Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2009; and Revisions to the Amendment of the E-Prescribing Exemption for Computer Generated Facsimile Transmissions; Proposed Rule, 38502-38881 [E8-14949]
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38502
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DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 405, 409, 410, 411, 414,
415, 424, 485, and 486
[CMS–1403–P]
RIN 0938–AP18
Medicare Program; Revisions to
Payment Policies Under the Physician
Fee Schedule and Other Revisions to
Part B for CY 2009; and Revisions to
the Amendment of the E-Prescribing
Exemption for Computer Generated
Facsimile Transmissions; Proposed
Rule
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
sroberts on PROD1PC70 with PROPOSALS
AGENCY:
SUMMARY: This proposed rule would
address proposed changes to Medicare
Part B payment policy. We are
proposing these changes to ensure that
our payment systems are updated to
reflect changes in medical practice and
the relative value of services. This
proposed rule also discusses
refinements to resource-based practice
expense (PE) relative value units
(RVUs); geographic practice cost indices
(GPCI) changes; malpractice RVUs;
requests for additions to the list of
telehealth services; several coding
issues; payment for covered outpatient
drugs and biologicals; the competitive
acquisition program (CAP); application
of health professional shortage area
(HPSA) bonus payments; payment for
renal dialysis services; performance
standards for mobile independent
diagnostic testing facilities; and
physician and nonphysician
practitioners furnishing diagnostic
testing services; a solicitation for
comments regarding the use of the
Federal Payment Levy Program to
recover delinquent Federal tax debts; a
proposed amendment to the exemption
for computer-generated facsimile
transmissions from the National Council
for Prescription Drug Programs (NCPDP)
SCRIPT standard for transmitting
prescription and certain prescriptionrelated information for Part D covered
drugs prescribed for Part D eligible
individuals; conforming and clarifying
changes for comprehensive outpatient
rehabilitation facilities (CORFs);
revisions for rehabilitation agencies;
therapy-related technical corrections;
the physician quality reporting
initiative; physician self-referral issues
and anti-markup; beneficiary signature
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for nonemergency ambulance transport;
the chiropractic services demonstration;
educational requirements for nurse
practitioners and clinical nurse
specialists; qualifications of portable xray supplier personnel; the expiration of
provisions of the Medicare, Medicaid,
and SCHIP Extension Act of 2007;
bonus payments for long ambulance
transports; the annual update for
clinical laboratory fees under the
clinical laboratory fee schedule;
physician certification/recertification
for home health services; a prohibition
concerning providers of sleep tests;
organ retrieval; a revision to the
‘‘Appeals of CMS or CMS contractor
Determinations When a Provider or
Supplier Fails to Meet the Requirements
for Medicare Billing Privileges’’ final
rule; and, potentially misvalued services
under the physician fee schedule.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than August 29, 2008.
ADDRESSES: In commenting, please refer
to file code CMS–1403–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
You may submit comments in one of
four ways (no duplicates, please):
1. Electronically. You may submit
electronic comments on this regulation
to Follow the instructions for
‘‘Comment or Submission’’ and enter
the filecode to find the document
accepting comments.
2. By regular mail. You may mail
written comments (one original and two
copies) to the following address ONLY:
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Attention: CMS–1403–
P, P.O. Box 8013, Baltimore, MD 21244–
8013.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments (one
original and two copies) to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1403–P, Mail Stop C4–26–05,
7500 Security Boulevard, Baltimore, MD
21244–1850.
4. By hand or courier. If you prefer,
you may deliver (by hand or courier)
your written comments (one original
and two copies) before the close of the
comment period to either of the
following addresses:
a. Room 445–G, Hubert H. Humphrey
Building, 200 Independence Avenue,
SW., Washington, DC 20201.
PO 00000
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(Because access to the interior of the
HHH Building is not readily available to
persons without Federal Government
identification, commenters are
encouraged to leave their comments in
the CMS drop slots located in the main
lobby of the building. A stamp-in clock
is available for persons wishing to retain
a proof of filing by stamping in and
retaining an extra copy of the comments
being filed.)
b. 7500 Security Boulevard,
Baltimore, MD 21244–1850.
(Because access to the interior of the
HHH Building is not readily available to
persons without Federal Government
identification, commenters are
encouraged to leave their comments in
the CMS drop slots located in the main
lobby of the building. A stamp-in clock
is available for persons wishing to retain
a proof of filing by stamping in and
retaining an extra copy of the comments
being filed.)
Comments mailed to the addresses
indicated as appropriate for hand or
courier delivery may be delayed and
received after the comment period.
Submission of comments on
paperwork requirements. You may
submit comments on this document’s
paperwork requirements by mailing
your comments to the addresses
provided at the end of the ‘‘Collection
of Information Requirements’’ section in
this document.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Pam West, (410) 786–2302, for issues
related to practice expense.
Rick Ensor, (410) 786–5617, for issues
related to practice expense
methodology.
Stephanie Monroe, (410) 786–6864,
for issues related to malpractice RVUs.
Esther Markowitz, (410) 786–4595, for
issues related to telehealth services.
Craig Dobyski, (410) 786–4584, for
issues related to geographic practice
cost indices.
Ken Marsalek, (410) 786–4502, for
issues related to the multiple procedure
payment reduction for diagnostic
imaging.
Catherine Jansto, (410) 786–7762, or
Cheryl Gilbreath, (410) 786–5919, for
issues related to payment for covered
outpatient drugs and biologicals.
Edmund Kasaitis, (410) 786–0477, or
Bonny Dahm (410) 786–4006, for issues
related to the Competitive Acquisition
Program (CAP) for Part B drugs.
Corrine Axelrod, (410) 786–5620, for
issues related to Health Professional
Shortage Area Bonus Payments.
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Henry Richter, (410) 786–4562, for
issues related to payments for end-stage
renal disease facilities.
August Nemec, (410) 786–0612, for
issues related to independent diagnostic
testing facilities and enrollment issues;
and the revision to the ‘‘Appeals of CMS
or CMS contractor Determinations
When a Provider or Supplier Fails to
Meet the Requirements for Medicare
Billing Privileges’’ final rule.
Lisa Ohrin, (410) 786–4565, for issues
related to incentive payment and shared
saving programs.
Don Romano, (410) 786–1401, for
issues related to anti-markup
provisions.
Diane Stern, (410) 786–1133, for
issues related to the quality reporting
system for physician payment for CY
2009.
Andrew Morgan, (410) 786–2543, for
issues related to the e-prescribing
exemption for computer generated fax
transmissions.
Terri Harris, (410) 786–6830, for
issues related to payment for
comprehensive outpatient rehabilitation
facilities (CORFs).
Lauren Oviatt, (410) 786–4683, for
issues related to CORF conditions of
coverage.
Trisha Brooks, (410) 786–4561, for
issues related to personnel standards for
portable x-ray suppliers.
David Walczak, (410) 786–4475, for
issues related to beneficiary signature
for non-emergency ambulance transport
services.
Jean Stiller, (410) 786–0708, for issues
related to the prohibition concerning
providers of sleep tests
Mark Horney, (410) 786–4554, for
issues related to the solicitation for
comments and data pertaining to
physician organ retrieval services.
Diane Milstead, (410) 786–3355, or
Gaysha Brooks, (410) 786–9649, for all
other issues.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome
comments from the public on all issues
set forth in this rule to assist us in fully
considering issues and developing
policies. You can assist us by
referencing the file code [CMS–1403–P]
and the specific ‘‘issue identifier’’ that
precedes the section on which you
choose to comment.
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following Web
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site as soon as possible after they have
been received: https://
www.regulations.gov. Follow the search
instructions on that Web site to view
public comments.
Comments received timely will also
be available for public inspection as
they are received, generally beginning
approximately 3 weeks after publication
of a document, at the headquarters of
the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an
appointment to view public comments,
phone 1–800–743–3951.
Table of Contents
To assist readers in referencing
sections contained in this preamble, we
are providing a table of contents. Some
of the issues discussed in this preamble
affect the payment policies, but do not
require changes to the regulations in the
Code of Federal Regulations (CFR).
Information on the regulation’s impact
appears throughout the preamble, and
therefore, is not exclusively in section
VI. of this proposed rule.
I. Background
A. Development of the Relative Value
System
1. Work RVUs
2. Practice Expense Relative Value Units
(PE RVUs)
3. Resource-Based Malpractice RVUs
4. Refinements to the RVUs
5. Adjustments to RVUs are Budget Neutral
B. Components of the Fee Schedule
Payment Amounts
C. Most Recent Changes to the Fee
Schedule
II. Provisions of the Proposed Regulation
A. Resource-Based Practice Expense (PE)
Relative Value Units (RVUs)
1. Current Methodology
2. PE Proposals for CY 2009
B. Geographic Practice Cost Indices
(GPCIs): Locality Discussion
C. Malpractice RVUs (TC/PC issue)
D. Medicare Telehealth Services
E. Specific Coding Issues related to
Physician Fee Schedule
F. Part B Drug Payment
1. Average Sales Price (ASP) Issues
2. Competitive Acquisition Program (CAP)
Issues
G. Application of the HPSA Bonus
Payment
H. Provisions Related to Payment for Renal
Dialysis Services Furnished by EndStage Renal Disease (ESRD) Facilities
I. Independent Diagnostic Testing Facility
(IDTF) Issues
J. Physician and Nonphysician Practitioner
(NPP) Enrollment Issues
K. Proposed Amendment to the Exemption
for Computer-Generated Facsimile
Transmission from the National Council
for Prescription Drug Programs (NCPDP)
SCRIPT Standard for Transmitting
Prescription and Certain Prescription-
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Related Information for Part D Eligible
Individuals
L. Comprehensive Outpatient
Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
M. Technical Corrections for TherapyRelated Issues
N. Physician Self-Referral and AntiMarkup Issues
O. Physician Quality Reporting Initiative
P. Discussion of Chiropractic Services
Demonstration
Q. Educational Requirements for Nurse
Practitioners and Clinical Nurse
Specialists
R. Portable X-Ray Issue
S. Expiring Provisions and Related
Discussions
T. Other Issues
1. Physician Certification (G0180) and
Recertification (G0179) for MedicareCovered Home Health Services under a
Home Health Plan of Care (POC) in the
Home Health Prospective Payment
System (HH PPS)
2. Prohibition Concerning Providers of
Sleep Tests
3. Beneficiary Signature for Nonemergency
Ambulance Transport Services
4. Solicitation of Comments and Data
Pertaining to Physician Organ Retrieval
Services
5. Revision to the ‘‘Appeals of CMS or CMS
contractor Determinations When a
Provider or Supplier Fails to Meet the
Requirements for Medicare Billing
Privileges’’ Final Rule
III. Potentially Misvalued Services under
Physician Fee Schedule
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
Regulation Text
Addendum A—Explanation and Use of
Addendum B
Addendum B—2009 Relative Value Units
and Related Information Used in
Determining Medicare Payments for
2008
Addendum C—[Reserved for Final Rule]
Addendum D—Proposed 2009 Geographic
Adjustment Factors (GAFs)
Addendum E—Proposed 2009* Geographic
Practice Cost Indices (GPCIs) by State
and Medicare Locality
Addendum F—Multiple Procedure
Reduction Code List
Addendum G—FY 2009 Wage Index for
Urban Areas Based On CBSA Labor
Market Areas (ESRD)
Addendum H—FY 2009 Wage Index based
on CBSA Labor Market Areas for Rural
Areas (ESRD)
Acronyms
In addition, because of the many
organizations and terms to which we refer by
acronym in this final rule with comment
period, we are listing these acronyms and
their corresponding terms in alphabetical
order below:
ACC American College of Cardiology
ACR American College of Radiology
AFROC Association of Freestanding
Radiation Oncology Centers
AHA American Heart Association
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AHRQ [HHS’] Agency for Healthcare
Research and Quality
AIDS Acquired immune deficiency
syndrome
AMA American Medical Association
AMP Average manufacturer price
AOA American Osteopathic Association
ASC Ambulatory surgical center
ASP Average sales price
ASRT American Society of Radiologic
Technologists
ASTRO American Society for Therapeutic
Radiology and Oncology
ATA American Telemedicine Association
AWP Average wholesale price
BBA Balanced Budget Act of 1997 (Pub. L.
105–33)
BBRA [Medicare, Medicaid and State Child
Health Insurance Program] Balanced
Budget Refinement Act of 1999 (Pub. L.
106–113)
BIPA Medicare, Medicaid, and SCHIP
Benefits Improvement Protection Act of
2000 (Pub. L. 106–554)
BLS Bureau of Labor Statistics
BN Budget neutrality
CABG Coronary artery bypass graft
CAD Coronary artery disease
CAH Critical access hospital
CAHEA Committee on Allied Health
Education and Accreditation
CAP Competitive acquisition program
CBSA Core-Based Statistical Area
CCHIT Certification Commission for
Healthcare Information Technology
CEAMA Council on Education of the
American Medical Association
CF Conversion factor
CfC Conditions for Coverage
CFR Code of Federal Regulations
CKD Chronic kidney disease
CLFS Clinical laboratory fee schedule
CMA California Medical Association
CMP Civil money penalty
CMS Centers for Medicare & Medicaid
Services
CNS Clinical nurse specialist
CoP Condition of participation
CORF Comprehensive Outpatient
Rehabilitation Facility
CPAP Continuous positive air pressure
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPI–U Consumer price index for urban
customers
CPT [Physicians’] Current Procedural
Terminology (4th Edition, 2002,
copyrighted by the American Medical
Association)
CRT Certified respiratory therapist
CY Calendar year
DHS Designated health services
DME Durable medical equipment
DMEPOS Durable medical equipment,
prosthetics, orthotics, and supplies
DNP Doctor of Nursing Practice
DRA Deficit Reduction Act of 2005 (Pub. L.
