Medicare Program; Prior Determination for Certain Items and Services, 9672-9679 [E8-2811]
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Rules and Regulations
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Issued in Renton, Washington, on February
11, 2008.
Stephen P. Boyd,
Assistant Manager, Transport Airplane
Directorate, Aircraft Certification Service.
[FR Doc. E8–2994 Filed 2–21–08; 8:45 am]
BILLING CODE 4910–13–P
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Background
The final regulations (TD 9378) that
are the subject of the correction are
under sections 6325, 6503 and 7426 of
the Internal Revenue Code.
Need for Correction
As published, final regulations (TD
9378) contain errors that may prove to
be misleading and are in need of
clarification.
List of Subjects in 26 CFR Part 301
26 CFR Part 301
[TD 9378]
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
AGENCY:
This document contains
corrections to final regulations (TD
9378) that were published in the
Federal Register on Thursday, January
31, 2008 (73 FR 5741) relating to release
of lien and discharge of property under
sections 6325, 6503 and 7423 of the
Internal Revenue Code. These
regulations update existing regulations
and contain procedures for processing a
request made by a property owner for
discharge of a Federal tax lien from his
property under section 6325(b)(4). The
regulations also clarify the impact of
these procedures on sections 6503(f)(2)
and 7426(a)(4) and (b)(5).
DATES: The correction is effective
February 22, 2008.
FOR FURTHER INFORMATION CONTACT:
Debra A. Kohn, (202) 622–7985 (not a
toll-free number).
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SUMMARY:
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Medicare Program; Prior Determination
for Certain Items and Services
SUMMARY: This final rule establishes a
process for Medicare contractors to
provide eligible participating physicians
and beneficiaries with a determination
of coverage relating to medical necessity
for certain physicians’ services before
the services are furnished. This rule is
intended to afford the physician and
beneficiary the opportunity to know the
financial liability for a service before
expenses are incurred. This final rule
establishes reasonable limits on
physicians’ services for which a prior
determination of coverage may be
requested and discusses generally our
plans for establishing the procedures by
which those determinations may be
obtained. This rule also responds to
public comments on the August 30,
2005 proposed rule.
Accordingly, 26 CFR part 301 is
corrected by making the following
amendments:
I
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation
for part 301 continues to read, in part,
as follows:
I
Release of lien or discharge
*
Release of Lien or Discharge of
Property; Correction
RIN 0938–AN10
Correction of Publication
§ 301.6025–1
of property.
RIN 1545–BE35
[CMS–6024–F]
AGENCY:
I Par. 2. Section 301.6325–1 is
amended by revising the second
sentence of paragraph (b)(2)(i) and first
sentence of paragraph (b)(4)(ii) to read
as follows:
Internal Revenue Service
42 CFR Part 410
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Authority: 26 U.S.C. 7805 * * *
DEPARTMENT OF THE TREASURY
Centers for Medicare & Medicaid
Services
*
*
*
*
(b) * * *
(2) * * *
(i) * * * In determining the amount
to be paid, the appropriate official will
take into consideration all the facts and
circumstances of the case, including the
expenses to which the government has
been put in the matter. * * *
*
*
*
*
*
(4) * * *
(ii) * * * The appropriate official
may, in his discretion, determine that
either the entire unsatisfied tax liability
listed on the notice of Federal tax lien
can be satisfied from a source other than
the property sought to be discharged, or
the value of the interest of the United
States is less than the prior
determination of such value. * * *
*
*
*
*
*
LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. E8–3103 Filed 2–21–08; 8:45 am]
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Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION:
DATES:
Final rule.
Effective Date: March 24, 2008.
FOR FURTHER INFORMATION CONTACT:
Debbie Skinner, (410) 786–7480.
SUPPLEMENTARY INFORMATION:
I. Background
A. Background of Rulemaking
On August 30, 2005, we published a
rule (70 FR 51321) proposing to
implement section 938 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub.
L. 108–173, enacted on December 8,
2003), establishing the reasonable limits
on physicians’ services for which a prior
determination of coverage may be
requested and we discussed our plans
for establishing the procedures by
which those determinations may be
obtained.
The notice and comment period
closed on October 29, 2005. We received
seven timely public comments, which
were useful in identifying issues and
concerns. We have made changes to this
final rule to address the public
comments.
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B. Overview of Existing Statutes and
Policies
Section 1862(a)(1)(A) of the Social
Security Act (the Act) prohibits
Medicare payments for items and
services that are not reasonable and
necessary for the diagnosis and
treatment of an illness or injury.
However, section 1879 of the Act
provides that under certain
circumstances Medicare will pay for
services that are not considered
reasonable and necessary if both the
beneficiary and physician did not know
and could not have reasonably been
expected to know that Medicare
payment would not be made.
A physician may be held financially
liable for noncovered services he or she
furnishes if, for example, the Medicare
contractor or CMS publishes specific
requirements for those services or the
physician has received a denial or
reduction of payment for the same or
similar service under similar
circumstances. In cases where the
physician believes that the service may
not be covered as reasonable and
necessary, an acceptable advance notice
of Medicare’s possible denial of
payment must be given to the patient if
the physician does not want to accept
financial responsibility for the service.
These notices are referred to as Advance
Beneficiary Notices (ABNs).
ABNs must be given in writing, in
advance of providing the service. They
must include: the description of the
service; an explanation of why the
service may not be covered; a good faith
cost estimate for the service; and the
beneficiary’s signature indicating the
beneficiary has received and understood
the notice.
ABNs enable beneficiaries to make an
informed decision about whether or not
to receive an item or service that could
potentially be denied as not reasonable
and necessary. Currently, there is no
process for the beneficiary or his or her
physician to find out with greater
certainty if that item or service would be
considered reasonable and necessary for
that beneficiary before incurring
financial liability. Consequently,
beneficiaries may still be discouraged
from obtaining services because they are
uncertain whether or not Medicare
contractors will deem those services
reasonable and necessary in their
particular case.
To address this issue, section 938 of
the MMA requires the Secretary to
establish a process whereby eligible
requesters may submit to the contractor
a request for a determination, before the
furnishing of the physician’s service, as
to whether the physician’s service is
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covered and consistent with the
applicable requirements of section
1862(a)(1)(A) of the Act (relating to
medical necessity). This MMA section
also provides that the following are
eligible requesters: a participating
physician, but only with respect to
physicians’ services to be furnished to
an individual who is entitled to benefits
and who has consented to the physician
making the request for those services;
and an individual entitled to benefits,
but only with respect to a physician’s
service for which the individual
receives an ABN under section 1879(a)
of the Act.
Requesting a prior determination
under this process is at the discretion of
the eligible beneficiary or physician.
Full knowledge regarding financial
liability for the service would be
available to physicians and beneficiaries
before expenses are incurred, but prior
determination of coverage is not
required for submission of a claim. If the
physician wants a prior determination,
there must first be consent from the
beneficiary. In cases where a prior
determination has been requested, an
ABN should only be provided if the
beneficiary wants the procedure and (1)
the prior determination confirms
noncoverage; or (2) a decision could not
be made because requested materials
were not received; or (3) the decision on
the prior determination has not yet been
received. We note that if the decision is
favorable, then an ABN is unnecessary.
This final rule establishes reasonable
limits on the physicians’ services for
which a prior determination of coverage
may be requested and discusses
generally our plans for establishing the
process by which prior determinations
may be obtained. The procedures that
Medicare contractors would use to make
the determinations will be established
in our manuals.
II. Provisions of the Proposed Rule
In 42 CFR 410.20(d)(1), we proposed
to define a prior determination of
medical necessity as a decision by a
Medicare contractor, before a
physician’s service is furnished, as to
whether or not the physician’s service is
covered consistent with the
requirements of section 1862(a)(1)(A) of
the Act relating to medical necessity.
In § 410.20(d)(2), we proposed that
each Medicare contractor must, through
the procedure established in CMS
instructions, allow requests for prior
determinations from eligible requesters
under the contractor’s respective
jurisdiction for those services identified
by CMS and posted on that specific
Medicare contractor’s Web site.
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We proposed that each contractor’s
list would consist of the following: At
least the 50 most expensive physicians’
services listed in the Medicare
Physician Fee Schedule (MPFS)
Database performed at least 50 times
annually minus those services excluded
by § 410.20(d)(3)(with adequate national
or local coverage determinations); and
plastic and dental surgeries that may be
covered by Medicare and that have an
average allowed charge of at least
$1,000.
In § 410.20(d)(3), we proposed that
those services for which there is a
national coverage determination (NCD)
in effect or a local coverage
determination/local medical review
policy (LCD/LMRP) in effect through the
local contractor at the time of the
request for prior determination would
not be eligible for prior determination.
This exclusion only applies when the
NCD or LCD/LMRP, in CMS’ judgment,
provides the sufficiently specific
reasonable and necessary criteria for the
specific procedure for which the prior
determination is requested.
In § 410.20(d)(4), we proposed that
CMS may increase the number of
services in the initial pool that are
eligible for prior determination (over the
minimum of 50) through manual
instructions. Our reason for this
provision was to ensure that CMS can
provide for prior determinations for
additional services when we detect a
need. Sections 1869(h)(3) through (h)(6)
of the Act are specific with respect to
various aspects of the prior
determination process. Therefore, in
§ 410.20(d)(5), we specified those
mandatory provisions. The detailed
procedures to be followed by our
contractors would be published in our
manual instructions. Section
410.20(d)(5)(i) generally explained the
prior determination process and
accompanying documentation that may
be required. Section 410.20(d)(5)(ii)
described how contractors will respond
to prior determination requests. The
statute requires that contractors must
mail the requester the decision no later
than 45 days after the request is
received. Section 410.20(d)(5)(iii)
explained the binding nature of a
positive determination. Section
410.20(d)(5)(iv) explained the limitation
on further review.
