 
that a greater percentage of POVs are necessarily appropriate because 
these commenters believe that POVs are actually less maneuverable, less 
stable and usually do not fit into a beneficiary's home.
    Response: CMS does not agree. As we mentioned in the interim final 
rule, the technology for these devices has improved. CMS also believes 
that Congress intended that more POVs be prescribed when it did not 
limit who could write PMD prescriptions to physician sub-specialties in 
section 1834(a)(1)(E)(iv) of the Act.
    Comment: One commenter suggested that when referring to the 
``description of the item'' as part of the prescription that we include 
``(for example, power wheelchairs)''.
    Response: The ``description of the item'' on the prescription can 
be general (for example, power wheelchair or power mobility device) or 
may be more specific.
    Comment: A few commenters suggested that CMS does not have the 
authority to eliminate the CMN, especially after the Federal Court 
upheld the CMN in the Maximum Comfort vs. Thompson case.
    Response: CMS does have the authority to eliminate the CMN. The use 
of specific CMNs is not a statutory requirement. Further, the decision 
issued in Maximum Comfort, Inc. v. Thompson, 323 F.Supp.2d 1060 (E.D. 
Cal. 2004), appeal docketed, No. 05-15382 (9th Cir. May 5, 2005), being 
the decision of a single district court, has no precedential effect. 
The United States has appealed the decision to the U.S. Court of 
Appeals for the Ninth Circuit. For this reason, CMS has no current 
plans to change its longstanding national policy regarding medical 
necessity documentation. The CMN was established to allow efficient 
adjudication of claims by automating the submission of certain 
information needed to make medical necessity determinations. However, a 
recent analysis by a CMS contractor on the utility of each CMN found in 
some cases a rate of CMN non-compliance as high as 45 percent. This 
finding underscored

[[Page 17027]]

our belief that the CMNs do not accurately reflect the contents of the 
patient's medical record. Some portion of this non-compliance is 
attributed to failure to fully understand coverage criteria.
    As we stated in the interim final rule, we believe that recently 
published new coverage criteria for mobility assistive devices, 
including PMDs, provides guidance on what Medicare will consider when 
determining coverage, and that physicians, treating practitioners and 
suppliers will better know how to properly evaluate and document a 
beneficiary's clinical condition. Therefore, we determined that the 
practical utility of a CMN, given the function-based approach to 
coverage, was questionable, and that the continued use of a CMN for 
power wheelchairs or power-operated vehicles would no longer be 
required.
    Comment: A few commenters suggested that CMS implement a prior 
authorization process for rehabilitation equipment which would shift 
the burden from the supplier to Medicare and compliment the standard 
practice of most third-party payers.
    Response: We believe this comment is beyond the scope of this rule, 
therefore we will not address this comment.
    Comment: A commenter noted that some medical records are illegible.
    Response: We do not require a supplier to dispense a PMD if the 
supplier believes that the supporting documentation is inadequate. In 
general, CMS views illegible supporting documentation to be inadequate 
since the supplier cannot possibly know what to dispense or if the PMD 
is medically necessary if it can not read the records.
    Comment: Some commenters recommended that physicians and treating 
practitioners follow a template tied to the MAE NCD algorithm.
    Response: As mentioned previously, CMS believes the NCD is beyond 
the scope of this rule and defers a response.
    Comment: A commenter asked if the face-to-face examination during a 
hospital stay could be performed on any day of that stay.
    Response: We have not specified any particular day within the 
hospitalization. Most hospital inpatients have one or more face-to-face 
examinations every day during the hospitalization. For administrative 
simplicity for this rule, we are using the date of discharge as the 
date of the face-to-face examination. The date of discharge is discrete 
and readily verifiable.
    Comment: A commenter stated that the hospital discharge summary 
would need to be sent with the order for beneficiaries whose face-to-
face examination took place during the hospitalization, so that the 
supplier could confirm that the time requirement had been met.
    Response: Though this is one way of documenting the date of 
discharge, we recognize that the transcript and release of hospital 
records can be, in some cases, a long process. The physician or 
treating practitioner may choose to document the date of discharge in 
some other manner.
    Comment: Several commenters addressed the quality of prescribers' 
medical record documentation and burden on suppliers to handle 
submitted documentation. Commenters noted that DME suppliers already 
collect supporting information from prescribers. Based on past 
experience from a survey month, the commenters found that suppliers 
requested additional documentation 75 percent of the time and consumed 
over 3 hours of supplier staff time in these instances. They also noted 
that in some cases the volume of submitted documentation is over 10 
pages.
    Response: We believe, based on comments from some suppliers and a 
review of our claims review data, that physician and treating 
practitioner behavior in this regard has changed, likely as a result of 
the significant education outreach efforts by CMS, the DMERCs and the 
power mobility community. Thus, we expect that suppliers are now more 
likely to receive adequate supporting information in the first 
instance, and that the need to request additional information will be 
significantly reduced, with a corresponding reduction in supplier staff 
resource needs.
    Comment: A commenter claimed that the requirement that a supplier 
submit documentation to CMS or its agents to substantiate medical 
necessity imposed a new burden.
    Response: We disagree. The medical review process under which CMS 
reviews claims for accuracy already includes this requirement. We also 
believe that it is clearly in the public interest for CMS to pay claims 
accurately.
    Comment: A commenter asked how CMS arrived at the figure of 187,000 
as the number of PMD prescriptions written on a yearly basis.
    Response: CMS examined historical claims data for POVs and power 
wheelchairs. CMS has projected an estimation of 187,000 prescriptions 
that would be written on a yearly basis for PMDs based on historical 
claims data for PMDs. This figure does not include manual wheelchairs, 
wheelchair accessories or other wheelchair-related services aside from 
actual PMDs.
    Comment: A commenter said that a 2003 CMS Paperwork Reduction Act 
(PRA) collection for the CMNs stated that it could take as long as 5 
hours for a non-medical office clerk to review documentation.
    Response: The use of the term ``as long as'' clearly denotes an 
extreme instance rather than an average or representative figure. The 
length of time needed to review documentation will depend on the 
complexity of the individual case and the skill and experience of the 
reviewer.