109–171)
DSMT Diabetes self-management training
E/M Evaluation and management
EDI Electronic data interchange
EEG Electroencephalogram
EHR Electronic health record
EKG Electrocardiogram
EMG Electromyogram
EOG Electro-oculogram
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EPO Erythopoeitin
ESRD End-stage renal disease
FAX Facsimile
FDA Food and Drug Administration (HHS)
FFS Fee-for-service
FMS [Department of the Treasury’s]
Financial Management Service
FPLP Federal Payment Levy Program
FR Federal Register
GAF Geographic adjustment factor
GAO General Accounting Office
GPO Group purchasing organization
GPCI Geographic practice cost index
HAC Hospital-acquired conditions
HCPAC Health Care Professional Advisory
Committee
HCPCS Healthcare Common Procedure
Coding System
HCRIS Healthcare Cost Report Information
System
HH PPS Home Health Prospective Payment
System
HHA Home health agency
HHRG Home health resource group
HHS [Department of] Health and Human
Services
HIPAA Health Insurance Portability and
Accountability Act of 1996 (Pub. L. 104–
191)
HIT Health information technology
HITSP Healthcare Information Technology
Standards Panel
HIV Human immunodeficiency virus
HPSA Health Professional Shortage Area
HRSA Health Resources Services
Administration (HHS)
ICF Intermediate care facilities
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IFC Interim final rule with comment period
IPPS Inpatient prospective payment system
IRS Internal Revenue Service
IVIG Intravenous immune globulin
IWPUT Intra-service work per unit of time
JRCERT Joint Review Committee on
Education in Radiologic Technology
MA Medicare Advantage
MA–PD Medicare Advantage-Prescription
Drug Plans
MedCAC Medicare Evidence Development
and Coverage Advisory Committee
(formerly the Medicare Coverage Advisory
Committee (MCAC))
MedPAC Medicare Payment Advisory
Commission
MEI Medicare Economic Index
MIEA–TRHCA Medicare Improvements and
Extension Act of 2006 (that is, Division B
of the Tax Relief and Health Care Act of
2006 (TRHCA) (Pub. L. 109–432)
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (Pub. L. 108–173)
MMSEA Medicare, Medicaid, and SCHIP
Extension Act of 2007 (Pub. L. 110–173)
MNT Medical nutrition therapy
MP Malpractice
MPPR Multiple procedure payment
reduction
MQSA Mammography Quality Standards
Act of 1992 (Pub. L. 102–539)
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MS-DRG Medicare Severity-Diagnosis
related group
MSA Metropolitan statistical area
PO 00000
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NCD National Coverage Determination
NCPDP National Council for Prescription
Drug Programs
NDC National drug code
NISTA National Institute of Standards and
Technology Act
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQF National Quality Forum
NTTAA National Technology Transfer and
Advancement Act of 1995 (Pub. L. 104–
113)
OACT [CMS’] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
OIG Office of Inspector General
OMB Office of Management and Budget
ONC [HHS’] Office of the National
Coordinator for Health Information
Technology
OPPS Outpatient prospective payment
system
OSA Obstructive Sleep Apnea
OSCAR Online Survey and Certification
and Reporting
P4P Pay for performance
PA Physician assistant
PC Professional component
PCF Patient compensation fund
PDP Prescription drug plan
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory
Committee
PECOS Provider Enrollment, Chain, and
Ownership System
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POC Plan of care
PPI Producer price index
PPS Prospective payment system
PQRI Physician Quality Reporting Initiative
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PSG Polysomnography
PT Physical therapy
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RN Registered nurse
RNAC Reasonable net acquisition cost
RRT Registered respiratory therapist
RUC [AMA’s Specialty Society] Relative
(Value) Update Committee
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SLP Speech-language pathology
SMS [AMA’s] Socioeconomic Monitoring
System
SNF Skilled nursing facility
SOR System of record
TC Technical Component
TIN Tax identification number
TRHCA Tax Relief and Health Care Act of
2006 (Pub. L. 109–432)
UPMC University of Pittsburgh Medical
Center
USDE United States Department of
Education
VBP Value-based purchasing
WAMP Widely available market price
I. Background
[If you choose to comment on issues
in this section, please include the
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caption ‘‘BACKGROUND’’ at the
beginning of your comments.]
Since January 1, 1992, Medicare has
paid for physicians’ services under
section 1848 of the Social Security Act
(the Act), ‘‘Payment for Physicians’
Services.’’ The Act requires that
payments under the physician fee
schedule (PFS) be based on national
uniform relative value units (RVUs)
based on the relative resources used in
furnishing a service. Section 1848(c) of
the Act requires that national RVUs be
established for physician work, practice
expense (PE), and malpractice expense.
Before the establishment of the
resource-based relative value system,
Medicare payment for physicians’
services was based on reasonable
charges.
A. Development of the Relative Value
System
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1. Work RVUs
The concepts and methodology
underlying the PFS were enacted as part
of the Omnibus Budget Reconciliation
Act (OBRA) of 1989 (Pub. L. 101–239),
and OBRA 1990, (Pub. L. 101–508). The
final rule, published on November 25,
1991 (56 FR 59502), set forth the fee
schedule for payment for physicians’
services beginning January 1, 1992.
Initially, only the physician work RVUs
were resource-based, and the PE and
malpractice RVUs were based on
average allowable charges.
The physician work RVUs established
for the implementation of the fee
schedule in January 1992 were
developed with extensive input from
the physician community. A research
team at the Harvard School of Public
Health developed the original physician
work RVUs for most codes in a
cooperative agreement with the
Department of Health and Human
Services (DHHS). In constructing the
code-specific vignettes for the original
physician work RVUs, Harvard worked
with panels of experts, both inside and
outside the Federal government, and
obtained input from numerous
physician specialty groups.
Section 1848(b)(2)(B) of the Act
specifies that the RVUs for anesthesia
services are based on RVUs from a
uniform relative value guide. We
established a separate conversion factor
(CF) for anesthesia services, and we
continue to utilize time units as a factor
in determining payment for these
services. As a result, there is a separate
payment methodology for anesthesia
services.
We establish physician work RVUs for
new and revised codes based on
recommendations received from the
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American Medical Association’s (AMA)
Specialty Society Relative Value Update
Committee (RUC).
2. Practice Expense Relative Value Units
(PE RVUs)
Section 121 of the Social Security Act
Amendments of 1994 (Pub. L. 103–432),
enacted on October 31, 1994, amended
section 1848(c)(2)(C)(ii) of the Act and
required us to develop resource-based
PE RVUs for each physician’s service
beginning in 1998. We were to consider
general categories of expenses (such as
office rent and wages of personnel, but
excluding malpractice expenses)
comprising PEs.
Section 4505(a) of the Balanced
Budget Act of 1997 (BBA) (Pub. L. 105–
33), amended section 1848(c)(2)(C)(ii) of
the Act to delay implementation of the
resource-based PE RVU system until
January 1, 1999. In addition, section
4505(b) of the BBA provided for a 4-year
transition period from charge-based PE
RVUs to resource-based RVUs.
We established the resource-based PE
RVUs for each physician’s service in a
final rule, published November 2, 1998
(63 FR 58814), effective for services
furnished in 1999. Based on the
requirement to transition to a resourcebased system for PE over a 4-year
period, resource-based PE RVUs did not
become fully effective until 2002.
This resource-based system was based
on two significant sources of actual PE
data: The Clinical Practice Expert Panel
(CPEP) data; and the AMA’s
Socioeconomic Monitoring System
(SMS) data. The CPEP data were
collected from panels of physicians,
practice administrators, and
nonphysicians (for example, registered
nurses (RNs)) nominated by physician
specialty societies and other groups.
The CPEP panels identified the direct
inputs required for each physician’s
service in both the office setting and
out-of-office setting. We have since
refined and revised these inputs based
on recommendations from the RUC. The
AMA’s SMS data provided aggregate
specialty-specific information on hours
worked and PEs.
Separate PE RVUs are established for
procedures that can be performed in
both a nonfacility setting, such as a
physician’s office, and a facility setting,
such as a hospital outpatient
department. The difference between the
facility and nonfacility RVUs reflects
the fact that a facility typically receives
separate payment from Medicare for its
costs of providing the service, apart
from payment under the PFS. The
nonfacility RVUs reflect all of the direct
and indirect PEs of providing a
particular service.
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38505
Section 212 of the Balanced Budget
Refinement Act of 1999 (BBRA) (Pub. L.
106–113) directed the Secretary of
Health and Human Services (the
Secretary) to establish a process under
which we accept and use, to the
maximum extent practicable and
consistent with sound data practices,
data collected or developed by entities
and organizations to supplement the
data we normally collect in determining
the PE component. On May 3, 2000, we
published the interim final rule (65 FR
25664) that set forth the criteria for the
submission of these supplemental PE
survey data. The criteria were modified
in response to comments received, and
published in the Federal Register (65
FR 65376) as part of a November 1, 2000
final rule. The PFS final rules published
in 2001 and 2003, respectively, (66 FR
55246 and 68 FR 63196) extended the
period during which we would accept
these supplemental data through March
1, 2005.
In CY 2007 PFS final rule with
comment period (71 FR 69624), we
revised the methodology for calculating
PE RVUs beginning in CY 2007 and
provided for a 4-year transition for the
new PE RVUs under this new
methodology. We will continue to
evaluate this policy and proposed
necessary revisions through future
rulemaking.
3. Resource-Based Malpractice (MP)
RVUs
Section 4505(f) of the BBA amended
section 1848(c) of the Act requiring us
to implement resource-based
malpractice (MP) RVUs for services
furnished on or after 2000. The
resource-based MP RVUs were
implemented in the PFS final rule
published November 2, 1999 (64 FR
59380). The MP RVUs were based on
malpractice insurance premium data
collected from commercial and
physician-owned insurers from all the
States, the District of Columbia, and
Puerto Rico.
4. Refinements to the RVUs
Section 1848(c)(2)(B)(i) of the Act
requires that we review all RVUs no less
often than every 5 years. The first 5–
Year Review of the physician work
RVUs was published on November 22,
1996 (61 FR 59489) and was effective in
1997. The second 5–Year Review was
published in the CY 2002 PFS final rule
with comment period (66 FR 55246) and
was effective in 2002. The third 5–Year
Review of physician work RVUs was
published in the CY 2007 PFS final rule
with comment period (71 FR 69624) and
was effective on January 1, 2007. (Note:
Additional codes relating to the third 5–
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Year Review of physician work RVUs
were addressed in the CY 2008 PFS
final rule with comment period (72 FR
66360).)
In 1999, the AMA’s RUC established
the Practice Expense Advisory
Committee (PEAC) for the purpose of
refining the direct PE inputs. Through
March 2004, the PEAC provided
recommendations to CMS for over 7,600
codes (all but a few hundred of the
codes currently listed in the AMA’s
Current Procedural Terminology (CPT)
codes). As part of the CY 2007 PFS final
rule with comment period (71 FR
69624), we implemented a new
methodology for determining resourcebased PE RVUs and are transitioning
this over a 4-year period.
In the CY 2005 PFS final rule with
comment period (69 FR 66236), we
implemented the first 5–Year Review of
the MP RVUs (69 FR 66263).
5. Adjustments to RVUs are Budget
Neutral
Section 1848(c)(2)(B)(ii)(II) of the Act
provides that adjustments in RVUs for a
year may not cause total PFS payments
to differ by more than $20 million from
what they would have been if the
adjustments were not made. In
accordance with section
1848(c)(2)(B)(ii)(II) of the Act, if
adjustments to RVUs cause
expenditures to change by more than
$20 million, we make adjustments to
ensure that expenditures do not increase
or decrease by more than $20 million.
As explained in the CY 2007 PFS final
rule with comment period (71 FR
69624), due to the increase in work
RVUs resulting from the third 5–Year
Review of physician work RVUs, we
applied a separate budget neutrality
(BN) adjustor to the work RVUs for
services furnished during 2007. This
approach is consistent with the method
we use to make BN adjustments to the
PE RVUs to reflect the changes in these
PE RVUs.
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B. Components of the Fee Schedule
Payment Amounts
To calculate the payment for every
physician’s service, the components of
the fee schedule (physician work, PE,
and MP RVUs) are adjusted by a
geographic practice cost index (GPCI).
The GPCIs reflect the relative costs of
physician work, PE, and malpractice
insurance in an area compared to the
national average costs for each
component.
RVUs are converted to dollar amounts
through the application of a CF, which
is calculated by CMS’ Office of the
Actuary (OACT).
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The formula for calculating the
Medicare fee schedule payment amount
for a given service and fee schedule area
can be expressed as:
Payment = [(RVU work × budget
neutrality adjustor (round product
to two decimal places) × GPCI
work) + (RVU PE x GPCI PE) +
(RVU malpractice × GPCI
malpractice)] × CF.
C. Most Recent Changes to the Fee
Schedule
The CY 2008 PFS final rule with
comment period (72 FR 66222)
addressed certain provisions of Division
B of the Tax Relief and Health Care Act
of 2006—Medicare Improvements and
Extension Act of 2006 (Pub. L. 109–432)
(MIEA–TRHCA), and made other
changes to Medicare Part B payment
policy to ensure that our payment
systems are updated to reflect changes
in medical practice and the relative
value of services. The CY 2008 PFS final
rule with comment period also
discussed refinements to resource-based
PE RVUs; GPCI changes; malpractice
RVUs; requests for additions to the list
of telehealth services; several coding
issues including additional codes from
the 5-Year Review; payment for covered
outpatient drugs and biologicals; the
competitive acquisition program (CAP);
clinical lab fee schedule issues;
payment for end-stage renal dialysis
(ESRD) services; performance standards
facilities; expiration of the physician
scarcity area (PSA) bonus payment;
conforming and clarifying changes for
comprehensive outpatient rehabilitation
facilities (CORFs); a process for
updating the drug compendia; physician
self-referral issues; beneficiary signature
for ambulance transport services;
durable medical equipment (DME)
update; the chiropractic services
demonstration; a Medicare economic
index (MEI) data change; technical
corrections; standards and requirement
related to therapy services under
Medicare Parts A and B; revisions to the
ambulance fee schedule; the ambulance
inflation factor for CY 2008; and an
amendment to the e-prescribing
exemption for computer-generated
facsimile transmissions
We also finalized the calendar year
(CY) 2007 interim RVUs and issued
interim RVUs for new and revised
procedure codes for CY 2008.