III. Analysis of and Response to Public
Comments
We received seven public comments
on the proposed rule. Summaries of the
comments received and our responses to
those comments are set forth below.
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General
Comment: One commenter asked
CMS to ensure that physicians give their
patients ABNs only when they have
analyzed a particular procedure and
have formed a reasonable belief that it
may not be covered.
Response: Regulations governing
ABNs and other notices of noncoverage,
meeting the requirements of section
1879 of the Act, are found at 42 CFR
411.408. Instructions specific to the
ABN are found in the on-line Medicare
Claims Processing Manual, Publication
100–04, Chapter 30. This comment will
be considered by the agency, but is
beyond the scope of this regulation.
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List of Eligible Services
Comment: We received several
comments recommending that the list of
services eligible for prior determination
be expanded. Several of these
commenters suggested the list of 50
eligible services should be expanded,
while another commenter suggested that
CMS should include all services above
a certain dollar amount.
Response: We are revising
§ 410.20(d)(2) of this final rule to
include a provision that will allow us to
expand or contract the number of
services eligible for prior determination
in the future through manual
instructions. We are also allowing prior
determinations for plastic and dental
surgeries over $1,000.
We did not include all services above
a certain dollar amount because
administrative constraints necessitate
that we control the number of eligible
services. Using a monetary cut-off
would lead to uncertainty regarding
how many services would be eligible in
subsequent years due to inflation cost of
the services.
Comment: Several commenters agreed
with our approach that allows plastic
and dental surgeries to be eligible for
prior determination since many
providers and beneficiaries currently
have no way of knowing whether these
services will be considered reasonable
and necessary.
Response: We agree that this approach
will be beneficial to both providers and
beneficiaries.
Comment: One commenter suggested
that CMS take the denial rate into
account when determining which
services are eligible for prior
determination.
Response: For administrative
consistency and other reasons, we chose
to focus on cost. Denial rates are
contractor specific and therefore are not
applicable to a list formulated for the
entire nation. Additionally, although a
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service may have a relatively high
denial rate, that number may be
insignificant depending on the number
of services performed annually.
Exclusion of Services for Which There Is
a Local Coverage Determination (LCD)
or National Coverage Determination
(NCD)
Comment: We received several
comments stating that CMS should not
exclude from the list of eligible services
those services for which there is an LCD
or an NCD in place. One commenter
stated that beneficiaries will not have
access to LCDs. Several stated that a
beneficiary requester would not
necessarily understand the LCD or NCD,
and it would not provide them with
enough information to make an
informed decision. Several commenters
indicated concern that the LCD or NCD
would not be clear enough to provide
the requester with information to make
an informed decision.
Response: We have clarified
§ 410.20(d)(3) to state that services for
which there is an NCD or LCD in place
will remain on the ‘‘list of eligible
services.’’ In cases where the NCD or
LCD provides sufficiently specific
reasonable and necessary criteria
addressing the particular clinical
indication for the physician’s service for
which the prior determination is
requested, the NCD or LCD will serve as
the prior determination. Requesters will
be sent a copy of the NCD or LCD with
an explanation that this NCD/LCD will
serve as the prior determination because
it provides the necessary information for
the beneficiary or provider to know
whether or not the service will be
considered reasonable and necessary.
These explanations should also contain
summary information clear enough for
providers and beneficiaries alike to
understand what is covered and what is
not covered. In cases where the NCD or
LCD does not provide sufficiently
specific reasonable and necessary
criteria addressing the particular
clinical indication for the physician’s
service at issue, requesters will be sent
a prior determination that is not based
upon the NCD/LCD.
Comment: One commenter wanted to
know how CMS would make the
determination as to whether the LCD/
NCD in question provides sufficiently
specific reasonable and necessary
criteria for the procedure for which the
prior determination is requested.
Response: The contractors will make
that decision by reviewing the LCD or
NCD to determine whether or not the
specific reasonable and necessary
criteria addressing the particular
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clinical indication for the procedure is
addressed by the LCD.
Comment: Several commenters
suggested that since section 938 of the
MMA requires CMS to include a copy
of any relevant LCD or NCD with the
prior determination decision, those
services should not be initially
excluded.
Response: We have clarified that
services for which there is an NCD or
LCD in place will not be excluded and
will remain on the ‘‘list of eligible
services,’’ if they meet the other criteria
for being placed on the list. In cases
where the relevant LCD or NCD
provides sufficiently specific reasonable
and necessary criteria addressing the
particular clinical indication for the
physician’s service at issue, the
contractor will include a copy of the
NCD or LCD with the decision of
noncoverage, in accordance with section
938 of the MMA.
Comment: One commenter asked how
CMS plans to handle instances where
the specific clinical situation
determines whether or not a service is
medically necessary per an LCD or an
NCD or how borderline cases will be
handled (that is, physicians might
disagree as to whether clinical criteria
in the LCD are met).
Response: It will be up to the
contractor to determine whether the
clinical criteria in the NCD or LCD are
met.
Comment: One commenter asked
whether contractors would develop
LCDs solely in response to a high
volume of prior determination requests.
Response: Contractors will continue
to develop LCDs in accordance with
instructions in CMS manuals.
Processing Timeframe
Comment: We received several
comments stating that the 45-day
processing time is too long to be helpful
to the beneficiary or provider.
Response: Section 410.20(d)(5)(ii)
requires that ‘‘* * * notice will be
provided within 45 days (the same time
period as the time period applicable to
the contractor providing notice of initial
determinations on a claim for benefits
under section 1869 (a)(2)(A) of the
Act).’’ Contractors will be instructed to
process requests and send out responses
as quickly as possible, taking into
consideration the beneficiary’s physical
condition, the urgency of treatment, and
the availability of the necessary
documentation.
Miscellaneous Comments
Comment: Several commenters
suggested that CMS needs to clarify how
information on this process (including
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the list of eligible services) will be
disseminated to providers and
beneficiaries.
Response: In addition to using the
contractors’ Web sites, we are looking
into a number of ways to disseminate
the information to both providers and
beneficiaries. We will issue manual
instructions regarding the list of eligible
services.
Comment: One commenter stated that
CMS should investigate the possibility
of allowing for submission of prior
determination requests electronically.
Response: We do not intend to accept
these requests electronically. We do not
consider this a ‘‘prior authorization,’’ for
which there is an electronic form, but
rather a coverage determination request.
(See the statutory excerpt in
§ 410.20(d)(5)(ii)(A)(3), specifically
calling this decision a coverage
determination.) This is an optional
process, and it does not preclude either
the beneficiary or the provider from
obtaining or performing the service and
submitting the claim for payment.
Comment: Several commenters stated
that the regulation should include how
frequently the list will be updated.
Another commenter stated that
contractors should be required to
provide written notice of any changes to
the list to providers and beneficiaries.
Response: We agree with the
commenters that the regulation should
include how frequently the list will be
updated. In § 410.20(d)(2), we have
added a phrase to state that the list will
be updated annually in conjunction
with the release of the MPFS. Written
notice will be provided, at a minimum,
on the contractors’ Web sites.
Comment: One commenter stated that
the process the contractors use should
be subject to notice and comment.
Response: The statute provides the
basic process contractors are to follow
when processing requests (that is, who
can make a request, what is to be
included in a request, what is to be
included in a response, processing
timeframe, requester rights following a
negative determination, and, requester
rights not to request a prior
determination). The statutory process to
be used by contractors was included in
the proposed rule and was subject to
comment. The detailed administrative
matters will be in the manuals, which
will allow us the flexibility to modify
the administrative issues quickly if we
find the procedures could be performed
in a more effective manner. Contractors
must adhere to policy as stipulated in
CMS manuals.
Comment: One commenter stated the
list of 50 services should be subject to
notice and comment. One commenter
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also suggested that any additional
services added under § 410.20(d)(4)
should be subject to comment.
Response: The criteria we will use to
select the list of services were provided
in the August 2005 proposed rule (70 FR
51321) and were subject to public
comment. This list will be updated
annually based on the MPFS, which is
also available to the public. Because the
list will be determined annually based
on a ministerial execution of the
already-published criteria, rather than
the adoption of new substantive rules,
we do not believe that any further
opportunity for public comment is
either required by law or useful.
Additionally, we do not believe it is
prudent to solicit comments on the
specific services since the list is not
static and will change based on the fee
schedule.
Comment: One commenter stated that
the list of eligible services should be
available to providers and beneficiaries
somewhere other than the contractor’s
Web site.
Response: We agree that this would be
helpful. We are looking into a number
of other ways to disseminate the
information to both providers and
beneficiaries. We will issue manual
instructions regarding the list of eligible
services. The list will be available by
calling 1–800–Medicare and on the
www.Medicare.gov Web site.
Comment: One commenter stated that
the regulation should specify that the
requestor be given written notice.
Response: We agree with the
commenter and have clarified in
§ 410.20(d)(5)(ii)(A) that the requester
must receive written notice, as required
by statute.
Comment: One commenter stated that
the notice of non-coverage should also
be required to explain that someone
who receives such a notice may still
obtain the service, submit a claim to
Medicare, and then appeal the claim if
it is denied.
Response: We agree with the
commenter. Section 410.20(d)(5)(iv)(B)
of the regulation provides that a
negative determination does not impact
the right of the requester to obtain
services and appeal any denial under
the existing claims appeals system.
Through our manuals, we will require
contractors to include that information
in the prior determination notice, where
there is a negative determination.