III. Provisions of the Final Rule

    We are revising Sec.  410.38(c) of our regulations to specify the 
same provisions outlined in the interim final rule except for the 
following changes:
     The PMD prescription and supporting documentation must be 
received by the supplier within 45 days after the face-to-face 
examination.
     A beneficiary discharged from a hospital does not need to 
have a separate face-to-face examination if the physician or treating 
practitioner who performed the face-to-face examination during his or 
her hospital stay issues the written prescription and supporting 
documentation for the PMD and they are received by the supplier within 
45 days after the date of discharge.
     We clarified the definition of ``supplier'' to mean an 
entity with a valid Medicare supplier number, including an entity that 
furnishes items through the mail. Since DME suppliers are required to 
have a valid Medicare supplier number this is not a substantive change.
     We substituted the word ``after'' for the word ``of'' in 
Sec.  410.38(c)(2)(ii) so that the phrase ``within 45 days after the 
face-to-face examination'' is consistent with the phrases in Sec.  
410.38(c)(2)(iii) and (c)(3)(i) and so that there is no confusion 
regarding the length of the time between the date of the face-to-face 
examination and the date by which the supplier must receive all 
pertinent PMD documentation from the physician or treating 
practitioner.
     We revised the authority section to part 410 to include 
section 1893 of the Act. Section 1893 of the Act charges the Secretary 
with creating a program to protect the integrity of Medicare and 
authorizes the Secretary to enter into contracts for the purpose of 
performing utilization and fraud reviews.
    In addition, we listed two narrative examples of what would 
constitute the pertinent parts of a medical record in the interim final 
rule. For clarification, in those examples we used the

[[Page 17028]]

commonly accepted SOAP convention. SOAP, a term of art, refers to the 
four major parts of the medical record documentation of an outpatient 
visit. S, for Subjective, refers to the information provided by the 
patient in his or her own words, generally the reason for the visit, 
the description of his or her symptoms and relevant historical data. O, 
for Objective, refers to data that the physician or treating 
practitioner discovers using physical examination techniques and basic 
instrumentation. A, for Assessment, refers to the physician or treating 
practitioner's application of professional knowledge to the 
interpretation of the accumulated data to generate possible diagnoses 
and conclusions. P, for Plan, refers to the physician or treating 
practitioner's strategy to resolve any issues generated in the 
assessment. This strategy commonly may include prescribing a drug or 
device, ordering further diagnostic testing, and/or scheduling a return 
visit for the patient. We are not requiring that the SOAP format be 
used or that the descriptions be of a certain length for documentation 
in the beneficiary's medical record, as treating practitioners use a 
variety of methods depending on their professional training and the 
context of the clinical encounter. Whatever the length or format or 
accumulated volume of the documentation materials, its substance must 
clearly establish that the device dispensed was fully consistent with 
Medicare's coverage criteria. Medicare's national coverage 
determination on Mobility Assistive Equipment, which includes power 
mobility devices, can be accessed at: https://www.cms.hhs.gov/mcd/
viewncd.asp?ncd-- id=280.3&ncd-- version=2&basket =ncd%3A280%2E3%3A2%3A 
Mobility+Assistive+ Equipment+%28MAE%29. Local Coverage Determinations 
can be obtained from Medicare's Durable Medical Equipment Regional 
Contractors (DMERCs).