In accordance with section
1848(d)(1)(E)(i) of the Act, we also
announced that the PFS update for CY
2008 is ¥10.1 percent, the initial
estimate for the sustainable growth rate
(SGR) for CY 2008 is 2.2 percent and the
CF for CY 2008 is $34.0682. However,
subsequent to publication of the CY
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2008 PFS final rule with comment
period, section 101(a) of the Medicare,
Medicaid, and SCHIP Extension Act of
2007 (Pub. L. 110–173) (MMSEA) was
enacted on December 29, 2007 and
provided for a 0.5 percent update to the
conversion factor for the period
beginning January 1, 2008 and ending
June 30, 2008. Therefore, for the first
half of 2008 (that is, January through
June), the Medicare PFS conversion
factor was $38.0870. For the remaining
portion of 2008 (July through
December), the Medicare PFS
conversion factor will be $34.0682 (as
published in the 2008 PFS final rule
with comment period).
II. Provisions of the Proposed
Regulation
A. Resource-Based Practice Expense
(PE) Relative Value Units (RVUs)
[If you choose to comment on issues
in this section, please include the
caption ‘‘RESOURCE-BASED PE RVUs’’
at the beginning of your comments.]
Practice expense (PE) is the portion of
the resources used in furnishing the
service that reflects the general
categories of physician and practitioner
expenses, such as office rent and
personnel wages but excluding
malpractice expenses, as specified in
section 1848(c)(1)(B) of the Act.
Section 121 of the Social Security
Amendments of 1994 (Pub. L. 103–432),
enacted on October 31, 1994, required
CMS to develop a methodology for a
resource-based system for determining
PE RVUs for each physician’s service.
Until that time, PE RVUs were based on
historical allowed charges. This
legislation stated that the revised PE
methodology must consider the staff,
equipment, and supplies used in the
provision of various medical and
surgical services in various settings
beginning in 1998. The Secretary has
interpreted this to mean that Medicare
payments for each service would be
based on the relative PE resources
typically involved with furnishing the
service.
The initial implementation of
resource-based PE RVUs was delayed
from January 1, 1998, until January 1,
1999, by section 4505(a) of the BBA. In
addition, section 4505(b) of the BBA
required that the new payment
methodology be phased in over 4 years,
effective for services furnished in CY
1999, and fully effective in CY 2002.
The first step toward implementation of
the statute was to adjust the PE values
for certain services for CY 1998. Section
4505(d) of the BBA required that, in
developing the resource-based PE RVUs,
the Secretary must—
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• Use, to the maximum extent
possible, generally-accepted cost
accounting principles that recognize all
staff, equipment, supplies, and
expenses, not solely those that can be
linked to specific procedures and actual
data on equipment utilization.
• Develop a refinement method to be
used during the transition.
• Consider, in the course of notice
and comment rulemaking, impact
projections that compare new proposed
payment amounts to data on actual
physician PE.
In CY 1999, we began the 4-year
transition to resource-based PE RVUs
utilizing a ‘‘top-down’’ methodology
whereby we allocated aggregate
specialty-specific practice costs to
individual procedures. The specialtyspecific PEs were derived from the
American Medical Association’s
(AMA’s) Socioeconomic Monitoring
Survey (SMS). In addition, under
section 212 of the BBRA, we established
a process extending through March 2005
to supplement the SMS data with data
submitted by a specialty. The aggregate
PEs for a given specialty were then
allocated to the services furnished by
that specialty on the basis of the direct
input data (that is, the staff time,
equipment, and supplies) and work
RVUs assigned to each CPT code.
For CY 2007, we implemented a new
methodology for calculating PE RVUs.
Under this new methodology, we use
the same data sources for calculating PE,
but instead of using the ‘‘top-down’’
approach to calculate the direct PE
RVUs, under which the aggregate direct
and indirect costs for each specialty are
allocated to each individual service, we
now utilize a ‘‘bottom-up’’ approach to
calculate the direct costs. Under the
‘‘bottom up’’ approach, we determine
the direct PE by adding the costs of the
resources (that is, the clinical staff,
equipment, and supplies) typically
required to provide each service. The
costs of the resources are calculated
using the refined direct PE inputs
assigned to each CPT code in our PE
database, which are based on our review
of recommendations received from the
AMA’s Relative Value Update
Committee (RUC). For a more detailed
explanation of the PE methodology see
the June 29, 2006 proposed notice (71
FR 37242) and the CY 2007 PFS final
rule with comment period (71 FR
69629).
1. Current Methodology
a. Data Sources for Calculating Practice
Expense
The AMA’s SMS survey data and
supplemental survey data from the
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specialties of cardiothoracic surgery,
vascular surgery, physical and
occupational therapy, independent
laboratories, allergy/immunology,
cardiology, dermatology,
gastroenterology, radiology,
independent diagnostic testing facilities
(IDTFs), radiation oncology, and urology
are used to develop the PE per hour (PE/
HR) for each specialty. For those
specialties for which we do not have
PE/HR, the appropriate PE/HR is
obtained from a crosswalk to a similar
specialty.
The AMA developed the SMS survey
in 1981 and discontinued it in 1999.
Beginning in 2002, we incorporated the
1999 SMS survey data into our
calculation of the PE RVUs, using a 5year average of SMS survey data. (See
the CY 2002 PFS final rule with
comment period (66 FR 55246).) The
SMS PE survey data are adjusted to a
common year, 2005. The SMS data
provide the following six categories of
PE costs:
• Clinical payroll expenses, which
are payroll expenses (including fringe
benefits) for nonphysician clinical
personnel.
• Administrative payroll expenses,
which are payroll expenses (including
fringe benefits) for nonphysician
personnel involved in administrative,
secretarial, or clerical activities.
• Office expenses, which include
expenses for rent, mortgage interest,
depreciation on medical buildings,
utilities, and telephones.
• Medical material and supply
expenses, which include expenses for
drugs, x-ray films, and disposable
medical products.
• Medical equipment expenses,
which include depreciation, leases, and
rent of medical equipment used in the
diagnosis or treatment of patients.
• All other expenses, which include
expenses for legal services, accounting,
office management, professional
association memberships, and any
professional expenses not previously
mentioned in this section.
In accordance with section 212 of the
BBRA, we established a process to
supplement the SMS data for a specialty
with data collected by entities and
organizations other than the AMA (that
is, those entities and organizations
representing the specialty itself). (See
the Criteria for Submitting
Supplemental Practice Expense Survey
Data interim final rule with comment
period (65 FR 25664).) Originally, the
deadline to submit supplementary
survey data was through August 1, 2001.
In the CY 2002 PFS final rule (66 FR
55246), the deadline was extended
through August 1, 2003. To ensure
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maximum opportunity for specialties to
submit supplementary survey data, we
extended the deadline to submit surveys
until March 1, 2005 in the Revisions to
Payment Policies Under the Physician
Fee Schedule for CY 2004 final rule
with comment period (68 FR 63196)
(hereinafter referred to as CY 2004 PFS
final rule with comment period).
The direct cost data for individual
services were originally developed by
the Clinical Practice Expert Panels
(CPEP). The CPEP data include the
supplies, equipment, and staff times
specific to each procedure. The CPEPs
consisted of panels of physicians,
practice administrators, and
nonphysicians (for example, RNs) who
were nominated by physician specialty
societies and other groups. There were
15 CPEPs consisting of 180 members
from more than 61 specialties and
subspecialties. Approximately 50
percent of the panelists were
physicians.
The CPEPs identified specific inputs
involved in each physician’s service
provided in an office or facility setting.
The inputs identified were the quantity
and type of nonphysician labor, medical
supplies, and medical equipment.
In 1999, the AMA’s RUC established
the Practice Expense Advisory
Committee (PEAC). From 1999 to March
2004, the PEAC, a multi-specialty
committee, reviewed the original CPEP
inputs and provided us with
recommendations for refining these
direct PE inputs for existing CPT codes.
Through its last meeting in March 2004,
the PEAC provided recommendations
for over 7,600 codes which we have
reviewed and almost all of which we
have accepted. As a result, the current
PE inputs differ markedly from those
originally recommended by the CPEPs.
The PEAC has now been replaced by the
Practice Expense Review Committee
(PERC), which acts to assist the RUC in
recommending PE inputs.
b. Allocation of PE to Services
The aggregate level specialty-specific
PEs are derived from the AMA’s SMS
survey and supplementary survey data.
To establish PE RVUs for specific
services, it is necessary to establish the
direct and indirect PE associated with
each service.
(i) Direct costs. The direct costs are
determined by adding the costs of the
resources (that is, the clinical staff,
equipment, and supplies) typically
required to provide the service. The
costs of these resources are calculated
from the refined direct PE inputs in our
PE database. These direct inputs are
then scaled to the current aggregate pool
of direct PE RVUs. The aggregate pool
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of direct PE RVUs can be derived using
the following formula:
(PE RVUs × physician CF) × (average
direct percentage from SMS /
(Supplemental PE/HR data)).
(ii) Indirect costs. The SMS and
supplementary survey data are the
source for the specialty-specific
aggregate indirect costs used in our PE
calculations. Then, we allocate the
indirect costs to the code level on the
basis of the direct costs specifically
associated with a code and the
maximum of either the clinical labor
costs or the physician work RVUs. For
calculation of the 2009 PE RVUs, we are
proposing to use the 2007 procedurespecific utilization data crosswalked to
2008 services. To arrive at the indirect
PE costs—
• We apply a specialty-specific
indirect percentage factor to the direct
expenses to recognize the varying
proportion that indirect costs represent
of total costs by specialty. For a given
service, the specific indirect percentage
factor to apply to the direct costs for the
purpose of the indirect allocation is
calculated as the weighted average of
the ratio of the indirect to direct costs
(based on the survey data) for the
specialties that furnish the service. For
example, if a service is furnished by a
single specialty with indirect PEs that
were 75 percent of total PEs, the indirect
percentage factor to apply to the direct
costs for the purposes of the indirect
allocation would be (0.75 / 0.25) = 3.0.
The indirect percentage factor is then
applied to the service level adjusted
indirect PE allocators.
• We use the specialty-specific PE/HR
from the SMS survey data, as well as the
supplemental surveys for cardiothoracic
surgery, vascular surgery, physical and
occupational therapy, independent
laboratories, allergy/immunology,
cardiology, dermatology, radiology,
gastroenterology, IDTFs, radiation
oncology, and urology. (Note: For
radiation oncology, the data represent
the combined survey data from the
American Society for Therapeutic
Radiology and Oncology (ASTRO) and
the Association of Freestanding
Radiation Oncology Centers (AFROC)).
As discussed in the CY 2008 PFS final
rule with comment period (72 FR
66233), the PE/HR survey data for
radiology is weighted by practice size.
We incorporate this PE/HR into the
calculation of indirect costs using an
index which reflects the relationship
between each specialty’s indirect
scaling factor and the overall indirect
scaling factor for the entire PFS. For
example, if a specialty had an indirect
practice cost index of 2.00, this
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specialty would have an indirect scaling
factor that was twice the overall average
indirect scaling factor. If a specialty had
an indirect practice cost index of 0.50,
this specialty would have an indirect
scaling factor that was half the overall
average indirect scaling factor.
• When the clinical labor portion of
the direct PE RVU is greater than the
physician work RVU for a particular
service, the indirect costs are allocated
based upon the direct costs and the
clinical labor costs. For example, if a
service has no physician work and 1.10
direct PE RVUs, and the clinical labor
portion of the direct PE RVUs is 0.65
RVUs, we would use the 1.10 direct PE
RVUs and the 0.65 clinical labor
portions of the direct PE RVUs to
allocate the indirect PE for that service.
c. Facility/Nonfacility Costs
Procedures that can be furnished in a
physician’s office, as well as in a
hospital or facility setting, have two PE
RVUs: Facility and nonfacility. The
nonfacility setting includes physicians’
offices, patients’ homes, freestanding
imaging centers, and independent
pathology labs. Facility settings include
hospitals, ambulatory surgical centers
(ASCs), and skilled nursing facilities
(SNFs). The methodology for calculating
PE RVUs is the same for both facility
and nonfacility RVUs, but is applied
independently to yield two separate PE
RVUs. Because the PEs for services
provided in a facility setting are
generally included in the payment to
the facility (rather than the payment to
the physician under the PFS), the PE
RVUs are generally lower for services
provided in the facility setting.
d. Services With Technical Components
(TCs) and Professional Components
(PCs)
Diagnostic services are generally
comprised of two components: A
professional component (PC) and a
technical component (TC), both of
which may be performed independently
or by different providers. When services
have TCs, PCs, and global components
that can be billed separately, the
payment for the global component
equals the sum of the payment for the
TC and PC. This is a result of using a
weighted average of the ratio of indirect
to direct costs across all the specialties
that furnish the global components, TCs,
and PCs; that is, we apply the same
weighted average indirect percentage
factor to allocate indirect expenses to
the global components, PCs, and TCs for
a service. (The direct PE RVUs for the
TC and PC sum to the global under the
bottom-up methodology.)
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e. Transition Period
As discussed in the CY 2007 PFS final
rule with comment period (71 FR
69674), we are implementing the change
in the methodology for calculating PE
RVUs over a 4-year period. During this
transition period, the PE RVUs will be
calculated on the basis of a blend of
RVUs calculated using our methodology
described previously in this section
(weighted by 25 percent during CY
2007, 50 percent during CY 2008, 75
percent during CY 2009, and 100
percent thereafter), and the CY 2006 PE
RVUs for each existing code. PE RVUs
for codes that are new during this
period will be calculated using only the
current PE methodology and will be
paid at the fully transitioned rate.
f. PE RVU Methodology
The following is a description of the
PE RVU methodology.
(i) Setup File
First, we create a setup file for the PE
methodology. The setup file contains
the direct cost inputs, the utilization for
each procedure code at the specialty
and facility/nonfacility place of service
level, and the specialty-specific survey
PE per physician hour data.
(ii) Calculate the Direct Cost PE RVUs
Sum the costs of each direct input.