Comment: One commenter stated that
the regulation should include recourse
to the beneficiary, and a consequence to
the provider, if a provider fails to
submit the necessary accompanying
documentation.
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Response: With regard to instances
where the provider fails to submit the
necessary documentation,
§ 410.20(d)(5)(ii)(B)(2) provides that if a
contractor makes a determination that it
lacks sufficient information to make a
coverage determination with respect to
a physician’s service, the contractor will
include in the notice a description of
the additional information that was
required to make a coverage
determination, as required by the
statute. We believe this provides the
type of recourse to beneficiaries to cure
flaws in their original requests that the
Congress intended.
Comment: One commenter requested
that we clarify what we mean by
‘‘plastic and dental surgeries that have
an average allowed charge of at least
$1,000.’’
Response: We have clarified in
§ 410.20(d)(2)(ii) that we mean at least
$1,000 based on the MPFS amount, (not
including the adjustment for location by
the geographic practice cost index
(GPCI)).
Comment: One contractor requested
that CMS provide contractors with the
necessary resources to implement this
process, and suggested that contractors
be part of the development of the
process.
Response: With contractor input, we
will determine the resources and
instructions the contractors will need to
implement this process. Contractors will
be involved in the necessary clearance
processes.
Comment: One commenter requested
that CMS clarify how contractors should
handle requests submitted for services
not on the list of eligible services.
Response: The detailed procedures
specified in our manual instructions
will include a provision that the
contractor will send back the request
with an explanation that it is not an
eligible service.
Comment: One commenter asked us
to clarify in the regulation text whether
or not services receiving an affirmative
prior determination decision are still
subject to eligibility and reimbursement
criteria.
Response: Yes, services receiving
affirmative prior determinations are still
subject to eligibility and reimbursement
criteria when adjudicated on a claim.
IV. Provisions of the Final Rule
Section 1869(h)(1) of the Act, as
added by section 938 of the MMA,
requires the Secretary to establish a
prior determination process for certain
physicians’ services. Sections 1869(h)(3)
through (h)(6) of the Act are specific
with respect to various aspects of the
prior determination process, and we
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intend to follow these provisions in
establishing the prior determination
process. We will issue the detailed
procedures through our instructions to
contractors in our manuals.
Section 1869(h)(2) of the Act, as
added by section 938 of the MMA,
requires the Secretary to establish by
regulation reasonable limits on the
physicians’ services for which a prior
determination may be requested. This
section provides that in establishing the
reasonable limits, the Secretary may
consider the dollar amount involved
with respect to the physician’s service,
administrative costs and burdens, and
other relevant factors.
We evaluated national data on
physicians’ services including payment
amounts, utilization, and denial rates.
We considered using denial rates as one
of the determining factors. However,
denial rates vary according to
contractor, and although a service may
have a relatively high denial rate, that
number may be insignificant depending
on the number of services performed
annually. This information did not
readily lend itself to establishing a
national list. Accordingly, we have
decided to use other factors instead.
Based on our analysis, we are
establishing an initial pool of eligible
physicians’ services with the highest
average allowed charges that are
performed at least 50 times annually.
The definition of physicians’ services in
the MMA provision (section 938) is the
one in section 1848(j)(3) of the Act. The
definition includes the physician
administration of a drug (but not the
cost of the drug itself) and certain
services not traditionally performed by
a physician, such as physical therapy
and occupational therapy, which are
paid using the MPFS.
We are also establishing a list of
plastic and dental surgeries that may be
covered by Medicare and that have an
amount of at least $1,000 in the MPFS
(not including the adjustment for
location by the GPCI). We will identify
the specific services that are eligible for
prior determinations through manual
instructions based on the criteria
outlined in the regulation. We have
decided not to identify a specific
number of eligible services in the
regulation text in order to provide the
agency with flexibility in identifying an
adequate/sufficient list of services
eligible for prior determinations.
Specifically, in § 410.20(d)(1)(i), we
define a ‘‘prior determination of medical
necessity’’ as an individual decision by
a Medicare contractor, before a
physician’s service is furnished, as to
whether or not the physician’s service is
covered consistent with the
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requirements of section 1862(a)(1)(A) of
the Act relating to medical necessity.
We have also incorporated the statutory
definition of an ‘‘eligible requester,’’
which had been included in the
preamble to the proposed rule, into the
regulatory text. Therefore, in
§ 410.20(d)(1)(ii), we define an ‘‘eligible
requester’’ to include a participating
physician or a physician who accepts
assignment, but only with respect to
physicians’ services to be furnished to
an individual who is entitled to receive
benefits and who has consented to the
physician making the request for those
physician’s services; and an individual
entitled to benefits, but only with
respect to a physician’s service for
which the individual receives, from a
physician, an advance beneficiary
notice under section 1879(a) of the Act.
We clarified that physicians who accept
assignment for services eligible for a
prior determination are eligible
requesters because this is consistent
with the statute and will maximize the
benefit of the prior determination
process for beneficiaries.
In § 410.20(d)(2), we state that each
Medicare contractor will, through the
procedure established in our manual
instructions, allow requests for prior
determinations of medical necessity
from eligible requesters under the
contractor’s respective jurisdiction for
those services that we identify (updated
in conjunction with the update to the
MPFS) and posted on that specific
Medicare contractor’s Web site. Only
those services listed on the contractor’s
Web site on the date the request for a
prior determination is made would be
subject to prior determination.
The list of services will be posted by
the Healthcare Common Procedure
Coding System procedure code and
code description on each carrier’s Web
site and will include the following: The
most expensive physicians’ services
included in the MPFS which are
performed at least 50 times annually;
and plastic and dental surgeries that
may be covered by Medicare and that
have an amount of at least $1,000 (not
including adjustment for location by the
GPCI).
We have three reasons for establishing
the limit on physicians’ services based
on the dollar amount of the service and
including certain plastic and dental
surgeries. First, beneficiaries are more
likely to be discouraged from obtaining
the most expensive physicians’ services
because they are uncertain whether or
not they would have to incur financial
liability if Medicare does not pay for the
service. The plastic and dental surgeries
included are also relatively expensive,
and there may be significant individual
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considerations in determining what is
covered and what is excluded. Second,
the majority of these services tend to be
non-emergency surgical procedures
generally performed in an inpatient
setting. Since these services are not
typically emergency services,
beneficiaries would have adequate time
to request a prior determination. Third,
limiting prior determinations to these
services is reasonable given the
administrative resources required to
process each prior determination
request.
In § 410.20(d)(3), we state that in
instances where an NCD or an LCD
exists that has sufficiently specific
reasonable and necessary criteria
addressing the particular clinical
indication for the physician’s service for
which the prior determination is
requested, the contractor will send a
copy of the LCD or NCD with an
explanation that this NCD/LCD will
serve as the prior determination. Our
reason for this provision is that many
NCDs and LCDs already provide the
information necessary to make an
informed decision about whether or not
a service will be covered.
In § 410.20(d)(4), we state that we will
identify through manual instructions
the number of services that are eligible
for a prior determination consistent
with the criteria established in the
regulation. Our reason for this provision
is to ensure that we can adjust the
number of eligible services when we
detect a need.
Sections 1869(h)(3) through (h)(6) of
the Act are specific with respect to
various aspects of the prior
determination process. Therefore, in
§ 410.20(d)(5), we specify those
mandatory provisions. The detailed
procedures to be followed by our
contractors will be published in our
manual instructions. Section
410.20(d)(5)(i) generally explains the
prior determination process and
accompanying documentation that may
be required. Section 410.20(d)(5)(ii)
describes how contractors will respond
to prior determination requests. Section
938 of the MMA provides that notice
will be provided ‘‘within the same time
period as the time period applicable to
the contractor providing notice of initial
determinations on a claim for benefits
under section 1869(a)(2)(A) of the Act.’’
Therefore, the statute requires that
contractors must mail the requester the
decision no later than 45 days after the
request is received. Contractors will be
instructed to process the requests as
quickly as possible (but no longer than
45 days), taking into consideration the
beneficiary’s physical condition, the
urgency of treatment, and the
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Rules and Regulations
availability of the necessary
documentation. Section 410.20(d)(5)(iii)
explains the binding nature of a positive
determination. Section 410.20(d)(5)(iv)
explains the limitation on further
review.
V. Collection of Information
Requirements
Under the Paperwork Reduction Act
(PRA) of 1995, we are required to
provide 30-day notice in the Federal
Register and solicit public comment
before a collection of information
requirement is submitted to the Office of
Management and Budget (OMB) for
review and approval. In order to fairly
evaluate whether or not an information
collection should be approved by OMB,
section 3506(c)(2)(A) of the PRA of 1995
requires that we solicit comment on the
following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
We are soliciting public comment on
each of these issues for the following
sections of this document that contain
information collection requirements
(ICRs):
Section 410.20
Physicians’ Services
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Prior Determination of Medical
Necessity for Physicians’ Services
Section 410.20(d)(5) states that before
a physician’s service is furnished, an
eligible requester, such as a physician or
beneficiary, may request an
individualized decision, a ‘‘Prior
Determination of Medical Necessity,’’ by
a Medicare contractor as to whether or
not the physician’s service is covered
consistent with the requirements of
section 1862(a)(1)(A) of the Act relating
to medical necessity. CMS may require
that the request be accompanied by a
description of the physician’s service,
supporting documentation relating to
the medical necessity of the physician’s
service, and other appropriate
documentation. In the case of a request
submitted by an eligible requestor who
is described in section 1869(h)(1)(B)(ii)
of the Act, the Secretary may also
require that the request be accompanied
by a copy of the advance beneficiary
notice involved.