V. Collection of Information Requirements

    The collection of information requirements associated with this 
regulation were first introduced in CMS-3017-IFC (70 FR 50940). 
Subsequently, the information collection requirements were submitted to 
the Office of Management and Budget (OMB) for review and approval, and 
were approved under OMB No. 0938-0971. The information collection 
requirements have a current expiration date of May 31, 2006.
    The 60-day Federal Register notice for the re-approval of the 
information collection requirements approved under OMB No. 0938-0971, 
titled ``Conditions of Payment of Power Mobility Devices, including 
Power Wheelchairs and Power-Operated Vehicles (CMS-3017-IFC)'' was 
published on March 24, 2006 (71 FR 14898).
    If you comment on any of these information collection and 
recordkeeping requirements, please mail copies directly to the 
following: CMS, Office of Strategic Operations and Regulatory Affairs, 
Division of Regulations Development--B, Attention: William N. Parham, 
III, Room C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    To be assured consideration, comments and recommendations 
pertaining to the information collection must be received at the 
address above, no later than 5 p.m. on May 23, 2006.

VI. Regulatory Impact Statement

    We have examined the impact of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Congressional Review Act, the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), 
and Executive Order 13132.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for rules with economically significant 
effects ($100 million or more in any 1 year). The Congressional Review 
Act imposes a similar requirement, and provides for the Congress to 
review major rules.
    In analyzing the effects of this regulation, we believe that most 
physicians are already conducting a face-to-face examination before 
prescribing a wheelchair. Also, though treating practitioners are now 
allowed to prescribe PMDs, we do not believe that change alone will 
significantly alter the number of prescriptions for PMDs. This rule 
also removes the requirement that a specialist order a POV. Given that 
physicians and treating practitioners can now prescribe POVs, we 
believe as a result of this regulation that more PMD prescriptions will 
be for POVs, rather than the more expensive power wheelchairs. In 
addition, in conjunction with this rule, additional payment will be 
made to physicians and treating practitioners for the submission of the 
written prescription and pertinent parts of the medical record to the 
DME supplier. Taken together, we believe that the impact of these 
changes as a result of this regulation will have minimal net impact on 
the Medicare program.
    While we believe that the net impact on Medicare reimbursements for 
PMDs of this rule and the recently published NCD will be minimal, the 
provisions of this rule will likely cause a shift in the composition of 
the PMDs reimbursed by Medicare. We expect that this rule will result 
in a shift in PMD prescriptions from power wheelchairs to POVs. We have 
no empirical basis for projecting shifts in market share. Nor do we 
have a basis for discriminating between the shift that is the result of 
the NCD and the shift that is a result of this rule. However, we 
believe that the Congressional decision to allow a broader range of 
physicians and treating practitioners to prescribe POVs will lead to an 
increased number of POV prescriptions. This shift could well be 10 
percent or greater. If 10 percent or more of the estimated 175,000 
power wheelchair prescriptions in FY 2004 shifted from power 
wheelchairs to POVs (with the total unchanged at 187,000 prescriptions 
for both categories of PMD), this would imply reduced sales for the 
former of $84 million (assuming an average cost of $4,800) and 
increased sales of the latter of $35 million (assuming an average cost 
of $2,000). Accordingly, we are classifying this as an economically 
significant rule under EO 12866, and as a major rule under the 
Congressional Review Act.
    Under the Executive Order, we analyze the benefits, costs, and 
alternatives of major rules. While difficult to quantify, we believe 
that Medicare beneficiaries will benefit from the increased ability to 
obtain POVs. Beneficiaries would gain both from the increased utility 
of the less cumbersome devices, and from reduced cost-sharing (on 
average, $560 in decreased coinsurance if average costs of the devices 
were $2,000 and $4,800, respectively). As previously noted, we expect 
the increase in PMD prescriptions and the shift in the composition of 
prescriptions to result in a net minimal impact on the value of 
Medicare reimbursements for PMDs. Since manufacturers typically produce 
both types of PMD (other than specialty ``high end'' manufacturers 
unaffected by this rule), we expect the net effect on PMD manufacturer 
revenue from Medicare reimbursement of PMDs should be negligible.