Step 1: Sum the direct costs of the
inputs for each service. The direct costs
consist of the costs of the direct inputs
for clinical labor, medical supplies, and
medical equipment. The clinical labor
cost is the sum of the cost of all the staff
types associated with the service; it is
the product of the time for each staff
type and the wage rate for that staff
type. The medical supplies cost is the
sum of the supplies associated with the
service; it is the product of the quantity
of each supply and the cost of the
supply. The medical equipment cost is
the sum of the cost of the equipment
associated with the service; it is the
product of the number of minutes each
piece of equipment is used in the
service and the equipment cost per
minute. The equipment cost per minute
is calculated as described at the end of
this section.
Apply a BN adjustment to the direct
inputs.
Step 2: Calculate the current aggregate
pool of direct PE costs. To do this,
multiply the current aggregate pool of
total direct and indirect PE costs (that is,
the current aggregate PE RVUs
multiplied by the CF) by the average
direct PE percentage from the SMS and
supplementary specialty survey data.
Step 3: Calculate the aggregate pool of
direct costs. To do this, for all PFS
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services, sum the product of the direct
costs for each service from Step 1 and
the utilization data for that service.
Step 4: Using the results of Step 2 and
Step 3 calculate a direct PE BN
adjustment so that the proposed
aggregate direct cost pool does not
exceed the current aggregate direct cost
pool and apply it to the direct costs
from Step 1 for each service.
Step 5: Convert the results of Step 4
to an RVU scale for each service. To do
this, divide the results of Step 4 by the
Medicare PFS CF.
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(iii) Create the indirect PE RVUs
Create indirect allocators.
Step 6: Based on the SMS and
supplementary specialty survey data,
calculate direct and indirect PE
percentages for each physician
specialty.
Step 7: Calculate direct and indirect
PE percentages at the service level by
taking a weighted average of the results
of Step 6 for the specialties that furnish
the service. Note that for services with
TCs and PCs we are calculating the
direct and indirect percentages across
the global components, PCs, and TCs.
That is, the direct and indirect
percentages for a given service (for
example, echocardiogram) do not vary
by the PC, TC and global component.
Step 8: Calculate the service level
allocators for the indirect PEs based on
the percentages calculated in Step 7.
The indirect PEs are allocated based on
the three components: the direct PE
RVU, the clinical PE RVU, and the work
RVU.
For most services the indirect
allocator is: indirect percentage * (direct
PE RVU/direct percentage) + work RVU.
There are two situations where this
formula is modified:
• If the service is a global service (that
is, a service with global, professional,
and technical components), then the
indirect allocator is: indirect percentage
* (direct PE RVU/direct percentage) +
clinical PE RVU + work RVU.
• If the clinical labor PE RVU exceeds
the work RVU (and the service is not a
global service), then the indirect
allocator is: indirect percentage * (direct
PE RVU/direct percentage) + clinical PE
RVU.
Note: For global services, the indirect
allocator is based on both the work RVU and
the clinical labor PE RVU. We do this to
recognize that, for the professional service,
indirect PEs will be allocated using the work
RVUs, and for the TC service, indirect PEs
will be allocated using the direct PE RVU and
the clinical labor PE RVU. This also allows
the global component RVUs to equal the sum
of the PC and TC RVUs.
For presentation purposes in the
examples in Table 1, the formulas were
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divided into two parts for each service.
The first part does not vary by service
and is the indirect percentage * (direct
PE RVU/direct percentage). The second
part is either the work RVU, clinical PE
RVU, or both depending on whether the
service is a global service and whether
the clinical PE RVU exceeds the work
RVU (as described earlier in this step).
Apply a BN adjustment to the indirect
allocators.
Step 9: Calculate the current aggregate
pool of indirect PE RVUs by multiplying
the current aggregate pool of PE RVUs
by the average indirect PE percentage
from the physician specialty survey
data. This is similar to the Step 2
calculation for the direct PE RVUs.
Step 10: Calculate an aggregate pool of
proposed indirect PE RVUs for all PFS
services by adding the product of the
indirect PE allocators for a service from
Step 8 and the utilization data for that
service. This is similar to the Step 3
calculation for the direct PE RVUs.
Step 11: Using the results of Step 9
and Step 10, calculate an indirect PE
adjustment so that the aggregate indirect
allocation does not exceed the available
aggregate indirect PE RVUs and apply it
to indirect allocators calculated in Step
8. This is similar to the Step 4
calculation for the direct PE RVUs.
Calculate the Indirect Practice Cost
Index.
Step 12: Using the results of Step 11,
calculate aggregate pools of specialtyspecific adjusted indirect PE allocators
for all PFS services for a specialty by
adding the product of the adjusted
indirect PE allocator for each service
and the utilization data for that service.
Step 13: Using the specialty-specific
indirect PE/HR data, calculate specialtyspecific aggregate pools of indirect PE
for all PFS services for that specialty by
adding the product of the indirect PE/
HR for the specialty, the physician time
for the service, and the specialty’s
utilization for the service.
Step 14: Using the results of Step 12
and Step 13, calculate the specialtyspecific indirect PE scaling factors as
under the current methodology.
Step 15: Using the results of Step 14,
calculate an indirect practice cost index
at the specialty level by dividing each
specialty-specific indirect scaling factor
by the average indirect scaling factor for
the entire PFS.
Step 16: Calculate the indirect
practice cost index at the service level
to ensure the capture of all indirect
costs. Calculate a weighted average of
the practice cost index values for the
specialties that furnish the service.
(NOTE: For services with TCs and PCs,
we calculate the indirect practice cost
index across the global components,
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PCs, and TCs. Under this method, the
indirect practice cost index for a given
service (for example, echocardiogram)
does not vary by the PC, TC and global
component.)
Step 17: Apply the service level
indirect practice cost index calculated
in Step 16 to the service level adjusted
indirect allocators calculated in Step 11
to get the indirect PE RVU.
(iv) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from
Step 6 to the indirect PE RVUs from
Step 17.
Step 19: Calculate and apply the final
PE BN adjustment by comparing the
results of Step 18 to the current pool of
PE RVUs. This final BN adjustment is
required primarily because certain
specialties are excluded from the PE
RVU calculation for rate-setting
purposes, but all specialties are
included for purposes of calculating the
final BN adjustment. (See ‘‘Specialties
excluded from rate-setting calculation’’
below in this section.)
(v) Setup File Information
• Specialties excluded from ratesetting calculation: For the purposes of
calculating the PE RVUs, we exclude
certain specialties such as midlevel
practitioners paid at a percentage of the
PFS, audiology, and low volume
specialties from the calculation. These
specialties are included for the purposes
of calculating the BN adjustment.
• Crosswalk certain low volume
physician specialties: Crosswalk the
utilization of certain specialties with
relatively low PFS utilization to the
associated specialties.
• Physical therapy utilization:
Crosswalk the utilization associated
with all physical therapy services to the
specialty of physical therapy.
• Identify professional and technical
services not identified under the usual
TC and 26 modifiers: Flag the services
that are PC and TC services, but do not
use TC and 26 modifiers (for example,
electrocardiograms). This flag associates
the PC and TC with the associated
global code for use in creating the
indirect PE RVU. For example, the
professional service code 93010 is
associated with the global code 93000.
• Payment modifiers: Payment
modifiers are accounted for in the
creation of the file. For example,
services billed with the assistant at
surgery modifier are paid 16 percent of
the PFS amount for that service;
therefore, the utilization file is modified
to only account for 16 percent of any
service that contains the assistant at
surgery modifier.
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• Work RVUs: The setup file contains
the work RVUs from this proposed rule.
(vi) Equipment Cost per Minute
The equipment cost per minute is
calculated as:
sroberts on PROD1PC70 with PROPOSALS
(1/(minutes per year * usage)) * price *
((interest rate/(1 ¥ (1/((1 + interest
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rate) * life of equipment)))) +
maintenance)
Where:
minutes per year = maximum minutes per
year if usage were continuous (that is,
usage = 1); 150,000 minutes.
usage = equipment utilization assumption;
0.5.
price = price of the particular piece of
equipment.
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interest rate = 0.11.
life of equipment = useful life of the
particular piece of equipment.
maintenance = factor for maintenance; 0.05.
Note: To illustrate the PE calculation, in
Table 1 we have used the conversion factor
(CF) of $34.0682 which was published in the
CY 2008 PFS final rule with comment period.
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=(Lab*Dir Adj)/CF
=(Sup*Dir Adj)/CF
=(Eqp*Dir Adj)/CF
...............................
Step 5
Step 5
Step 5
Step 5
...............................
Step 8
=Ind Alloc * Ind Adj
Steps
18–
19.
...............................
See footnote** ......
Steps
9–11.
Steps
9–11.
Steps
12–
16.
Step 17
= Adj. Ind
Alloc*PCI.
=(Adj Dir+Adj Ind)
*budn.
See Steps 12–16 ..
...............................
...............................
Step 8
=((14)+(26)) *budn
=(24)*(25) .............
...............................
=(19)+(21) .............
See (20) ................
...............................
Step 8
...............................
See Step 8 ............
See (18) ................
...............................
...............................
Step 8
Surveys .................
...............................
Surveys .................
See Step 8 ............
...............................
=(11)+(12)+(13) ....
MFS ......................
Setup
File.
Steps
6, 7.
Steps
6, 7.
Step 8
=(8)/(10) ................
=(7)/(10) ................
=(6)/(10) ................
...............................
=(6)+(7)+(8) ..........
...............................
MFS ......................
=(2)*(5) .................
=(3)*(5) .................
=Eqp*Dir Adj .........
=(1)*(5) .................
=Lab*Dir Adj .........
=Sup*Dir Adj .........
=(1)+(2)+(3) ..........
...............................
...............................
See footnote* ........
Step 1
Steps
2–4.
Steps
2–4.
Steps
2–4.
Steps
2–4.
Steps
2–4.
Step 5
...............................
...............................
...............................
Formula
AMA ......................
AMA ......................
AMA ......................
Source
Step 1
Step 1
Step 1
Step
$0.77
$0.49
$0.973
$0.50
0.364
$1.37
$0.81
(15)
$0.56
((14)/(16))*(17)
66.2%
33.8%
$0.81
$0.29
$0.00
$0.05
$0.23
$34.0682
$9.76
$0.12
$1.77
$7.88
$16.50
0.592
$0.19
$13.32
$2.98
99213 Office visit,
est Nonfacility
$12.60
$11.11
$0.934
$11.89
0.364
$32.69
$29.62
(15)
$3.07
((14)/(16))*(17)
67.4%
32.6%
$29.62
$1.49
$0.01
$0.13
$1.35
$34.0682
$50.61
$0.39
$4.34
$45.88
$85.51
0.592
$0.65
$77.52
$7.34
33533 CABG, arterial, single Facility
$0.59
$0.28
$1.075
$0.26
0.364
$0.73
$0.29
(15)+(11)
$0.44
((14)/(16))*(17)
59.3%
40.7%
$0.19
$0.30
$0.14
$0.06
$0.10
$34.0682
$10.24
$4.84
$2.01
$3.40
$17.31
0.592
$8.17
$5.74
$3.39
71020 Chest x-ray
Nonfacility
$0.51
$0.21
$1.075
$0.19
0.364
$0.53
$0.10
(11)
$0.44
((14)/(16))*(17)
59.3%
40.7%
$—
$0.30
$0.14
$0.06
$0.10
$34.0682
$10.24
$4.84
$2.01
$3.40
$17.31
0.592
$8.17
$5.74
$3.39
71020TC Chest xray Nonfacility
$0.07
$0.07
$1.075
$0.07
0.364
$0.19
$0.19
(15)
$—
((14)/(16))*(17)
59.3%
40.7%
$0.19
$—
$—
$—
$—
$34.0682
$—
$—
$—
$—
$—
0.592
$—
$—
$—
7102026 Chest xray Nonfacility
$0.35
$0.22
$1.281
$0.17
0.364
$0.47
$0.25
(15)+(11)
$0.21
((14)/(16))*(17)
62.3%
37.7%
$0.15
$0.13
$0.00
$0.02
$0.11
$34.0682
$4.40
$0.07
$0.71
$3.62
$7.43
0.592
$0.12
$6.12
$1.19
93000 ECG, complete Nonfacility
TABLE 1.—CALCULATION OF PE RVUS UNDER METHODOLOGY FOR SELECTED CODES
* The direct adj = [current pe rvus * CF * avg dir pct] / [sum direct inputs] = [Step 2] / [Step 3].
** The indirect adj = [current pe rvus * avg ind pct] / [sum of ind allocators] = [Step 9]/[Step 10.
Note: Final PE RVU in Table 1, row 27, may not match Addendum B due to rounding.
(26) Adjusted Indirect.
(27) PE RVU ..........
(18) Ind. Alloc. formula (1st part).
(19) Ind. Alloc. (1st
part).
(20) Ind. Alloc. formulas (2nd part).
(21) Ind. Alloc. (2nd
part).
(22) Indirect Allocator (1st+2nd).
(23) Indirect Adjustment (Ind Adj).
(24) Adjusted Indirect Allocator.
(25) Ind.Practice
Cost Index (PCI).
(17) Ind_pct ............
(10) Conversion
Factor (CF).
(11) Adj. labor cost
converted.
(12) Adj. supply
cost converted.
(13) Adj. equip cost
converted.
(14) Adj. direct cost
converted.
(15) Wrk RVU* Wrk
Scaler.
(16) Dir_pct ............
(7) Adjusted supplies.
(8) Adjusted equipment.
(9) Adjusted direct
(1) Labor cost (Lab)
(2) Supply cost
(Sup).
(3) Equipment cost
(Eqp).
(4) Direct cost (Dir)
(5) Direct adjustment (Dir Adj).