The burden associated with this
requirement would be the time spent by
a requester to provide the appropriate
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14:24 Feb 21, 2008
Jkt 214001
level of documentation, as outlined in
this section, to a Medicare contractor so
that the contractor can provide a ‘‘Prior
Determination of Medical Necessity.’’
We estimate 5,000 requests will be
made on an annual basis, and it will
require 15 minutes per request, for an
annual burden of 1,250 hours.
We received one comment in
response to the proposed rule stating
that this estimate appeared to be too
low. We stand by our original estimate
that 5,000 requests will be made on an
annual basis and it will require 15
minutes per request, for an annual
burden of 1,250 hours.
If you comment on these information
collection and record keeping
requirements, please mail copies
directly to the following: Centers for
Medicare & Medicaid Services, Office of
Strategic Operations and Regulatory
Affairs, Division of Regulations
Development, Attn.: Melissa Musotto,
CMS–6024–F, Room C5–14–03, 7500
Security Boulevard, Baltimore, MD
21244–1850. Office of Information and
Regulatory Affairs, Office of
Management and Budget, Room 10235,
New Executive Office Building,
Washington, DC 20503, Attn: Carolyn
Lovett, CMS Desk Officer, CMS–6024–F,
carolyn_lovett@omb.eop.gov. Fax (202)
395–6974.
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 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
major rules with economically
significant effects ($100 million or more
in any 1 year). This rule does not reach
the economic threshold and thus is not
considered a major rule. Furthermore,
this rule will not result in an increase
in benefit spending.
The RFA requires agencies to analyze
options for regulatory relief of small
businesses. For purposes of the RFA,
small entities include small businesses,
non-profit organizations, and
government jurisdictions. While most
hospitals and most other providers and
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9677
suppliers are small entities, either by
non-profit status or by having revenues
of $6.5 million to $31.5 million in any
1 year, individual physicians and
beneficiaries are not included in the
definition of a small entity.
Accordingly, we are not preparing an
analysis for the RFA because we have
determined that this rule will not have
a significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the 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
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 also
requires that agencies assess anticipated
costs and benefits before issuing any
rule that may result in expenditure in
any 1 year by State, local, or tribal
governments, in the aggregate, or by the
private sector, of $120 million. This rule
will have no consequential effect on the
governments mentioned or on the
private sector.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a final
rule (and subsequent final rule) that
imposes substantial direct requirement
costs on State and local governments,
preempts State law, or otherwise has
Federalism implications. Since this
regulation will not impose any costs on
State or local governments, the
requirements of E.O. 13132 are not
applicable.
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.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR
chapter IV as set forth below:
I
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9678
Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Rules and Regulations
PART 410—SUPPLEMENTARY
MEDICAL INSURANCE (SMI)
BENEFITS
Subpart B—Medical and Other Health
Services
1. The authority citation for part 410
continues to read as follows:
I
Authority: Sections 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
2. Section 410.20 is amended by
adding new paragraph (d) to read as
follows:
I
§ 410.20
Physicians’ services.
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*
*
*
*
*
(d) Prior determination of medical
necessity for physicians’ services—(1)
Definitions. (i) A ‘‘Prior Determination
of Medical Necessity’’ means an
individual decision by a Medicare
contractor, before a physician’s service
is furnished, as to whether or not the
physician’s service is covered consistent
with the requirements of section
1862(a)(1)(A) of the Act relating to
medical necessity.
(ii) An ‘‘eligible requester’’ includes
the following:
(A) A participating physician (or a
physician that accepts assignment), but
only with respect to physicians’ services
to be furnished to an individual who is
entitled to receive benefits under this
part and who has consented to the
physician making the request under this
section for those physicians’ services.
(B) An individual entitled to benefits
under this part, but only with respect to
physicians’ services for which the
individual receives, from a physician,
an advance beneficiary notice under
section 1879(a) of the Act.
(2) General rule. Each Medicare
contractor will, through the procedures
established in CMS manual instructions,
allow requests for prior determinations
of medical necessity from eligible
requesters under its respective
jurisdiction for those services identified
by CMS (updated annually in
conjunction with the update to the
MPFS and posted on that specific
Medicare contractor’s Web site by the
Healthcare Common Procedure Coding
System procedure code and code
description). Only those services listed
on that Medicare contractor’s Web site
on the date the request for a prior
determination is made are subject to
prior determination. Each contractor’s
list will consist of the following:
(i) The national list, provided by
CMS, of the most expensive physicians’
services (as defined in section 1848(j)(3)
of the Act) included in the MPFS which
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14:24 Feb 21, 2008
Jkt 214001
are performed at least 50 times
annually.
(ii) The national list, provided by
CMS, of plastic and dental surgeries that
may be covered by Medicare and that
have an amount of at least $1,000 on the
MPFS (not including the adjustment for
location by the GPCI).
(3) Services with local coverage
determinations (LCDs) or national
coverage determinations (NCDs). In
instances where an LCD or an NCD
exists that has sufficiently specific
reasonable and necessary criteria
addressing the particular clinical
indication for the procedure for which
the prior determination is requested, the
contractor will send a copy of the LCD
or NCD to the requestor along with an
explanation that the LCD or NCD serves
as the prior determination and that no
further determination will be made.
(4) Identification of eligible services.
CMS will identify the number of
services that are eligible for a prior
determination through manual
instructions consistent with the criteria
established in the regulation.
(5) Statutory procedures. Under
sections 1869(h)(3) through (h)(6) of the
Act, the following procedures apply:
(i) Request for prior determination—
(A) In general. An eligible requester may
submit to the contractor a request for a
determination, before the furnishing of
a physician’s service, as to whether the
physician’s service is covered under this
title consistent with the applicable
requirements of section 1862(a)(1)(A) of
the Act (relating to medical necessity).
(B) Accompanying documentation.
CMS may require that the request be
accompanied by a description of the
physician’s service, supporting
documentation relating to the medical
necessity of the physician’s service, and
other appropriate documentation. In the
case of a request submitted by an
eligible requester who is described in
section 1869(h)(1)(B)(ii) of the Act, the
Secretary may require that the request
also be accompanied by a copy of the
advance beneficiary notice involved.
(ii) Response to request—(A) General
rule. The contractor will provide the
eligible requester with written notice of
a determination as to whether—
(1) The physician’s service is covered
(the physician’s service is covered
consistent with the requirements of
section 1862(a)(1)(A) of the Act relating
to medical necessity); or
(2) The physician’s service is not
covered (the physician’s service is not
covered consistent with the
requirements of section 1862(a)(1)(A) of
the Act relating to medical necessity); or
(3) The contractor lacks sufficient
information to make a coverage
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Fmt 4700
Sfmt 4700
determination with respect to the
physician’s service.
(B) Contents of notice for certain
determinations—(1) Coverage. If the
contractor makes the determination
described in paragraph (d)(5)(ii)(A)(1) of
this section, the contractor will indicate
in the prior determination notice that
the physician service is covered
consistent with the requirements of
section 1862(a)(1)(A) of the Act relating
to medical necessity.
(2) Noncoverage. If the contractor
makes the determination described in
paragraph (d)(5)(ii)(A)(2) of this section,
the contractor will include in the notice
a brief explanation of the basis for the
determination, including on what
national or local coverage or
noncoverage determination (if any) the
determination is based, and a
description of any applicable rights
under section 1869(a) of the Act.
(3) Insufficient information. If the
contractor makes the determination
described in paragraph (d)(5)(ii)(A)(3) of
this section, the contractor will include
in the notice a description of the
additional information required to make
the coverage determination.
(C) Deadline to respond. The notice
described in paragraphs (d)(5)(ii)(A)(1)
through (d)(5)(ii)(A)(3) of this section
will be provided by the contractor
within 45 days of the date the request
for a prior determination is received by
the contractor.
(D) Informing beneficiary in case of
physician request. In the case of a
request by a participating physician or
a physician accepting assignment, the
process will provide that the individual
to whom the physician’s service is to be
furnished will be informed of any
determination described in paragraph
(d)(5)(ii)(A)(2) of this section (relating to
a determination of non-coverage). The
beneficiary will also be notified that,
notwithstanding the determination of
non-coverage, the beneficiary has the
right to obtain the physician’s service in
question and have a claim submitted for
the physician’s service.
(iii) Binding nature of positive
determination. If the contractor makes
the determination described in
paragraph (d)(5)(ii)(A)(1) of this section,
that determination will be binding on
the contractor in the absence of fraud or
evidence of misrepresentation of facts
presented to the contractor.
(iv) Limitation on further review—(A)
General rule. Contractor determinations
described in paragraph (d)(5)(ii)(A)(2) of
this section or paragraph (d)(5)(ii)(A)(3)
of this section (relating to pre-service
claims) are not subject to administrative
appeal or judicial review.
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Rules and Regulations
(B) Decision not to seek prior
determination or negative determination
does not impact the right to obtain
services, seek reimbursement, or appeal
rights. Nothing in this paragraph will be
construed as affecting the right of an
individual who—
(1) Decides not to seek a prior
determination under this paragraph
with respect to physicians’ services; or
(2) Seeks such a determination and
has received a determination described
in paragraph (d)(5)(ii)(A)(2) of this
section, from receiving (and submitting
a claim for) those physicians’ services
and from obtaining administrative or
judicial review respecting that claim
under the other applicable provisions of
this part 405 subpart I of this chapter.
Failure to seek a prior determination
under this paragraph with respect to
physicians’ services will not be taken
into account in that administrative or
judicial review.
(C) No prior determination after
receipt of services. Once an individual
is provided physicians’ services, there
will be no prior determination under
this paragraph with respect to those
physicians’ services.