[[Page 17029]]

    There are other costs and benefits. Taxpayers, suppliers, and 
patients will all gain from increased accuracy in prescribing and 
increased certainty of proper payment. The increased burden on 
physicians and treating practitioners from the new analytic and 
documentation requirements will be offset by the new payments we 
implemented in connection with this rule. As discussed in the preceding 
PRA analysis, suppliers will face slight increases in record-keeping 
requirements. None of these other effects are economically substantial 
(for example, increased payments to physicians and treating 
practitioners are likely to be in the order of $5 million annually). As 
a result, we believe that the predominant effects of this rule are both 
positive and substantial, and that the benefits of this rule outweigh 
its costs.
    We do not believe that any reasonable alternatives exist that would 
alter these conclusions or lead to even larger economic benefits. The 
primary causes of these effects were the Congressional decisions to 
allow a substantial increase in the number and types of providers 
allowed to prescribe POVs, and to require a face-to-face examination. 
We are required to implement those statutory changes. Even if we had 
discretion, we judge them to be desirable changes. Coupled with our 
recent coverage decision, other implementing details in this rule 
(especially improved documentation for suppliers), and other planned 
reforms (physician and treating practitioner payments, improved 
classification of mobility equipment, elimination of the CMN), we 
expect the needs of mobility-impaired beneficiaries to be better met, 
and the needs of suppliers to be better met, than under any alternative 
set of reforms.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. Individuals and States are not 
included in the definition of a small entity. We have determined that 
this rule will not have a significant economic impact on a substantial 
number of small entities. Furthermore, the RFA does not require such 
analysis for rules that, like this one, do not require a proposed rule.
    However, we appreciate that there are three classes of small 
entities that will face impacts and we address their potential 
concerns. Furthermore, HHS policy is to voluntarily analyze impacts on 
small entities if there is even a possibility of significant impact. 
The analysis that follows, together with the preceding impact analysis 
and other information in this preamble, constitutes an Initial 
Regulatory Flexibility Analysis.
    First, equipment manufacturers may be affected if substantial 
changes in the market for PMDs arose from this rule. As indicated 
previously, we expect the principal economic effect of this rule to be 
to shift prescriptions from one class of equipment, power wheelchairs, 
to another class of equipment, POVs. That effect will arise largely 
among those Medicare beneficiaries who can potentially benefit from 
either class of equipment, but who do not need the additional 
functionality (at the cost of inconvenience) provided by power 
wheelchairs. The manufacturing of these two types of equipment is 
dominated by a handful of firms. Most of these firms produce both types 
of vehicles and can presumably shift production from one line to 
another with relative ease. As indicated previously, volume increases 
likely to occur independently of this rule will likely obviate the need 
for any such shifts. Accordingly, we do not believe that the impact on 
these entities will be significant, or that a substantial number of 
``small'' entities will be affected. We note that there are a number of 
small firms that specialize in ``high end'' equipment for patients with 
very severe mobility impairments who need highly specialized equipment 
or accessories. We believe these firms will be unaffected by this rule, 
as the segment of the market they serve would not be candidates for 
POVs.
    Second, physicians and treating practitioners gained a great deal 
of important new guidance through our recent coverage decision. The 
newly added classes of treating practitioners will benefit in their 
ability to serve their patients by prescribing the equipment most 
suitable to their needs. These costs do not rise to the level of 
``significant'' within the standards of the RFA, but we nonetheless 
plan to ameliorate them through additional payment when PMDs are 
prescribed.
    Third, suppliers of durable medical equipment include thousands of 
firms, both large and ``small'' within the RFA definitions. The 
principal effect of this rule on these suppliers will be to increase 
their ability to assure that prescriptions are valid (in terms of 
medical necessity) before they supply equipment to beneficiaries, and 
that they will therefore be reimbursed for equipment they supply. This 
is a positive effect rather than a negative effect (the RFA requires 
consideration of alternatives that minimize adverse impacts). As 
previously indicated, we believe that there are few if any alternatives 
to this rule that would provide higher benefits.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because we have 
determined and the Secretary certifies that this rule will not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits before issuing any 
rule whose requirements mandate the expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $100 million in 1995 dollars, adjusted for subsequent 
inflation (that threshold is now approximately $120 million). This rule 
contains no mandates other than that for documentation of 
prescriptions, and hence does not remotely approach that cost 
threshold.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This regulation does not impose any costs or burden on 
State or local governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural 
areas, X-rays.


0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR Chapter IV. In addition, the interim 
regulations published on August 26,

[[Page 17030]]

2005 (70 FR 50940) are confirmed as final and revised as set forth 
below:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
1. The authority citation for part 410 is revised to read as follows:

    Authority: Secs. 1102, 1834, 1871, and 1893 of the Social 
Security Act (42 U.S.C. 1302, 1395m, 1395hh, and 1395ddd).

Subpart B--Medical and Other Health Services

0
2. Section 410.38 is amended by revising paragraph (c) to read as 
follows:


Sec.  410.38  Durable medical equipment: Scope and conditions.

* * * * *
    (c) Power mobility devices (PMDs). (1) Definitions. For the 
purposes of this paragraph, the following definitions apply:
    Physician has the same meaning as in section 1861(r)(1) of the