(6) Adjusted labor ..
sroberts on PROD1PC70 with PROPOSALS
$0.28
$0.15
$1.281
$0.12
0.364
$0.32
$0.11
(11)
$0.21
((14)/(16))*(17)
62.3%
37.7%
$—
$0.13
$0.00
$0.02
$0.11
$34.0682
$4.40
$0.07
$0.71
$3.62
$7.43
0.592
$0.12
$6.12
$1.19
93005 ECG, tracing
Nonfacility
$0.07
$0.07
$1.281
$0.05
0.364
$0.15
$0.15
(15)
$—
((14)/(16))*(17)
62.3%
37.7%
$0.15
$—
$—
$—
$—
$34.0682
$—
$—
$—
$—
$—
0.592
$—
$—
$—
93010 ECG, report
Nonfacility
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2. PE Proposals for CY 2009
a. RUC Recommendations for Direct PE
Inputs
The RUC provided recommendations
for PE inputs for the codes listed in the
Table 2.
TABLE 2.—CODES WITH RUC PE
RECOMMENDATIONS
CPT 1
code
29805
29830
29840
29870
29900
90465
90466
90467
90468
90471
90472
90473
90474
93510
96405
96406
96440
96445
96450
96542
99174
99185
99186
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
Description
Shoulder arthroscopy, dx.
Elbow arthroscopy.
Wrist arthroscopy
Knee arthroscopy, dx.
Mcp joint arthroscopy, dx.
Immune admin 1 inj, <8 yrs.
Immune admin addl inj, <8 y.
Immune admin o/n, addl <8 yrs.
Immune admin o/n, addl <8 y.
Immunization admin.
Immunization admin, each admin
Immune admin oral/nasal
Immune admin oral/nasal addl.
Left heart catheterization.
Chemo intralesional, up to 7.
Chemo intralesional over 7.
Chemotherapy, intracavitary.
Chemotherapy, intracavitary.
Chemotherapy, into CNS.
Chemotherapy injection.
Ocular photoscreening.
Regional hypothermia.
Total body hypothermia.
1 CPT codes and descriptions are copyright
2008 American Medical Association.
sroberts on PROD1PC70 with PROPOSALS
We are in agreement with the RUC
recommendations, (including the
recommendation that no change be
made to the direct inputs for CPT 93510,
a cardiac catheterization code), except
for inclusion of the clinical staff time
related to quality activities for the
following immunization codes: CPT
codes 90465, 90466, 90467, 90468,
90471, 90472, 90473 and 90474. While
we allow this time for mammography
services due to the specific regulatory
requirements required by the
Mammography Quality Standards Act of
1992 (Pub. L. 102–539) (MQSA), such
MQSA time is not a regulatory
requirement for immunization services.
b. Equipment Time-in-Use
The formula for estimating the cost
per minute for equipment is based upon
a variety of factors, including the cost of
the equipment, useful life, interest rate,
maintenance cost, and utilization. The
purpose of this formula is to identify an
estimated cost per minute for the
equipment that can be multiplied by the
time the equipment is in use to obtain
an estimated per use equipment cost to
develop the resource-based PE RVU.
In calculating the estimated cost per
minute for services that are in use 24
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hours per day for 7 days per week, we
have assumed that the maximum
amount of time that the equipment can
be in use is approximately 525,000
minutes (that is, 525,000 minutes = (24
hours per day) × (7 days per week) × (52
weeks per year) × (60 minutes per
hour)).
For CY 2008, we used 525,000
minutes to calculate the per minute
equipment cost for the equipment used
in CPT code 93012, Telephonic
transmission of post-symptom
electrocardiogram rhythm strip(s), 24hour attended monitoring, per 30 day
period of time; tracing only and CPT
code 93271, Patient demand single or
multiple event recording with
presymptom memory loop, 24-hour
attended monitoring, per 30 day period
of time; monitoring, receipt of
transmissions, and analysis. Based on
information presented to us by a
provider group suggesting that the
equipment was in use continuously, we
determined that this equipment is used
24 hours a day, 7 days a week. Thus, we
assigned the equipment a 100 percent
usage rate. However, in subsequent
discussions with a provider group, we
determined that, although there may be
a 100 percent usage rate for a particular
month, this does not correspond to a
100 percent usage rate for a year.
Therefore, for CY 2009 we are proposing
to apply our standard utilization rate of
50 percent to the 525,000 maximum
minutes of use, consistent with our
utilization rate assumption for other
equipment. This results in 262,500
minutes (that is, 262,500 = 525,000 ×
0.50) of average use over the course of
the year.
In the CY 2008 PFS rule, we used
43,200 minutes (60 minutes per hour ×
24 hours per day × 30 days per month)
to estimate the per use cost of the
equipment in these monthly services.
We are continuing to use 43,200
minutes in determining the equipment
cost per use for these codes. The PE
RVUs would increase from 5.28 to 5.98
as a result of this change.
c. Change to PE Database Inputs for
Certain Cardiac Stress Tests
The direct PE inputs for CPT code
93025, Microvolt T-wave alternans for
assessment of ventricular arrhythmias,
for clinical labor are not consistent with
the other cardiac stress tests, CPT codes
93015, Cardiovascular stress test using
maximal or submaximal treadmill or
bicycle exercise, continuous
electrocardiographic monitoring, and/or
pharmacological stress; with physician
supervision, with interpretation and
report, and 93017, Cardiovascular stress
test using maximal or submaximal
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treadmill or bicycle exercise, continuous
electrocardiographic monitoring, and/or
pharmacological stress; tracing only,
without interpretation and report. These
codes were refined by the PEAC in
January 2002, the same year that CPT
code 93025 was implemented. Because
of this overlap in timing, the codes that
the PEAC refined utilize registered
nurses (RNs) while CPT 93025 uses a
‘‘blend’’ of RNs and physicians.
To provide consistency across the
family, we are proposing to designate
the RN as the labor type for CPT code
93025. In addition, we are proposing to
add the specific Micro-volt T-wave
testing equipment, priced at $40,000, to
replace the two different cardiac stress
testing treadmill devices that are
currently assigned to this code and
reflected in the PE database. We are also
proposing to assign the service period
time, 53 minutes, to the exam table and
the Micro-volt T-wave testing treadmill
because neither piece of equipment is
available for use by others during the
testing interval. The T-wave stress test
must be done in quiet room. Using this
rationale for the other two stress testing
CPT codes (that is, 93015 and 93017),
we are also proposing to revise the PE
database for these services and allocate
the 55-minute service period time to the
exam table and the stress testing
equipment rather than the 41 minutes
currently assigned.
d. Revisions to § 414.22(b)(5)(i)
Concerning Practice Expense
Current regulations at § 414.22(b)(5)(i)
provide an explanation of the two levels
of PE RVUs—facility and nonfacility—
that are used in determining payment
under the PFS. Section
414.22(b)(5)(i)(A) discusses facility PE
RVUs and § 414.22 (b)(5)(i)(B) discusses
nonfacility PE RVUs. Language in each
of these sections incorrectly implies that
the facility PE RVU is lower than or
equal to the nonfacility PE RVUs.
However, there are some instances
where the facility PE RVUs may actually
be greater than the nonfacility PE RVUs.
In order to address this inaccuracy, we
are proposing to revise § 414.22(b)(5)(i)
(A) and (B) to remove this language.
B. Geographic Practice Cost Indices
(GPCI): Locality Discussion
[If you choose to comment on issues
in this section, please include the
caption ‘‘GPCI: LOCALITY
DISCUSSION’’ at the beginning of your
comments.]
1. Update
Section 1848(e)(1)(A) of the Act
requires us to develop separate
Geographic Practice Cost Indices
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(GPCIs) to measure resource cost
differences among localities compared
to the national average for each of the
three fee schedule components (work,
PE and malpractice). While requiring
that the PE and malpractice GPCIs
reflect the full relative cost differences,
section 1848(e)(1)(A)(iii) of the Act
requires that the physician work GPCIs
reflect only one-quarter of the relative
cost differences compared to the
national average.
Section 1848(e)(1)(C) of the Act
requires us to review and, if necessary,
adjust the GPCIs at least every 3 years.
This section also specifies that if more
than 1 year has elapsed since the last
GPCI revision, we must phase in the
adjustment over 2 years, applying only
one-half of any adjustment in each year.
As discussed in the CY 2008 PFS final
rule with comment period (72 FR
66243), in CY 2008 we established new
GPCIs for each Medicare locality and
implemented them. The CY 2008
adjustment to the GPCIs reflected the
first year of the 2-year phase-in.
We note that the proposed CY 2009
physician work GPCIs do not reflect the
1.000 floor that was in place during CY
2006 through June 30, 2008. As
discussed in section II.S. of this
preamble, ‘‘Expiring Provisions and
Related Discussion’’, the 1.000 work
GPCI floor expired as of January 1, 2008
in accordance with section 102 of the
MIEA-TRHCA. However, section 103 of
the MMSEA extended application of
1.000 floor to the physician work GPCI
through June 30, 2008. See Addenda D
and E for the proposed CY 2009 GPCIs
and summarized geographic adjustment
factors (GAFs).
For a detailed explanation of how the
GPCI update was developed, see the CY
2008 PFS final rule with comment
period (72 FR 66244).
2. Payment Localities
sroberts on PROD1PC70 with PROPOSALS
a. Background
As stated above in this section,
section 1848(e)(1)(A) of the Act requires
us to develop separate GPCIs to measure
resource cost differences among
localities compared to the national
average for each of the three fee
schedule components (work, PE, and
malpractice). Payments under the PFS
are based on the relative resources
required to provide services, and are
adjusted for differences in resource
costs among payment localities using
the GPCIs. As a result, PFS payments
vary between localities. Although the
PFS payment for a particular service is
actually adjusted by applying a GPCI to
each fee schedule component, for
purposes of discussion and comparison,
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we calculate a geographic adjustment
factor (GAF) for each locality. These
GAFs reflect a weighted average of the
GPCIs within the locality and can be
used as a general proxy for area practice
costs. A GAF is calculated to reflect a
summarization of the GPCIs, (which is
used only to make comparisons across
localities). The GAFs are not an absolute
measure of actual costs, nor are they
used to calculate PFS payments. Rather,
they are a tool that can be used as a
proxy for differences in the cost of
operating a medical practice among
various geographic areas (for example
counties) for the purpose of assessing
the potential impact of alternative
locality configurations.
Prior to 1992, Medicare payments for
physicians’ services were made on the
basis of reasonable charges. Payment
localities were established under the
reasonable charge system by local
Medicare carriers based on their
knowledge of local physician charging
patterns and economic conditions. A
total of 210 localities were developed;
including 22 ‘‘Statewide’’ localities
where all areas within a State (whether
urban or rural) received the same
payment amount for a given service.
These localities changed little between
the inception of Medicare in 1966 and
the beginning of the PFS. Following the
inception of the PFS, we acknowledged
that there was no consistent geographic
basis for these localities and that they
did not reflect the significant economic
and demographic changes that had
taken place since 1966. As a result, a
study was begun in 1994 which
culminated in a comprehensive locality
revision which was implemented in
1997.
The 1997 payment locality revision
was based and built upon the prior
locality structure. The 22 previously
existing Statewide localities remained
Statewide localities. New localities were
established in the remaining 28 States
by comparing the area cost differences
(using the GAFs as a proxy for costs) of
the localities within these States. We
ranked the existing localities within
these States by GAFs in descending
order. The GAF of the highest locality
within a State was compared to the
weighted average GAF of other
localities. If the differences between
these GAFs exceeded 5 percent, the
highest locality remained a distinct
locality. If the GAFs associated with all
the localities in a State did not vary by
at least 5 percent, the State became a
Statewide locality. If the highest locality
remained a distinct locality, the process
was repeated for the second highest
locality and so on until the variation
among remaining localities fell below
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38513
the 5 percent threshold. The rest of the
localities within the State were
combined into a single rest-of-State
locality as their costs were relatively
homogeneous. The revised locality
structure (which is the one currently in
use) reduced the number of localities
from 210 to 89. The number of
Statewide localities increased from 22 to
34. The development of the current
locality structure is described in detail
in the CY 1997 PFS proposed rule (61
FR 34615) and the final rule (61 FR
59494).
Although there have been no changes
to the locality structure since 1997, we
have considered and proposed making
changes in recent years. As we have
frequently noted, any changes to the
locality configuration must be made in
a budget neutral manner. Therefore,
changes in localities can lead to
significant redistributions in payments.
For many years, we have not considered
making changes to localities without the
support of a State Medical Association,
which we believed would demonstrate
consensus for the change among the
professionals who would be affected.
However, we recognize that over time
changes in demographics or local
economic conditions may lead us to
conduct a more comprehensive
examination of existing payment
localities.
Payment Locality Approaches Discussed
in the CY 2008 PFS Proposed Rule
For the past several years, we have
been involved in discussions with
California physicians and their
representatives about recent shifts in
relative demographics and economic
conditions among a number of counties
within the current California payment
locality structure. In the CY 2008
proposed rule, we described three
options for changing the payment
localities in California. A detailed
discussion of the options for changing
the payment localities in California may
be found in both the CY 2008 PFS
proposed rule and final rule with
comment period (72 FR 38139 and 72
FR 66245, respectively).
After evaluating the comments on
these options, which included
MedPAC’s two suggestions for
developing changes in payment
localities for the entire country (not just
California), other States expressing
interest in having their payment
localities reconfigured, and the
California Medical Association’s
decision not to endorse any option, we
decided not to proceed with any of the
alternatives we presented. We explained
in the CY 2008 final rule with comment
period (72 FR 66248) that we intend to
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
conduct a thorough analysis of potential
approaches to reconfiguring localities
and would address this issue again in
future rulemaking. We also noted that
some commenters wanted us to consider
a national reconfiguration of localities
rather than just making changes one
State at a time.
sroberts on PROD1PC70 with PROPOSALS
b. Alternative Payment Locality
Approaches
As a follow-up to the CY 2008 PFS
final rule with comment period, we
have contracted with Acumen, LLC to
conduct a preliminary study of several
options for revising the payment
localities. To that end, we are currently
reviewing several alternative
approaches for reconfiguring payment
localities on a nationwide basis.
However, our study of possible
alternative payment locality
configurations is in the early stages of
development. The discussion that
follows provides a brief description of
the alternative payment locality
configurations currently under
consideration. An interim report on the
results of this research will be posted on
the CMS Web site following the
publication of this proposed rule.