Editorial Note: This document was
received at the Office of the Federal Register
on February 11, 2008.
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
Dated: May 31, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: October 30, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. E8–2811 Filed 2–21–08; 8:45 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 411 and 489
[CMS–6272–F]
RIN 0938–AN27
rmajette on PROD1PC64 with RULES
Medicare Program; Medicare
Secondary Payer (MSP) Amendments
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
SUMMARY: On February 24, 2006, we
published an interim final rule with
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14:24 Feb 21, 2008
Jkt 214001
comment period in the Federal Register
that implemented amendments to the
Medicare Secondary Payer (MSP)
provisions under Title III of the
Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA). The MMA clarified the
MSP provisions regarding the
obligations of primary plans and
primary payers, the nature of the
insurance arrangements subject to the
MSP rules, the circumstances under
which Medicare may make conditional
payments, and the obligations of
primary payers to reimburse Medicare.
In this final rule, we are finalizing
several clarifications made to the MSP
provisions. In addition, we are
responding to public comments on the
February 24, 2006 interim final rule
with comment period that pertain to
these MSP provisions.
DATES: Effective Date: These regulations
are effective on March 24, 2008.
FOR FURTHER INFORMATION CONTACT:
Suzanne Lewis, (410) 786–0970.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Background
Beginning in 1980, the Congress
enacted a series of amendments to
section 1862(b) of the Social Security
Act (the Act) (hereafter referred to as the
Medicare Secondary Payer (MSP)
provisions) to protect the financial
integrity of the Medicare program by
making Medicare a secondary payer,
rather than a primary payer of health
care services, when certain types of
other health care coverage are available.
(Workers’ compensation had already
been primary to Medicare since the
implementation of the original Medicare
statute.) In enacting the MSP provisions,
the Congress intended that the MSP
provisions be construed to make
Medicare a secondary payer to the
maximum extent possible. These
statutory provisions are set forth in
regulations at 42 CFR part 411,
Exclusions From Medicare and
Limitations on Medicare Payment.
On December 8, 2003, the Congress
enacted the Medicare Prescription Drug,
Improvement, and Modernization Act
(MMA) of 2003 (Pub. L. 108–173). The
Congress passed section 301 under Title
III of the MMA to address several
interpretations of the MSP provisions
being pressed by various parties that
would, if ultimately accepted, severely
limit the applicability of the MSP
provisions at considerable expense to
the Medicare program. As discussed in
the February 24, 2006 interim final rule
with comment period (71 FR 9466)
many of these interpretations were
PO 00000
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9679
presented in the context of Federal court
litigation over the meaning of various
MSP provisions. The Congress rejected
these attempts to incorrectly limit the
application and scope of the MSP
statute.
In the MMA, the Congress clarified its
original intent regarding the MSP
provisions under section 1862(b) of the
Act, thereby indicating that these
interpretations were incorrect and that
the Secretary’s interpretations were
accurate. These clarifications were
effective as if enacted on the date of the
original legislation.
Section 301(a) of the MMA amended
section 1862(b)(2)(A)(ii) of the Act to
remove the term ‘‘promptly.’’ This
amendment establishes that various
parties were incorrect in their
interpretation that section
1862(b)(2)(A)(ii) of the Act applied only
if the workers’ compensation law or
plan, liability insurance, or no-fault
insurance has paid or could reasonably
be expected to pay for services
‘‘promptly.’’ This amendment also
added language to section 1862(b)(2)(B)
of the Act to clarify that the Secretary
may make payment subject to
reimbursement if the workers’
compensation law or plan, liability
insurance, or no-fault insurance has not
paid or could not reasonably be
expected to pay for services ‘‘promptly.’’
Section 301(b)(1) of the MMA
amended section 1862(b)(2)(A) of the
Act to clarify the application of the term
‘‘self-insured plan.’’ It establishes that
‘‘an entity that engages in a business,
trade, or profession shall be deemed to
have a self-insured plan if it carries its
own risk (whether by a failure to obtain
insurance, or otherwise) in whole or in
part.’’
Section 301(b)(2)(A) of the MMA
amended section 1862(b)(2)(B) of the
Act to specify that a primary plan, and
an entity that receives payment from a
primary plan, shall reimburse the
appropriate Trust Fund for any payment
that the Secretary makes with respect to
an item or service if it is demonstrated
that the primary plan has or had a
responsibility to make payment with
respect to the item or service. It added
language establishing that a primary
plan’s responsibility for this payment
‘‘may be demonstrated by a judgment, a
payment conditioned upon the
recipient’s compromise, waiver, or
release (whether or not there is a
determination or admission of liability)
of payment for items or services
included in a claim against the primary
plan or the primary plan’s insured, or by
other means.’’
Section 301(b)(3) of the MMA
amended section 1862(b)(2) of the Act to
E:\FR\FM\22FER1.SGM
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Agencies
[Federal Register Volume 73, Number 36 (Friday, February 22, 2008)]
[Rules and Regulations]
[Pages 9672-9679]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2811]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 410
[CMS-6024-F]
RIN 0938-AN10
Medicare Program; Prior Determination for Certain Items and
Services
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule establishes a process for Medicare contractors
to provide eligible participating physicians and beneficiaries with a
determination of coverage relating to medical necessity for certain
physicians' services before the services are furnished. This rule is
intended to afford the physician and beneficiary the opportunity to
know the financial liability for a service before expenses are
incurred. This final rule establishes reasonable limits on physicians'
services for which a prior determination of coverage may be requested
and discusses generally our plans for establishing the procedures by
which those determinations may be obtained. This rule also responds to
public comments on the August 30, 2005 proposed rule.
DATES: Effective Date: March 24, 2008.
FOR FURTHER INFORMATION CONTACT: Debbie Skinner, (410) 786-7480.
SUPPLEMENTARY INFORMATION:
I. Background
A. Background of Rulemaking
On August 30, 2005, we published a rule (70 FR 51321) proposing to
implement section 938 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted on
December 8, 2003), establishing the reasonable limits on physicians'
services for which a prior determination of coverage may be requested
and we discussed our plans for establishing the procedures by which
those determinations may be obtained.
The notice and comment period closed on October 29, 2005. We
received seven timely public comments, which were useful in identifying
issues and concerns. We have made changes to this final rule to address
the public comments.
[[Page 9673]]
B. Overview of Existing Statutes and Policies
Section 1862(a)(1)(A) of the Social Security Act (the Act)
prohibits Medicare payments for items and services that are not
reasonable and necessary for the diagnosis and treatment of an illness
or injury. However, section 1879 of the Act provides that under certain
circumstances Medicare will pay for services that are not considered
reasonable and necessary if both the beneficiary and physician did not
know and could not have reasonably been expected to know that Medicare
payment would not be made.
A physician may be held financially liable for noncovered services
he or she furnishes if, for example, the Medicare contractor or CMS
publishes specific requirements for those services or the physician has
received a denial or reduction of payment for the same or similar
service under similar circumstances. In cases where the physician
believes that the service may not be covered as reasonable and
necessary, an acceptable advance notice of Medicare's possible denial
of payment must be given to the patient if the physician does not want
to accept financial responsibility for the service. These notices are
referred to as Advance Beneficiary Notices (ABNs).
ABNs must be given in writing, in advance of providing the service.
They must include: the description of the service; an explanation of
why the service may not be covered; a good faith cost estimate for the
service; and the beneficiary's signature indicating the beneficiary has
received and understood the notice.
ABNs enable beneficiaries to make an informed decision about
whether or not to receive an item or service that could potentially be
denied as not reasonable and necessary. Currently, there is no process
for the beneficiary or his or her physician to find out with greater
certainty if that item or service would be considered reasonable and
necessary for that beneficiary before incurring financial liability.
Consequently, beneficiaries may still be discouraged from obtaining
services because they are uncertain whether or not Medicare contractors
will deem those services reasonable and necessary in their particular
case.
To address this issue, section 938 of the MMA requires the
Secretary to establish a process whereby eligible requesters may submit
to the contractor a request for a determination, before the furnishing
of the physician's service, as to whether the physician's service is
covered and consistent with the applicable requirements of section
1862(a)(1)(A) of the Act (relating to medical necessity). This MMA
section also provides that the following are eligible requesters: a
participating physician, but only with respect to physicians' services
to be furnished to an individual who is entitled to benefits and who
has consented to the physician making the request for those services;
and an individual entitled to benefits, but only with respect to a
physician's service for which the individual receives an ABN under
section 1879(a) of the Act.
Requesting a prior determination under this process is at the
discretion of the eligible beneficiary or physician. Full knowledge
regarding financial liability for the service would be available to
physicians and beneficiaries before expenses are incurred, but prior
determination of coverage is not required for submission of a claim. If
the physician wants a prior determination, there must first be consent
from the beneficiary. In cases where a prior determination has been
requested, an ABN should only be provided if the beneficiary wants the
procedure and (1) the prior determination confirms noncoverage; or (2)
a decision could not be made because requested materials were not
received; or (3) the decision on the prior determination has not yet
been received. We note that if the decision is favorable, then an ABN
is unnecessary.
This final rule establishes reasonable limits on the physicians'
services for which a prior determination of coverage may be requested
and discusses generally our plans for establishing the process by which
prior determinations may be obtained. The procedures that Medicare
contractors would use to make the determinations will be established in
our manuals.
II. Provisions of the Proposed Rule
In 42 CFR 410.20(d)(1), we proposed to define a prior determination
of medical necessity as a decision by a Medicare contractor, before a
physician's service is furnished, as to whether or not the physician's
service is covered consistent with the requirements of section
1862(a)(1)(A) of the Act relating to medical necessity.
In Sec. 410.20(d)(2), we proposed that each Medicare contractor
must, through the procedure established in CMS instructions, allow
requests for prior determinations from eligible requesters under the
contractor's respective jurisdiction for those services identified by
CMS and posted on that specific Medicare contractor's Web site.
We proposed that each contractor's list would consist of the
following: At least the 50 most expensive physicians' services listed
in the Medicare Physician Fee Schedule (MPFS) Database performed at
least 50 times annually minus those services excluded by Sec.
410.20(d)(3)(with adequate national or local coverage determinations);
and plastic and dental surgeries that may be covered by Medicare and
that have an average allowed charge of at least $1,000.
In Sec. 410.20(d)(3), we proposed that those services for which
there is a national coverage determination (NCD) in effect or a local
coverage determination/local medical review policy (LCD/LMRP) in effect
through the local contractor at the time of the request for prior
determination would not be eligible for prior determination. This
exclusion only applies when the NCD or LCD/LMRP, in CMS' judgment,
provides the sufficiently specific reasonable and necessary criteria
for the specific procedure for which the prior determination is
requested.
In Sec. 410.20(d)(4), we proposed that CMS may increase the number
of services in the initial pool that are eligible for prior
determination (over the minimum of 50) through manual instructions. Our
reason for this provision was to ensure that CMS can provide for prior
determinations for additional services when we detect a need. Sections
1869(h)(3) through (h)(6) of the Act are specific with respect to
various aspects of the prior determination process. Therefore, in Sec.
410.20(d)(5), we specified those mandatory provisions. The detailed
procedures to be followed by our contractors would be published in our
manual instructions. Section 410.20(d)(5)(i) generally explained the
prior determination process and accompanying documentation that may be
required. Section 410.20(d)(5)(ii) described how contractors will
respond to prior determination requests. The statute requires that
contractors must mail the requester the decision no later than 45 days
after the request is received. Section 410.20(d)(5)(iii) explained the
binding nature of a positive determination. Section 410.20(d)(5)(iv)
explained the limitation on further review.
III. Analysis of and Response to Public Comments
We received seven public comments on the proposed rule. Summaries
of the comments received and our responses to those comments are set
forth below.
[[Page 9674]]
General
Comment: One commenter asked CMS to ensure that physicians give
their patients ABNs only when they have analyzed a particular procedure
and have formed a reasonable belief that it may not be covered.
Response: Regulations governing ABNs and other notices of
noncoverage, meeting the requirements of section 1879 of the Act, are
found at 42 CFR 411.408. Instructions specific to the ABN are found in
the on-line Medicare Claims Processing Manual, Publication 100-04,
Chapter 30. This comment will be considered by the agency, but is
beyond the scope of this regulation.
List of Eligible Services
Comment: We received several comments recommending that the list of
services eligible for prior determination be expanded. Several of these
commenters suggested the list of 50 eligible services should be
expanded, while another commenter suggested that CMS should include all
services above a certain dollar amount.
Response: We are revising Sec. 410.20(d)(2) of this final rule to
include a provision that will allow us to expand or contract the number
of services eligible for prior determination in the future through
manual instructions. We are also allowing prior determinations for
plastic and dental surgeries over $1,000.
We did not include all services above a certain dollar amount
because administrative constraints necessitate that we control the
number of eligible services. Using a monetary cut-off would lead to
uncertainty regarding how many services would be eligible in subsequent
years due to inflation cost of the services.
Comment: Several commenters agreed with our approach that allows
plastic and dental surgeries to be eligible for prior determination
since many providers and beneficiaries currently have no way of knowing
whether these services will be considered reasonable and necessary.
Response: We agree that this approach will be beneficial to both
providers and beneficiaries.
Comment: One commenter suggested that CMS take the denial rate into
account when determining which services are eligible for prior
determination.
Response: For administrative consistency and other reasons, we
chose to focus on cost. Denial rates are contractor specific and
therefore are not applicable to a list formulated for the entire
nation. Additionally, although a service may have a relatively high
denial rate, that number may be insignificant depending on the number
of services performed annually.
Exclusion of Services for Which There Is a Local Coverage Determination
(LCD) or National Coverage Determination (NCD)
Comment: We received several comments stating that CMS should not
exclude from the list of eligible services those services for which
there is an LCD or an NCD in place. One commenter stated that
beneficiaries will not have access to LCDs. Several stated that a
beneficiary requester would not necessarily understand the LCD or NCD,
and it would not provide them with enough information to make an
informed decision. Several commenters indicated concern that the LCD or
NCD would not be clear enough to provide the requester with information
to make an informed decision.
Response: We have clarified Sec. 410.20(d)(3) to state that
services for which there is an NCD or LCD in place will remain on the
``list of eligible services.'' In cases where the NCD or LCD provides
sufficiently specific reasonable and necessary criteria addressing the
particular clinical indication for the physician's service for which
the prior determination is requested, the NCD or LCD will serve as the
prior determination. Requesters will be sent a copy of the NCD or LCD
with an explanation that this NCD/LCD will serve as the prior
determination because it provides the necessary information for the
beneficiary or provider to know whether or not the service will be
considered reasonable and necessary. These explanations should also
contain summary information clear enough for providers and
beneficiaries alike to understand what is covered and what is not
covered. In cases where the NCD or LCD does not provide sufficiently
specific reasonable and necessary criteria addressing the particular
clinical indication for the physician's service at issue, requesters
will be sent a prior determination that is not based upon the NCD/LCD.
Comment: One commenter wanted to know how CMS would make the
determination as to whether the LCD/NCD in question provides
sufficiently specific reasonable and necessary criteria for the
procedure for which the prior determination is requested.
Response: The contractors will make that decision by reviewing the
LCD or NCD to determine whether or not the specific reasonable and
necessary criteria addressing the particular clinical indication for
the procedure is addressed by the LCD.
Comment: Several commenters suggested that since section 938 of the
MMA requires CMS to include a copy of any relevant LCD or NCD with the
prior determination decision, those services should not be initially
excluded.
Response: We have clarified that services for which there is an NCD
or LCD in place will not be excluded and will remain on the ``list of
eligible services,'' if they meet the other criteria for being placed
on the list. In cases where the relevant LCD or NCD provides
sufficiently specific reasonable and necessary criteria addressing the
particular clinical indication for the physician's service at issue,
the contractor will include a copy of the NCD or LCD with the decision
of noncoverage, in accordance with section 938 of the MMA.
Comment: One commenter asked how CMS plans to handle instances
where the specific clinical situation determines whether or not a
service is medically necessary per an LCD or an NCD or how borderline
cases will be handled (that is, physicians might disagree as to whether
clinical criteria in the LCD are met).
Response: It will be up to the contractor to determine whether the
clinical criteria in the NCD or LCD are met.
Comment: One commenter asked whether contractors would develop LCDs
solely in response to a high volume of prior determination requests.
Response: Contractors will continue to develop LCDs in accordance
with instructions in CMS manuals.
Processing Timeframe
Comment: We received several comments stating that the 45-day
processing time is too long to be helpful to the beneficiary or
provider.
Response: Section 410.20(d)(5)(ii) requires that ``* * * notice
will be provided within 45 days (the same time period as the time
period applicable to the contractor providing notice of initial
determinations on a claim for benefits under section 1869 (a)(2)(A) of
the Act).'' Contractors will be instructed to process requests and send
out responses as quickly as possible, taking into consideration the
beneficiary's physical condition, the urgency of treatment, and the
availability of the necessary documentation.
Miscellaneous Comments
Comment: Several commenters suggested that CMS needs to clarify how
information on this process (including
[[Page 9675]]
the list of eligible services) will be disseminated to providers and
beneficiaries.
Response: In addition to using the contractors' Web sites, we are
looking into a number of ways to disseminate the information to both
providers and beneficiaries. We will issue manual instructions
regarding the list of eligible services.
Comment: One commenter stated that CMS should investigate the
possibility of allowing for submission of prior determination requests
electronically.
Response: We do not intend to accept these requests electronically.
We do not consider this a ``prior authorization,'' for which there is
an electronic form, but rather a coverage determination request. (See
the statutory excerpt in Sec. 410.20(d)(5)(ii)(A)(3), specifically
calling this decision a coverage determination.) This is an optional
process, and it does not preclude either the beneficiary or the
provider from obtaining or performing the service and submitting the
claim for payment.
Comment: Several commenters stated that the regulation should
include how frequently the list will be updated. Another commenter
stated that contractors should be required to provide written notice of
any changes to the list to providers and beneficiaries.
Response: We agree with the commenters that the regulation should
include how frequently the list will be updated. In Sec. 410.20(d)(2),
we have added a phrase to state that the list will be updated annually
in conjunction with the release of the MPFS. Written notice will be
provided, at a minimum, on the contractors' Web sites.
Comment: One commenter stated that the process the contractors use
should be subject to notice and comment.
Response: The statute provides the basic process contractors are to
follow when processing requests (that is, who can make a request, what
is to be included in a request, what is to be included in a response,
processing timeframe, requester rights following a negative
determination, and, requester rights not to request a prior
determination). The statutory process to be used by contractors was
included in the proposed rule and was subject to comment. The detailed
administrative matters will be in the manuals, which will allow us the
flexibility to modify the administrative issues quickly if we find the
procedures could be performed in a more effective manner. Contractors
must adhere to policy as stipulated in CMS manuals.
Comment: One commenter stated the list of 50 services should be
subject to notice and comment. One commenter also suggested that any
additional services added under Sec. 410.20(d)(4) should be subject to
comment.