At this time, we are not proposing to
make any changes to our payment
localities. When we are ready to propose
a change to the locality configuration,
we will provide extensive opportunities
for public comment (for example, town
hall meetings or open door forums, as
well as soliciting public comments in a
proposed rule) before implementing any
change. If we would make changes to
the locality structure, we anticipate
applying any locality reconfiguration
uniformly to all States.
Option 1: CMS Core Based Statistical
Area (CBSA) Payment Locality
Configuration
Option 1 would use the Office of
Management and Budget (OMB’s)
Metropolitan Statistical Area (MSA)
designations for the payment locality
configuration. MSAs would be
considered as urban core-based
statistical areas (CBSAs). Micropolitan
Areas (as defined by OMB) and rural
areas would be considered as non-urban
(rest of State) CBSAs. This approach
would be consistent with the inpatient
hospital prospective payment system
(IPPS) pre-reclassification CBSA
assignments and with the geographic
payment adjustments used in other
payment systems such as ESRD
facilities, SNFs, ASCs, and home health
agencies (HHAs). Under this method,
GPCI payment localities would be
defined by MSAs (urban CBSAs) and
‘‘rest of State’’ areas (non-urban CBSAs)
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18:46 Jul 03, 2008
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and the number of localities would
increase.
Option 2: Separate High Cost Counties
From Existing Localities
This method for reconfiguring
payment localities was suggested by
MedPAC as part of its comments on the
CY 2008 PFS proposed rule. Under this
approach, we would begin with the
existing 89 GPCI localities and create
new localities based on an iterative
comparison process using the GAF as a
proxy for costs. (As discussed above, the
GAF is used as a general proxy for area
practice costs. The GAFs are used only
to make comparisons across localities or
other geographic subdivision and do not
reflect an absolute measure of costs.) For
example, the county with the highest
GAF in a given locality is compared to
the average GAF for all other counties
in the locality. If the GAF for the highest
county exceeds the average GAF for all
other counties in the locality by more
than 5 percent, the highest county is
assigned its own locality. The GAF of
the second highest county is then
compared to the average GAF for all
other remaining counties in the locality.
If the GAF for the second highest county
exceeds the average GAF for the other
remaining counties by more than 5
percent, the second highest county is
also assigned its own locality. The
process is repeated for the next highest
county(ies) until the difference between
the GAF for the highest remaining
county and the average GAF for the
other remaining counties is less than 5
percent. This approach is similar to an
option we presented last year for
California except that under this option,
the GAF of higher counties is compared
to the average GAF of all other
remaining lower GAF counties, rather
than to the entire locality’s GAF. As
such, this approach would remove
higher cost counties from their existing
locality structure and they would each
be placed into their own locality.
Option 3: Separate MSAs From
Statewide Localities
Option 3 was also suggested by
MedPAC. This alternative for payment
locality configuration begins with
Statewide localities (for every State) and
creates separate localities for higher cost
(higher GAF) MSAs. Under this
approach, localities are determined
within each State based on the same
iterative process as described above in
option 2. The GAF of the highest MSA
in a given State is compared to the
average GAF of all other areas within
the State. For example, the highest cost
MSA would be compared to an average
GAF for all other MSAs in the State and
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the counties in the ‘‘rest of State’’ area.
If the GAF of the highest MSA is more
than 5 percent greater than the average
GAF for all other areas in that State,
then the highest MSA becomes a
separate locality. This iterative process
continues with the second highest MSA.
The process stops when the GAF of the
highest remaining MSA is not more than
5 percent greater than the average of the
other remaining areas within the State.
This option is similar to option 2;
however, it removes higher cost MSAs
from the ‘‘rest of State’’ locality rather
than removing higher cost counties from
their existing payment locality.
Option 4: Group Counties Within a State
Into Locality Tiers Based on Costs
This approach combines counties
within a State into tiers (or groupings)
based on similar GAFs. (This alternative
is similar to an option we considered for
California last year). Under this
approach, counties in each State are
sorted in descending order by GAFs.
The highest county GAF is compared to
the second highest. If the difference is
less than 5 percent, the counties are
included in the same locality. The third
highest county GAF is then compared to
the highest county GAF. This process
continues until a county has a GAF
difference from the highest county GAF
that is more than 5 percent. When this
occurs, that county becomes the highest
county in a new payment locality and
the process is repeated for all counties
in the State. This methodology creates
tiers of counties (within each State) that
may or may not be contiguous but share
similar practice costs.
c. Solicitation of Comments
As noted earlier in this section, we
will be posting an interim report of our
locality study on the CMS Web site after
publication of this proposed rule.
Information on how to access the report
will be made available through the PFS
home page on the CMS Web site at
https://www.cms.hhs.gov/
PhysicianFeeSched/. Additionally, we
plan to update our Web site periodically
as our research progresses.
We encourage interested parties to
submit comments on the options
presented both here and in our interim
report to the address for comments
listed on our Web site. We are also
interested in receiving comments and
suggestions on other potential
alternative locality configurations (in
addition to the options described in this
section). Additionally, we are requesting
comments on the administrative and
operational issues associated with the
various options under consideration. As
previously discussed, we are not
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proposing any changes to the payment
locality configurations at this time.
When we are ready to propose any
changes to the locality configuration, we
will provide extensive opportunities for
public comment (for example, town hall
meetings or open door forums) on
specific proposals before implementing
any change.
C. Malpractice RVUs (PC/TC Issue)
[If you choose to comment on issues
in this section, please include the
caption ‘‘MALPRACTICE RVUs’’ at the
beginning of your comments.]
In the CY 1992 PFS final rule (56 FR
59527), we described in detail how
malpractice (MP) RVUs are calculated
for each physicians’ service and, when
professional liability insurance (PLI)
premium data are not available, how we
crosswalk or assign RVUs to services.
Following the initial calculation of
resource-based MP RVUs, the MP RVUs
are then subject to review by CMS at 5year intervals. Reviewing the MP RVUs
every 5 years ensures that the MP
relative values reflect any marketplace
changes in the physician community’s
ability to acquire PLI. However, there
are codes that define certain radiologic
services that have never been part of the
MP RVU review process. The MP RVUs
initially assigned to these codes have
not been revised because there is a lack
of suitable data on the cost of PLI for
technical staff or imaging centers (where
most of these services are performed).
In the CY 2008 PFS proposed rule (72
FR 38143), we noted that the PLI
workgroup, a subset of the Relative
Value Update Committee (RUC) of the
AMA, brought to our attention the fact
that there are approximately 600
services that have technical component
(TC) MP RVUs that are greater than the
professional component (PC) MP RVUs.
Suggesting that it is illogical for the MP
RVUs for the TC of a service to be higher
than the MP RVUs for the PC, the PLI
workgroup requested that we make
changes to these MP RVUs.
We responded that we would like to
develop a resource-based methodology
for the technical portion of these MP
RVUs; but that we did not have data to
support any such change. We asked for
information about how, and if,
technicians employed by facilities
purchase PLI or how their professional
liability is insured. We also asked for
comments on what types of PLI are
carried by facilities that perform these
technical services.
In comments submitted in response to
the proposed rule, the American College
of Cardiology (ACC) suggested that we
‘‘flip’’ the MP RVUs between the PCs
and TCs. This proposal would reduce
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the MP RVUs for the TC and increase
the MP RVUs for the PC. We also
received comments from the American
College of Radiology (ACR) suggesting
that we make the TC RVUs equal to the
PC RVUs. The ACR stated that there was
clearly some professional liability
associated with these codes and using
the resource-based MP RVUS of the PC
maintains the resource-based
methodology and eliminates the logical
inequities of the TC having more RVUs
than the PC.
The AMA’s PLI workgroup
recommended that we reduce the MP
RVUs for the TC for these codes to zero.
The workgroup suggested that there are
no identifiable separate costs for
professional liability for the TC. The
workgroup also recommended that the
MP RVUs removed from the TC for
these codes be redistributed across all
physicians’ services.
In the CY 2008 PFS final rule with
comment period (72 FR 66248), we
stated, in response to the suggestions
from the AMA, ACR, and ACC, that we
that we did not believe it would be
appropriate to ‘‘flip’’ the PC and TC MP
RVU values because the professional
part of the MP RVUs have undergone a
resource-based review, are derived from
actual data, and are consistent with the
resource-based methodology for PFS
payments. We also stated that we would
not simply equalize the PC and TC RVU
values because we had no data to
demonstrate that the MP costs for the
technical portion of these services are
the same as the professional portion. In
response to the suggestion of the PLI
workgroup, we stated that we are not
able to evaluate whether sufficient data
exists or to make a judgment on the
RUC’s assertion that there are no such
identifiable costs (and therefore, no data
are available).
We also received several comments
supporting our decision to examine the
possibility of developing a resourcebased methodology for the technical
portion of the MP RVUs. The
commenters supported the collection
and analysis of appropriate MP
premium data before making any
changes to the MP RVU distribution. In
response, in the CY 2008 PFS final rule
with comment period, we stated that we
would continue to solicit, collect, and
analyze appropriate data on this subject
and that when we had sufficient
information we would be better able to
make a determination as to what, if any,
changes should be made, and that we
would propose any changes in future
rulemaking.
The issue of assigning MP RVUs for
the TC of certain services continues to
be a source of concern for several
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physician associations and for CMS. We
did not receive a response to our request
for additional data on this issue. This
issue is one of importance to CMS
because the lack of available PLI data
affects our ability to make a resourcebased evaluation of the TC MP RVUs for
these codes. As part of our work to
update the MP RVUs in CY 2010, we
will instruct our contractor to research
available data sources for the MP costs
associated with the TC portion of these
codes. We will also ask the contractor to
look at what is included in general
liability insurance versus PLI for
physicians and other professional staff.
If data sources are available, we will
instruct the contractor to gather the data
so we will be ready to implement
revised MP RVUs for the TC of these
codes in conjunction with the update of
MP RVUs for the PCs in 2010.
D. Medicare Telehealth Services
[If you choose to comment on issues
in this section, please include the
caption ‘‘MEDICARE TELEHEALTH
SERVICES’’ at the beginning of your
comments.]
1. Requests for Adding Services to the
List of Medicare Telehealth Services
Section 1834(m)(4)(F) of the Act
defines telehealth services as
professional consultations, office visits,
and office psychiatry services, and any
additional service specified by the
Secretary. In addition, the statute
required us to establish a process for
adding services to or deleting services
from the list of telehealth services on an
annual basis.
In the December 31, 2002 Federal
Register (67 FR 79988), we established
a process for adding services to or
deleting services from the list of
Medicare telehealth services. This
process provides the public an ongoing
opportunity to submit requests for
adding services. We assign any request
to make additions to the list of Medicare
telehealth services to one of the
following categories:
• Category #1: Services that are
similar to professional consultations,
office visits, and office psychiatry
services. In reviewing these requests, we
look for similarities between the
proposed and existing telehealth
services for the roles of, and interactions
among, the beneficiary, the physician
(or other practitioner) at the distant site
and, if necessary, the telepresenter. We
also look for similarities in the
telecommunications system used to
deliver the proposed service, for
example, the use of interactive audio
and video equipment.
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• Category #2: Services that are not
similar to the current list of telehealth
services. Our review of these requests
includes an assessment of whether the
use of a telecommunications system to
deliver the service produces similar
diagnostic findings or therapeutic
interventions as compared with the
face-to-face ‘‘hands on’’ delivery of the
same service. Requestors should submit
evidence showing that the use of a
telecommunications system does not
affect the diagnosis or treatment plan as
compared to a face-to-face delivery of
the requested service.
Since establishing the process, we
have added the following to the list of
Medicare telehealth services:
psychiatric diagnostic interview
examination; ESRD services with two to
three visits per month and four or more
visits per month (although we require at
least one visit a month to be furnished
in-person ‘‘hands on’’, by a physician,
clinical nurse specialist (CNS), nurse
practitioner (NP), or physician assistant
(PA) to examine the vascular access
site); individual medical nutrition
therapy; and the neurobehavioral status
exam.
Requests to add services to the list of
Medicare telehealth services must be
submitted and received no later than
December 31 of each calendar year to be
considered for the next rulemaking
cycle. For example, requests submitted
before the end of CY 2007 are
considered for the CY 2009 proposed
rule. For more information on
submitting a request for an addition to
the list of Medicare telehealth services,
visit our Web site at www.cms.hhs.gov/
telehealth/.
sroberts on PROD1PC70 with PROPOSALS
2. Submitted Requests for Addition to
the List of Telehealth Services
We received the following requests in
CY 2007 for additional approved
services to become effective for CY
2009: (1) Diabetes self-management
training (DSMT); and (2) critical care
services. In addition, in the CY 2008
PFS final rule with comment period (72
FR 66250), we committed to continuing
to evaluate last year’s request to add
subsequent hospital care to the list of
approved telehealth services. The
following is a discussion of these
requests.
a. Diabetes Self-Management Training
(DSMT)
The American Telemedicine
Association (ATA) and the Marshfield
Clinic submitted a request to add
diabetes self-management training
(DSMT) (as represented by Healthcare
Common Procedure Coding System
(HCPCS) codes G0108 and G0109) to the
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list of approved telehealth services. In
the CY 2006 PFS proposed rule (70 FR
45787) and final rule with comment
period (70 FR 70157), we did not
approve a previous request to add
DSMT to the list of approved telehealth
services. We approved a request to add
individual medical nutrition therapy
(MNT) to the list of approved telehealth
services.
The current request asks us to
evaluate and approve individual and
group DSMT as Category 1 services
because they are comparable to MNT.
The requesters believe that MNT and
DSMT are similar because both are
designed to provide education in the
primary care setting and to facilitate
behavior modification on the part of the
patient. The requesters asked us to
examine the clinical outcomes of
providing the service and evidencebased practice in determining whether
the codes should be added to the list of
approved telehealth services. The
requesters also asked us to examine
whether DSMT is appropriate care by
those standards (clinical outcomes and
evidence-based practice), and they
provided evidence that DSMT has a
direct effect on reducing HbA1c levels
and improves outcomes for patients.