Response: The criteria we will use to select the list of services
were provided in the August 2005 proposed rule (70 FR 51321) and were
subject to public comment. This list will be updated annually based on
the MPFS, which is also available to the public. Because the list will
be determined annually based on a ministerial execution of the already-
published criteria, rather than the adoption of new substantive rules,
we do not believe that any further opportunity for public comment is
either required by law or useful. Additionally, we do not believe it is
prudent to solicit comments on the specific services since the list is
not static and will change based on the fee schedule.
Comment: One commenter stated that the list of eligible services
should be available to providers and beneficiaries somewhere other than
the contractor's Web site.
Response: We agree that this would be helpful. We are looking into
a number of other ways to disseminate the information to both providers
and beneficiaries. We will issue manual instructions regarding the list
of eligible services. The list will be available by calling 1-800-
Medicare and on the www.Medicare.gov Web site.
Comment: One commenter stated that the regulation should specify
that the requestor be given written notice.
Response: We agree with the commenter and have clarified in Sec.
410.20(d)(5)(ii)(A) that the requester must receive written notice, as
required by statute.
Comment: One commenter stated that the notice of non-coverage
should also be required to explain that someone who receives such a
notice may still obtain the service, submit a claim to Medicare, and
then appeal the claim if it is denied.
Response: We agree with the commenter. Section 410.20(d)(5)(iv)(B)
of the regulation provides that a negative determination does not
impact the right of the requester to obtain services and appeal any
denial under the existing claims appeals system. Through our manuals,
we will require contractors to include that information in the prior
determination notice, where there is a negative determination.
Comment: One commenter stated that the regulation should include
recourse to the beneficiary, and a consequence to the provider, if a
provider fails to submit the necessary accompanying documentation.
Response: With regard to instances where the provider fails to
submit the necessary documentation, Sec. 410.20(d)(5)(ii)(B)(2)
provides that if a contractor makes a determination that it lacks
sufficient information to make a coverage determination with respect to
a physician's service, the contractor will include in the notice a
description of the additional information that was required to make a
coverage determination, as required by the statute. We believe this
provides the type of recourse to beneficiaries to cure flaws in their
original requests that the Congress intended.
Comment: One commenter requested that we clarify what we mean by
``plastic and dental surgeries that have an average allowed charge of
at least $1,000.''
Response: We have clarified in Sec. 410.20(d)(2)(ii) that we mean
at least $1,000 based on the MPFS amount, (not including the adjustment
for location by the geographic practice cost index (GPCI)).
Comment: One contractor requested that CMS provide contractors with
the necessary resources to implement this process, and suggested that
contractors be part of the development of the process.
Response: With contractor input, we will determine the resources
and instructions the contractors will need to implement this process.
Contractors will be involved in the necessary clearance processes.
Comment: One commenter requested that CMS clarify how contractors
should handle requests submitted for services not on the list of
eligible services.
Response: The detailed procedures specified in our manual
instructions will include a provision that the contractor will send
back the request with an explanation that it is not an eligible
service.
Comment: One commenter asked us to clarify in the regulation text
whether or not services receiving an affirmative prior determination
decision are still subject to eligibility and reimbursement criteria.
Response: Yes, services receiving affirmative prior determinations
are still subject to eligibility and reimbursement criteria when
adjudicated on a claim.
IV. Provisions of the Final Rule
Section 1869(h)(1) of the Act, as added by section 938 of the MMA,
requires the Secretary to establish a prior determination process for
certain physicians' services. Sections 1869(h)(3) through (h)(6) of the
Act are specific with respect to various aspects of the prior
determination process, and we
[[Page 9676]]
intend to follow these provisions in establishing the prior
determination process. We will issue the detailed procedures through
our instructions to contractors in our manuals.
Section 1869(h)(2) of the Act, as added by section 938 of the MMA,
requires the Secretary to establish by regulation reasonable limits on
the physicians' services for which a prior determination may be
requested. This section provides that in establishing the reasonable
limits, the Secretary may consider the dollar amount involved with
respect to the physician's service, administrative costs and burdens,
and other relevant factors.
We evaluated national data on physicians' services including
payment amounts, utilization, and denial rates. We considered using
denial rates as one of the determining factors. However, denial rates
vary according to contractor, and although a service may have a
relatively high denial rate, that number may be insignificant depending
on the number of services performed annually. This information did not
readily lend itself to establishing a national list. Accordingly, we
have decided to use other factors instead.
Based on our analysis, we are establishing an initial pool of
eligible physicians' services with the highest average allowed charges
that are performed at least 50 times annually. The definition of
physicians' services in the MMA provision (section 938) is the one in
section 1848(j)(3) of the Act. The definition includes the physician
administration of a drug (but not the cost of the drug itself) and
certain services not traditionally performed by a physician, such as
physical therapy and occupational therapy, which are paid using the
MPFS.
We are also establishing a list of plastic and dental surgeries
that may be covered by Medicare and that have an amount of at least
$1,000 in the MPFS (not including the adjustment for location by the
GPCI). We will identify the specific services that are eligible for
prior determinations through manual instructions based on the criteria
outlined in the regulation. We have decided not to identify a specific
number of eligible services in the regulation text in order to provide
the agency with flexibility in identifying an adequate/sufficient list
of services eligible for prior determinations.
Specifically, in Sec. 410.20(d)(1)(i), we define a ``prior
determination of medical necessity'' as an individual decision by a
Medicare contractor, before a physician's service is furnished, as to
whether or not the physician's service is covered consistent with the
requirements of section 1862(a)(1)(A) of the Act relating to medical
necessity. We have also incorporated the statutory definition of an
``eligible requester,'' which had been included in the preamble to the
proposed rule, into the regulatory text. Therefore, in Sec.
410.20(d)(1)(ii), we define an ``eligible requester'' to include a
participating physician or a physician who accepts assignment, but only
with respect to physicians' services to be furnished to an individual
who is entitled to receive benefits and who has consented to the
physician making the request for those physician's services; and an
individual entitled to benefits, but only with respect to a physician's
service for which the individual receives, from a physician, an advance
beneficiary notice under section 1879(a) of the Act. We clarified that
physicians who accept assignment for services eligible for a prior
determination are eligible requesters because this is consistent with
the statute and will maximize the benefit of the prior determination
process for beneficiaries.
In Sec. 410.20(d)(2), we state that each Medicare contractor will,
through the procedure established in our manual instructions, allow
requests for prior determinations of medical necessity from eligible
requesters under the contractor's respective jurisdiction for those
services that we identify (updated in conjunction with the update to
the MPFS) and posted on that specific Medicare contractor's Web site.
Only those services listed on the contractor's Web site on the date the
request for a prior determination is made would be subject to prior
determination.
The list of services will be posted by the Healthcare Common
Procedure Coding System procedure code and code description on each
carrier's Web site and will include the following: The most expensive
physicians' services included in the MPFS which are performed at least
50 times annually; and plastic and dental surgeries that may be covered
by Medicare and that have an amount of at least $1,000 (not including
adjustment for location by the GPCI).
We have three reasons for establishing the limit on physicians'
services based on the dollar amount of the service and including
certain plastic and dental surgeries. First, beneficiaries are more
likely to be discouraged from obtaining the most expensive physicians'
services because they are uncertain whether or not they would have to
incur financial liability if Medicare does not pay for the service. The
plastic and dental surgeries included are also relatively expensive,
and there may be significant individual considerations in determining
what is covered and what is excluded. Second, the majority of these
services tend to be non-emergency surgical procedures generally
performed in an inpatient setting. Since these services are not
typically emergency services, beneficiaries would have adequate time to
request a prior determination. Third, limiting prior determinations to
these services is reasonable given the administrative resources
required to process each prior determination request.
In Sec. 410.20(d)(3), we state that in instances where an NCD or
an LCD exists that has sufficiently specific reasonable and necessary
criteria addressing the particular clinical indication for the
physician's service for which the prior determination is requested, the
contractor will send a copy of the LCD or NCD with an explanation that
this NCD/LCD will serve as the prior determination. Our reason for this
provision is that many NCDs and LCDs already provide the information
necessary to make an informed decision about whether or not a service
will be covered.
In Sec. 410.20(d)(4), we state that we will identify through
manual instructions the number of services that are eligible for a
prior determination consistent with the criteria established in the
regulation. Our reason for this provision is to ensure that we can
adjust the number of eligible services when we detect a need.
Sections 1869(h)(3) through (h)(6) of the Act are specific with
respect to various aspects of the prior determination process.
Therefore, in Sec. 410.20(d)(5), we specify those mandatory
provisions. The detailed procedures to be followed by our contractors
will be published in our manual instructions. Section 410.20(d)(5)(i)
generally explains the prior determination process and accompanying
documentation that may be required. Section 410.20(d)(5)(ii) describes
how contractors will respond to prior determination requests. Section
938 of the MMA provides that notice will be provided ``within the same
time period as the time period applicable to the contractor providing
notice of initial determinations on a claim for benefits under section
1869(a)(2)(A) of the Act.'' Therefore, the statute requires that
contractors must mail the requester the decision no later than 45 days
after the request is received. Contractors will be instructed to
process the requests as quickly as possible (but no longer than 45
days), taking into consideration the beneficiary's physical condition,
the urgency of treatment, and the
[[Page 9677]]
availability of the necessary documentation. Section 410.20(d)(5)(iii)
explains the binding nature of a positive determination. Section
410.20(d)(5)(iv) explains the limitation on further review.
V. Collection of Information Requirements
Under the Paperwork Reduction Act (PRA) of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether or not an information collection
should be approved by OMB, section 3506(c)(2)(A) of the PRA of 1995
requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
Section 410.20 Physicians' Services
Prior Determination of Medical Necessity for Physicians' Services
Section 410.20(d)(5) states that before a physician's service is
furnished, an eligible requester, such as a physician or beneficiary,
may request an individualized decision, a ``Prior Determination of
Medical Necessity,'' by a Medicare contractor as to whether or not the
physician's service is covered consistent with the requirements of
section 1862(a)(1)(A) of the Act relating to medical necessity. CMS may
require that the request be accompanied by a description of the
physician's service, supporting documentation relating to the medical
necessity of the physician's service, and other appropriate
documentation. In the case of a request submitted by an eligible
requestor who is described in section 1869(h)(1)(B)(ii) of the Act, the
Secretary may also require that the request be accompanied by a copy of
the advance beneficiary notice involved.
The burden associated with this requirement would be the time spent
by a requester to provide the appropriate level of documentation, as
outlined in this section, to a Medicare contractor so that the
contractor can provide a ``Prior Determination of Medical Necessity.''
We estimate 5,000 requests will be made on an annual basis, and it
will require 15 minutes per request, for an annual burden of 1,250
hours.
We received one comment in response to the proposed rule stating
that this estimate appeared to be too low. We stand by our original
estimate that 5,000 requests will be made on an annual basis and it
will require 15 minutes per request, for an annual burden of 1,250
hours.
If you comment on these information collection and record keeping
requirements, please mail copies directly to the following: Centers for
Medicare & Medicaid Services, Office of Strategic Operations and
Regulatory Affairs, Division of Regulations Development, Attn.: Melissa
Musotto, CMS-6024-F, Room C5-14-03, 7500 Security Boulevard, Baltimore,
MD 21244-1850. Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10235, New Executive Office Building,
Washington, DC 20503, Attn: Carolyn Lovett, CMS Desk Officer, CMS-6024-
F, carolyn_lovett@omb.eop.gov. Fax (202) 395-6974.
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
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 major rules with economically
significant effects ($100 million or more in any 1 year). This rule
does not reach the economic threshold and thus is not considered a
major rule. Furthermore, this rule will not result in an increase in
benefit spending.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, non-profit organizations, and government
jurisdictions. While most hospitals and most other providers and
suppliers are small entities, either by non-profit status or by having
revenues of $6.5 million to $31.5 million in any 1 year, individual
physicians and beneficiaries are not included in the definition of a
small entity. Accordingly, we are not preparing an analysis for the RFA
because we have determined that this rule will not have a significant
economic impact on a substantial number of small entities.
In addition, section 1102(b) of the 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 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 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditure in any 1 year by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $120 million. This rule will have no consequential effect on
the governments mentioned or on the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a final rule (and subsequent final
rule) that imposes substantial direct requirement costs on State and
local governments, preempts State law, or otherwise has Federalism
implications. Since this regulation will not impose any costs on State
or local governments, the requirements of E.O. 13132 are not
applicable.
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.
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For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as set forth below:
[[Page 9678]]
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
Subpart B--Medical and Other Health Services
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1. The authority citation for part 410 continues to read as follows:
Authority: Sections 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
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2. Section 410.20 is amended by adding new paragraph (d) to read as
follows:
Sec. 410.20 Physicians' services.
* * * * *
(d) Prior determination of medical necessity for physicians'
services--(1) Definitions. (i) A ``Prior Determination of Medical
Necessity'' means an individual decision by a Medicare contractor,
before a physician's service is furnished, as to whether or not the
physician's service is covered consistent with the requirements of
section 1862(a)(1)(A) of the Act relating to medical necessity.
(ii) An ``eligible requester'' includes the following:
(A) A participating physician (or a physician that accepts
assignment), but only with respect to physicians' services to be
furnished to an individual who is entitled to receive benefits under
this part and who has consented to the physician making the request
under this section for those physicians' services.
(B) An individual entitled to benefits under this part, but only
with respect to physicians' services for which the individual receives,
from a physician, an advance beneficiary notice under section 1879(a)
of the Act.
(2) General rule. Each Medicare contractor will, through the
procedures established in CMS manual instructions, allow requests for
prior determinations of medical necessity from eligible requesters
under its respective jurisdiction for those services identified by CMS
(updated annually in conjunction with the update to the MPFS and posted
on that specific Medicare contractor's Web site by the Healthcare
Common Procedure Coding System procedure code and code description).
Only those services listed on that Medicare contractor's Web site on
the date the request for a prior determination is made are subject to
prior determination. Each contractor's list will consist of the
following:
(i) The national list, provided by CMS, of the most expensive
physicians' services (as defined in section 1848(j)(3) of the Act)
included in the MPFS which are performed at least 50 times annually.
(ii) The national list, provided by CMS, of plastic and dental
surgeries that may be covered by Medicare and that have an amount of at
least $1,000 on the MPFS (not including the adjustment for location by
the GPCI).
(3) Services with local coverage determinations (LCDs) or national
coverage determinations (NCDs). In instances where an LCD or an NCD
exists that has sufficiently specific reasonable and necessary criteria
addressing the particular clinical indication for the procedure for
which the prior determination is requested, the contractor will send a
copy of the LCD or NCD to the requestor along with an explanation that
the LCD or NCD serves as the prior determination and that no further
determination will be made.
(4) Identification of eligible services. CMS will identify the
number of services that are eligible for a prior determination through
manual instructions consistent with the criteria established in the
regulation.
(5) Statutory procedures. Under sections 1869(h)(3) through (h)(6)
of the Act, the following procedures apply:
(i) Request for prior determination--(A) In general. An eligible
requester may submit to the contractor a request for a determination,
before the furnishing of a physician's service, as to whether the
physician's service is covered under this title consistent with the
applicable requirements of section 1862(a)(1)(A) of the Act (relating
to medical necessity).
(B) Accompanying documentation. CMS may require that the request be
accompanied by a description of the physician's service, supporting
documentation relating to the medical necessity of the physician's
service, and other appropriate documentation. In the case of a request
submitted by an eligible requester who is described in section
1869(h)(1)(B)(ii) of the Act, the Secretary may require that the
request also be accompanied by a copy of the advance beneficiary notice
involved.
(ii) Response to request--(A) General rule. The contractor will
provide the eligible requester with written notice of a determination
as to whether--
(1) The physician's service is covered (the physician's service is
covered consistent with the requirements of section 1862(a)(1)(A) of
the Act relating to medical necessity); or
(2) The physician's service is not covered (the physician's service
is not covered consistent with the requirements of section
1862(a)(1)(A) of the Act relating to medical necessity); or
(3) The contractor lacks sufficient information to make a coverage
determination with respect to the physician's service.
(B) Contents of notice for certain determinations--(1) Coverage. If
the contractor makes the determination described in paragraph
(d)(5)(ii)(A)(1) of this section, the contractor will indicate in the
prior determination notice that the physician service is covered
consistent with the requirements of section 1862(a)(1)(A) of the Act
relating to medical necessity.
(2) Noncoverage. If the contractor makes the determination
described in paragraph (d)(5)(ii)(A)(2) of this section, the contractor
will include in the notice a brief explanation of the basis for the
determination, including on what national or local coverage or
noncoverage determination (if any) the determination is based, and a
description of any applicable rights under section 1869(a) of the Act.
(3) Insufficient information. If the contractor makes the
determination described in paragraph (d)(5)(ii)(A)(3) of this section,
the contractor will include in the notice a description of the
additional information required to make the coverage determination.
(C) Deadline to respond. The notice described in paragraphs
(d)(5)(ii)(A)(1) through (d)(5)(ii)(A)(3) of this section will be
provided by the contractor within 45 days of the date the request for a
prior determination is received by the contractor.
(D) Informing beneficiary in case of physician request. In the case
of a request by a participating physician or a physician accepting
assignment, the process will provide that the individual to whom the
physician's service is to be furnished will be informed of any
determination described in paragraph (d)(5)(ii)(A)(2) of this section
(relating to a determination of non-coverage). The beneficiary will
also be notified that, notwithstanding the determination of non-
coverage, the beneficiary has the right to obtain the physician's
service in question and have a claim submitted for the physician's
service.
(iii) Binding nature of positive determination. If the contractor
makes the determination described in paragraph (d)(5)(ii)(A)(1) of this
section, that determination will be binding on the contractor in the
absence of fraud or evidence of misrepresentation of facts presented to
the contractor.
(iv) Limitation on further review--(A) General rule. Contractor
determinations described in paragraph (d)(5)(ii)(A)(2) of this section
or paragraph (d)(5)(ii)(A)(3) of this section (relating to pre-service
claims) are not subject to administrative appeal or judicial review.
[[Page 9679]]
(B) Decision not to seek prior determination or negative
determination does not impact the right to obtain services, seek
reimbursement, or appeal rights. Nothing in this paragraph will be
construed as affecting the right of an individual who--
(1) Decides not to seek a prior determination under this paragraph
with respect to physicians' services; or
(2) Seeks such a determination and has received a determination
described in paragraph (d)(5)(ii)(A)(2) of this section, from receiving
(and submitting a claim for) those physicians' services and from
obtaining administrative or judicial review respecting that claim under
the other applicable provisions of this part 405 subpart I of this
chapter. Failure to seek a prior determination under this paragraph
with respect to physicians' services will not be taken into account in
that administrative or judicial review.
(C) No prior determination after receipt of services. Once an
individual is provided physicians' services, there will be no prior
determination under this paragraph with respect to those physicians'
services.
Editorial Note: This document was received at the Office of the
Federal Register on February 11, 2008.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: May 31, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: October 30, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. E8-2811 Filed 2-21-08; 8:45 am]
BILLING CODE 4120-01-P