CMS Review
The requesters specifically asked us to
evaluate DSMT as a Category 1 service
based on clinical outcomes and
evidence-based practice. This approach
does not match the criteria we use to
assign services to Category 1. To
determine whether to assign a request to
Category 1, we look for similarities
between the service that is being
considered for addition and existing
telehealth services for the roles of, and
interactions among, the beneficiary, the
physician (or other practitioner) at the
distant site and, if necessary, the
telepresenter. Analysis of clinical
outcomes and evidence-based practice
alone are not sufficient to assign
services to Category 1.
The requesters believe that DSMT
services can be considered and
approved for telehealth as Category 1
services because they are comparable to
MNT services approved for telehealth.
Section 414.65 provides for the payment
of individual MNT furnished via
telehealth. Group MNT is not an
approved telehealth service, so it cannot
be used as a point of comparison for
group DSMT (as represented by HCPCS
code G0109). Moreover, as noted in our
previous review of DSMT, group
counseling services have a different
interactive dynamic between the
physician or practitioner at the distant
site and beneficiary at the originating
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site as compared to services on the
current list of Medicare telehealth
services (70 FR 45787 and 70 FR 70157).
Since the interactive dynamic of group
DSMT is not similar to individual MNT
or any other service currently approved
for telehealth, we believe that group
DSMT must be evaluated as a category
2 service.
Section 1861(qq) of the Act provides
that DSMT (which can be either a group
or individual service) involves
educational and training services to
ensure therapy compliance or to provide
necessary skills and knowledge to
participate in managing the condition,
including the skills necessary for the
self-administration of injectable drugs.
We believe individual DSMT is not
analogous to individual MNT because of
the element of skill-based training that
is encompassed within individual
DSMT, but is not an aspect of individual
MNT (or any other services currently
approved for telehealth). Due to the
statutory requirement that DSMT
services include teaching beneficiaries
the skills necessary for the selfadministration of injectable drugs, we
believe that DSMT, whether provided to
an individual or a group, must be
evaluated as a category 2 service.
Because we consider individual and
group DSMT to be category 2 services,
we need to evaluate whether these are
services for which telehealth can be an
adequate substitute for a face-to-face
encounter. Most of the studies cited by
the requesters focused on the value of
DSMT in helping individuals with
diabetes achieve successful healthrelated outcomes. Some of these studies
documented clinical outcomes and
evidence-based practice of the
appropriateness of DSMT in treating
diabetes, but they did not provide
comparative analysis demonstrating that
DSMT provided via telehealth is
equivalent to the face-to-face delivery of
such services. As such, these studies
were not relevant to this review.
One study cited by the requesters
which analyzed diabetes care provided
via telehealth defined telehealth
technologies to consist of messaging and
monitoring devices. The telehealth
technologies utilized in this study do
not correspond with our definitions of
telehealth as specified in § 410.78.
Another study cited by the requesters
as examining the effectiveness of
diabetes management provided via
telehealth was intended to help diabetic
participants manage their care with the
help of a home-based telehealth support
system. The study’s authors note some
interesting correlations that were
observed without any claim of
reliability or validity, and the study’s
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authors clearly state that no causal
relationships can be referred from the
data.
A third study cited by the requesters
compared diabetes education provided
through telemedicine technology to
diabetes education provided in-person.
The study design did not include
training patients in the selfadministration of injectable drugs,
which is one of the elements of DSMT
under section 1861(qq) of the Act. The
success of one diabetes educator in
teaching the self-administration of
insulin to one of the participants was
anecdotal; no conclusive evidence was
provided that insulin administration
can routinely be taught effectively as a
telehealth service.
After reviewing these studies, we
determined that we do not have
sufficient comparative analysis or other
compelling evidence that either
individual or group DSMT delivered via
telecommunications is equivalent to
DSMT delivered face-to-face. We do not
find evidence that providing DSMT via
telehealth is an adequate substitute for
the face-to-face encounter between the
practitioner and the patient. Therefore,
we are not proposing to add individual
and group DSMT (as described by
HCPCS codes G0108 and G0109) to the
list of approved telehealth services.
sroberts on PROD1PC70 with PROPOSALS
b. Critical Care Services
The University of Pittsburgh Medical
Center (UPMC) submitted a request to
add critical care services (as defined by
HCPCS codes 99291 and 99292) as a
‘‘Category 1’’ service. The requester
draws similarities to the evaluation and
management (E/M) consultation services
currently approved for telehealth. The
requester noted that the primary
difference between critical care and
other E/M services already approved for
telehealth is that critical care is specific
to patients with vital organ failure.
Anecdotally, UPMC has found that the
use of telecommunications systems and
software gives critically injured or ill
patients (specifically stroke patients)
timely access to highly specialized
physicians. According to the request,
UPMC physicians are able to give ‘‘an
equally effective examination, spend the
same amount of time with the patient
and develop the same course of
treatment just as if they were bedside.’’
CMS Review
The acuity of a critical care patient is
significantly greater than the acuity
generally associated with patients
receiving the E/M services approved for
telehealth. Because of the acuity of
critically ill patients, we do not consider
critical care services similar to any
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services on the current list of Medicare
telehealth services. Therefore, we
believe critical care must be evaluated
as a Category 2 service.
Because we consider critical care
services to be Category 2, we need to
evaluate whether these are services for
which telehealth can be an adequate
substitute for a face-to-face encounter.
We have no evidence suggesting that the
use of telehealth could be a reasonable
surrogate for the face-to-face delivery of
this type of care. As such, we do not
propose to add critical care services (as
defined by HCPCS codes 99291 and
99292) to the list of approved telehealth
services.
c. Subsequent hospital care
Prior to 2006, follow-up inpatient
consultations (as described by CPT
codes 99261 through 99263) were
approved for telehealth. CPT 2006
deleted the follow-up inpatient
consultation codes and advised
practitioners instead to bill for these
services using the codes for subsequent
hospital care (as described by CPT codes
99231 through 99233). For CY 2006, we
removed the deleted codes for follow-up
inpatient consultations from the list of
approved telehealth services.
In the CY 2008 PFS proposed rule (72
FR 38144) and final rule with comment
period (72 FR 66250), we discussed a
request we received from the ATA to
add subsequent hospital care to the list
of approved telehealth services. Because
there is currently no method for
practitioners to bill for follow-up
inpatient consultations delivered via
telehealth, the ATA requested that we
approve use of the subsequent hospital
care codes to bill follow-up inpatient
consultations furnished via telehealth,
as well as to bill for subsequent hospital
care services furnished via telehealth
that are related to the ongoing E/M of
the hospital inpatient (72 FR 66250).
Since the subsequent hospital care
codes describe a broader range of
services than follow-up inpatient
consultation, including some services
that may not be appropriate for addition
to the list of telehealth services, we did
not add subsequent hospital care to the
list of approved telehealth services.
Instead, we committed to continue to
evaluate whether, and if so, by what
mechanism subsequent hospital care
could be approved for telehealth when
used for follow-up inpatient
consultations (72 FR 66249).
CMS Review
We considered the possibility of
approving subsequent hospital care for
telehealth with specific limitations, for
example, approving subsequent hospital
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38517
care for telehealth only when the codes
are used for follow-up inpatient
consultations. Given the potential acuity
level of the patient in the hospital
setting, we remain concerned that
practitioners could misuse the codes
and provide a broader range of
subsequent hospital care services via
telehealth than was formerly approved
for telehealth with the follow-up
inpatient consultation codes, including
the on-going, day-to-day E/M of a
hospital inpatient. (For a discussion of
these issues, see 72 FR 38144 and
66249.) We were also concerned that it
could be difficult to implement
sufficient controls and monitoring to
ensure that the telehealth use of the
codes for subsequent hospital care is
limited to the delivery of services that
were formerly described as follow-up
inpatient consultations.
We have considered this issue further,
and for CY 2009, we are proposing to
create a new series of HCPCS codes for
follow-up inpatient telehealth
consultations. Practitioners would use
these codes to submit claims to their
Medicare contractors for payment of
follow-up inpatient consultations
provided via telehealth. The new
HCPCS codes will be limited to the
range of services included in the scope
of the previous CPT codes for follow-up
inpatient consultations, and the
descriptions will be modified to limit
the use of such services for telehealth.
The HCPCS codes will clearly designate
these as follow-up inpatient
consultations provided via telehealth,
and not subsequent hospital care used
for inpatient visits. Utilization of these
codes would allow us to provide
payment for these services, as well as
enable us to monitor whether the codes
are used appropriately. We also propose
to establish the RVUs for these services
at the same level as the RVUs
established for subsequent hospital care
(as described by CPT codes 99231
through 99233). We believe this is
appropriate because a physician or
practitioner furnishing a telehealth
service is paid an amount equal to the
amount that would have been paid if the
service had been furnished without the
use of a telecommunication system.
Since physicians and practitioners
furnishing follow-up inpatient
consultations in a face-to-face encounter
must continue to utilize subsequent
hospital care codes (as described by CPT
codes 99231 through 99233), we believe
it is appropriate to set the RVUs for the
new telehealth G codes at the same level
as for the subsequent hospital care
codes.
As defined below in this section, we
are proposing to create HCPCS codes
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specific to the telehealth delivery of
follow-up inpatient consultations solely
to re-establish the ability for
practitioners to provide and bill for
follow-up inpatient consultations
delivered via telehealth. These codes are
intended for use by practitioners serving
beneficiaries located at qualifying
originating sites (as defined in § 410.78)
requiring the consultative input of
physicians who are not available for a
face-to-face encounter. These codes are
not intended to include the ongoing
E/M of a hospital inpatient.
Claims for follow-up inpatient
telehealth consultations will be
submitted to the contractors that process
claims for the service area where the
physician or practitioner who furnishes
the service is located. Physicians/
practitioners must submit the
appropriate HCPCS procedure code for
follow-up inpatient telehealth
consultations along with the ‘‘GT’’
modifier (‘‘via interactive audio and
video telecommunications system’’). By
coding and billing the ‘‘GT’’ modifier
with the inpatient follow-up inpatient
telehealth consultation codes, the
distant site physician/practitioner
certifies that the beneficiary was present
at an eligible originating site when the
telehealth service was furnished. (See
the CMS Internet-Only Medicare Claims
Processing Manual, Pub. 100–04,
Chapter 15, Section 190.6.1 for
instructions for submission of
interactive telehealth claims.)
In the case of Federal telemedicine
demonstration programs conducted in
Alaska or Hawaii, store and forward
technologies may be used as a substitute
for an interactive telecommunications
system. Covered store and forward
telehealth services are billed with the
‘‘GQ’’ modifier, ‘‘via asynchronous
telecommunications system.’’ By using
the ‘‘GQ’’ modifier, the distant site
physician/practitioner certifies that the
asynchronous medical file was collected
and transmitted to him or her at the
distant site from a Federal telemedicine
demonstration project conducted in
Alaska or Hawaii. (See the CMS
Internet-Only Medicare Claims
Processing Manual, Pub. 100–04,
Chapter 15, Section 190.6.2 for
instructions for submission of telehealth
store and forward claims.)
Follow-Up Inpatient Telehealth
Consultations Defined
Follow-up inpatient telehealth
consultations are consultative visits
furnished via telehealth to complete an
initial consultation or subsequent
consultative visits requested by the
attending physician. The initial
inpatient consultation may have been
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provided in person or via telehealth.
The conditions of payment for followup inpatient telehealth consultations,
including qualifying originating sites
and the types of telecommunications
systems recognized by Medicare, are
subject to the provisions of § 410.78.
Payment for these services is subject to
the provisions of § 414.65.
We are proposing to describe followup inpatient telehealth consultations to
include monitoring progress,
recommending management
modifications, or advising on a new
plan of care in response to changes in
the patient’s status. Counseling and
coordination of care with other
providers or agencies would be
included as well, consistent with nature
of the problem(s) and the patient’s
needs. The physician or practitioner
who furnishes the inpatient follow-up
consultation via telehealth may not be
the physician of record or the attending
physician, and the follow-up inpatient
consultation would be distinct from the
follow-up care provided by a physician
of record or the attending physician. If
a physician consultant has initiated
treatment at an initial consultation and
participates thereafter in the patient’s
ongoing care management, such care
would not be included in the definition
of a follow-up inpatient consultation
and is not appropriate for delivery via
telehealth.
Payment for follow-up telehealth
inpatient consultations would include
all consultation-related services
furnished before, during, and after
communicating with the patient via
telehealth. Pre-service activities would
include, but would not be limited to,
reviewing patient data (for example,
diagnostic and imaging studies, interim
lab work) and communicating with
other professionals or family members.
Intra-service activities must include at
least two of the three key elements
described below for each procedure
code. Post-service activities would
include, but would not be limited to,
completing medical records or other
documentation and communicating
results of the consultation and further
care plans to other health care
professionals. No additional E/M service
could be billed for work related to a
follow-up inpatient telehealth
consultation.
Follow-up inpatient telehealth
consultations could be provided at
various levels of complexity. To reflect
this, we propose to establish three
codes.
Practitioners taking a problemfocused interval history, conducting a
problem-focused examination, and
engaging in medical decision-making
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that is straightforward or of low
complexity, would bill a limited service,
using HCPCS GXX14. At this level of
service, practitioners would typically
spend 15 minutes communicating with
the patient via telehealth.
Practitioners taking an expanded
focused interval history, conducting an
expanded problem-focused
examination, and engaging in medical
decision-making that is of moderate
complexity, would bill an intermediate
service using HCPCS GXX15. At this
level of service, practitioners would
typically spend 25 minutes
communicating with the patient via
telehealth.
Practitioners taking a detailed interval
history, conducting a detailed
examination, and engaging in medical
decision-making that is of high
complexity, would bill a complex
service, using HCPCS GXX16. At this
level of service, practitioners would
typically spend 35 minutes or more
communicating with the patient via
telehealth.
We are proposing to establish the
following HCPCS codes to describe
follow-up inpatient consultations
approved for telehealth:
• GXX14, Follow-up inpatient
telehealth consultation, limited,
typically 15 minutes communicating
with the patient via telehealth.
• GXX15, Follow-up inpatient
telehealth consultation, intermediate,
typically 25 minutes communicating
with the patient via telehealth.
• GXX16, Follow-up inpatient
telehealth consultation, complex,
typically 35 minutes or more
communicating with the patient via
telehealth.
E. Specific Coding Issues Related to the
Physician Fee Schedule
[If you choose to comment on issues
in this section, please include the
caption ‘‘CODING ISSUES’’ at the
beginning of your comments.]
1. Payment for PreadministrationRelated Services for Intravenous
Infusion of Immune Globulin
Immune globulin is a complicated
biological product that is purified from
human plasma obtained from human
plasma donors. Its purification is a
complex process that occurs along a
very long timeline, and therefore, only
a small number of manufacturers
provide commercially available
products. In past years, there have been
issues reported with the supply of
intravenous immune globulin (IVIG)
due to numerous factors including
decreased manufacturing capacity,
increased usage, more sophisticated
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processing steps, and low demand for
byproducts from IVIG fractionation.
The Medicare payment rates for IVIG
products are established through the
Part B average sales price (ASP) drug
methodology. Payment for
administration of the IVIG is made
separately under the PFS. IVIG
administration is billed using the CPT
codes for the first hour and, as needed,
additional hour CPT infusion codes for
therapeutic, prophylactic, and
diagnostic services.
In addition, a separate payment has
been made under the PFS and the
Hospital Outpatient Prospective
Payment System (OPPS) for IVIG
preadministration-related services since
2006. Separate payment for the
preadministration-related services was
implemented in 2006 largely because of
reported instability in the IVIG
marketplace due, in part, to the
implementation of the new ASP
payment methodology for IVIG drugs.
As discussed in the CY 2006 PFS final
rule with comment period (70 FR 70219
through 70220), at that time the IVIG
marketplace was one in which a
significant portion of IVIG products
previously available in CY 2005 were
being discontinued and other products
were expected to enter the market over
the next year. For CY 2006, there were
only 2 HCPCS codes describing all IVIG
products based on either lyophilized
(powdered) or liquid preparation.
To continue to ensure appropriate
access to IVIG, in CY 2006 during this
short-term period of market instability
for IVIG, we temporarily initiated a
separate payment to physicians to
reflect the additional resources that may
have been associated with locating and
acquiring adequate IVIG product and
preparing for an office infusion of IVIG.
In order to address what was
considered to be an impermanent period
of market instability, we created a
separate G-code, G0332, IVIG
preadministration-related services for
intravenous infusion of
immunoglobulin, per infusion
encounter. As discussed in the CY 2006
PFS final rule with comment period, we
expected the IVIG marketplace to
stabilize through 2006 and that the
atypical preadministration-related
services relating to IVIG would be
temporary and no longer necessary for
physicians’ offices that provided IVIG
infusions to patients.
However, in the CY 2007 PFS final
rule with comment period (71 FR
69678), we decided to continue the IVIG
preadministration-related services
payment for an additional year to help
ensure patient access to IVIG. We stated
in that rule that we were anticipating
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the results of the HHS Office of
Inspector General (OIG) study on the
availability and pricing of IVIG before
changing this policy. In addition, we
continued to receive comments from
stakeholders that some beneficiaries
were experiencing IVIG access issues
such as delayed treatments and site of
service shifts.
In the CY 2008 PFS proposed rule (72
FR 38146), we proposed to continue
payment for G0332 through CY 2008 at
the same level of PE RVUs as CY 2007.
We referred to the OIG final report
published in April 2007 titled,
‘‘Intravenous Immune Globulin:
Medicare Payment and Availability’’
(OEI–03–05–00404). The OIG had
conducted this study at the request of
the Members of the Congressional
subcommittees on Health within the
House Energy and Commerce and Ways
and Means Committees. The OIG
examined the current state of IVIG
which included analyzing the payment
and supply. Specifically, the OIG
determined whether hospitals and
physicians could purchase IVIG at
prices below the Medicare payment
amounts in 2005 and 2006 and whether
IVIG was readily available to physicians
and distributors in 2005 and 2006.
The OIG found that for the third
quarter of 2006, just over half of IVIG
sales to hospitals and physicians were at
prices below Medicare payment
amounts. Relative to the previous three
quarters, this represented a substantial
increase of the percentage of sales with
prices below Medicare amounts. During
the third quarter of 2006, 56 percent of
IVIG sales to hospitals and over 59
percent of IVIG sales to physicians by
the largest three distributors occurred at
prices below the Medicare payment
amounts. The findings of the OIG report
suggest that stability in the IVIG market
had improved in late 2006. No other
comprehensive studies have been
presented to show continued instability
in market conditions or systematic
problems with patient access.
Recent IVIG drug coding revisions
and reporting have contributed to
increased payments for IVIG products
and, we believe, improved market
stability. Beginning on July 1, 2007, six
new HCPCS codes for specific IVIG
products were adopted to implement
separate payment for these products.
From July 2007 to April 2008, the
weighted average increase in payment,
based on allowed charges by IVIG
product code, was 2.9 percent for all
liquid IVIG products and 3.4 percent for
all IVIG products, both liquid and
powder.
IVIG utilization continues to increase.
National claims history data show
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allowed utilization in physicians’
offices (that is, units of IVIG paid)
increased from slightly over 3,000,000
units in 2006 to slightly over 3,600,000
units in 2007.
We continue to meet with
representatives of the IVIG industry to
discuss their concerns regarding the
pricing of IVIG and Medicare
beneficiary access to this important
therapy. No additional studies have
been published since the OIG report of
April 2007 on IVIG pricing, supply or
patient access issues with IVIG. We
have reviewed national claims data for
IVIG drug utilization, as well as
utilization of the preadministrationrelated service codes. This data show
modest increases in the utilization of
IVIG drugs and the preadministrationrelated service code which suggests that
pricing and access may be improving.
The G-code payment for IVIG
preadministration-related services was
intended to be a temporary stopgap
policy. We continued these temporary
payments for 3 years because we had
received reports of market disruptions
and were concerned about ensuring
beneficiary access to these drugs.
However, we now believe that the
transient market conditions that led us
to adopt the payment for IVIG
preadministration-related services have
improved. Therefore, we are proposing
to discontinue separate payment for
IVIG preadministration-related services
by means of code G0332 furnished on or
after January 1, 2009. The treatment of
these services under the OPPS will be
addressed separately in the OPPS
proposed rule.
2. Multiple Procedure Payment
Reduction for Diagnostic Imaging
In general, we price diagnostic
imaging procedures in the following
three ways:
• The professional component (PC)
represents the physician’s interpretation
(PC-only services are billed with the 26
modifier).
• The technical component (TC)
represents PE and includes clinical staff,
supplies, and equipment (TC-only
services are billed with the TC
modifier).
• The global service represents both
PC and TC.
Effective January 1, 2006, we
implemented a multiple procedure
payment reduction (MPPR) on certain
diagnostic imaging procedures (71 FR
48982 through 49252 and 71 FR 69624
through 70251). When two or more
procedures within one of 11 imaging
code families are furnished on the same
patient in a single session, the TC of the
highest priced procedure is paid at 100
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percent and the TC of each subsequent
procedure is paid at 75 percent (a 25
percent reduction). The reduction does
not apply to the PC.
It is necessary to periodically update
the list of codes subject to the MPPR to
reflect new and deleted codes. We are
proposing to subject several additional
procedures to the MPPR. Six procedures
represent codes newly created since the
MPPR list was established. Four
additional procedures have been
identified as similar to procedures
currently subject to the MPPR. We are
also removing CPT 76778, a deleted
code, from the list. Table 3 contains the
proposed additions to the list. After we
adopted the MPPR, section 5102 of the
Deficit Reduction Act of 2005 (Pub. L.
109–171) (DRA) exempted the
expenditure reductions resulting from
this policy from the statutory budget
neutrality requirement; therefore, we are
proposing that expenditure reductions
resulting from these changes be exempt
from budget neutrality. (See section VI.,
Regulatory Impact Analysis, for a
discussion of budget neutrality.) The
complete list of procedures subject to
the MPPR is in Addendum F of this
proposed rule.
TABLE 3.—PROCEDURES PROPOSED FOR MULTIPLE PROCEDURE PAYMENT REDUCTION
Code
Short descriptor
Code family
70336 ............
mri, temporomandibular joint(s) ...................................................................................
70554 ............
Fmri brain by tech ........................................................................................................
75557 ............
Cardiac mri for morph ..................................................................................................
75559 ............
Cardiac mri w/stress img .............................................................................................
75561 ............
Cardiac mri for morph w/dye .......................................................................................
75563 ............
Cardiac mri w/stress img & dye ...................................................................................
76776 ............
Us exam k transpl w/doppler .......................................................................................
76870 ............
Us exam, scrotum ........................................................................................................
77058 ............
Mri, one breast .............................................................................................................
77059 ............
Mri, both breasts ..........................................................................................................
Family 5 MRI and MRA (Head/Brain/
Neck).
Family 5 MRI and MRA (Head/Brain/
Neck).
Family 4 MRI and MRA (Chest/Abd/Pelvis).
Family 4 MRI and MRA (Chest/Abd/Pelvis).
Family 4 MRI and MRA (Chest/Abd/Pelvis).
Family 4 MRI and MRA (Chest/Abd/Pelvis).
Family 1 Ultrasound (Chest/Abdomen/Pelvis—Non-Obstetrical).
Family 1 Ultrasound (Chest/Abdomen/Pelvis—Non-Obstetrical).
Family 4 MRI and MRA (Chest/Abd/Pelvis).
Family 4 MRI and MRA (Chest/Abd/Pelvis).
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3. Proposed HCPCS Code for Prostate
Saturation Biopsies
Prostate Saturation Biopsy is a
technique currently described by
Category III CPT code 0137T, Biopsy,
prostate, needle, saturation sampling for
prostate mapping. Typically, this
service entails 40 to 80 core samples
taken from the prostate under general
anesthesia. Currently, the biopsies are
reviewed by a pathologist and this
service is captured under CPT code
88305, Surgical pathology, gross and
microscopic examination, which is
separately billed by the physician for
each core sample taken. CPT Code
88305 has a physician work value of
0.75 and a total nonfacility payment rate
of $102.83. We believe that paying
individually for review of each core
sample submitted grossly overpays for
the pathological interpretation and
report for this service.
We are proposing the following four
G codes to more accurately represent the
pathologic evaluation, interpretation,
and report for this service:
• GXXX1, Surgical pathology, gross
and microscopic examination for
prostate needle saturation biopsy
sampling, 1–20 specimens
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• GXXX2, Surgical pathology, gross
and microscopic examination for
prostate needle saturation biopsy
sampling, 21–40 specimens.
• GXXX3, Surgical pathology, gross
and microscopic examination for
prostate needle saturation biopsy
sampling, 41–60 specimens.
• GXXX4, Surgical pathology, gross
and microscopic examination for
prostate needle saturation biopsy
sampling, greater than 60 specimens.
We are proposing to carrier price
these codes. We will gather information
regarding the laboratory and clinical
staff resources required to value these
services.
F. Part B Drug Payment
1. Average Sales Price (ASP) Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘ASP ISSUES’’ at the beginning
of your comments.]
Medicare Part B covers a limited
number of prescription drugs and
biologicals. For the purposes of this
proposed rule, the term ‘‘drugs’’ will
hereafter refer to both drugs and
biologicals, unless otherwise specified.
Medicare Part B covered drugs not paid
on a cost or prospective payment basis
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generally fall into the following three
categories:
• Drugs furnished incident to a
physician’s service.
• DME drugs.
• Drugs specifically covered by
statute (certain immunosuppressive
drugs, for example).
Beginning in CY 2005, the vast
majority of Medicare Part B drugs not
paid on a cost or prospective payment
basis are paid under the ASP
methodology. The ASP methodology is
based on data submitted to us quarterly
by manufacturers. In addition to the
payment for the drug, Medicare
currently pays a furnishing fee for blood
clotting factors, a dispensing fee for
inhalation drugs, and a supplying fee to
pharmacies for certain Part B drugs.
In this section, we discuss recent
statutory changes to the ASP
methodology and other drug payment
issues.
a. Determining the Payment Amount
Based on ASP Data
The methodology for developing
Medicare drug payment allowances
based on the manufacturers’ submitted
ASP data is specified in 42 CFR, part
414, subpart K. We initially established
this regulatory text in the CY 2005 PFS
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final rule with comment period (69 FR
66424). We further described the
formula we use to calculate the payment
amount for each Billing code in the CY
2006 PFS proposed rule (70 FR 45844)
and final rule with comment period (70
FR 70217) With the enactment of the
MMSEA, the formula we use changed
beginning April 1, 2008. Section 112(a)
of the MMSEA requires us to calculate
payment amounts using a specified
volume-weighting methodology. In
addition, section 112(b) of the MMSEA
sets forth a special rule for determining
the payment amount for certain
inhalation drugs.
For each billing code, we calculate a
volume-weighted, ASP-based payment
amount using the ASP data submitted
by manufacturers. Manufacturers submit
ASP data to us at the 11-digit National
Drug Code (NDC) level, including the
number of units of the 11-digit NDC
sold and the ASP for those units. We
determine the number of billing units in
an NDC based on the amount of drug in
the package. For example: A
manufacturer sells a box of 4 vials of a
drug. Each vial contains 20 milligrams
(mg). The billing code is per 10 MG. The
number of billing units in this NDC for
this billing code is (4 vials × 20 mg)/10
mg = 8 billable units.
Prior to April 1, 2008, we used the
following three-step formula to calculate
the payment amount for each billing
code. First, we converted the
manufacturer’s ASP for each NDC into
the ASP per billing unit by dividing the
manufacturer’s ASP for that NDC by the
number of billing units in that NDC.
Then, we summed the product of the
ASP per billing unit and the number of
units of the 11-digit NDC sold for each
NDC assigned to the billing code. Then,
we divided this total by the sum of the
number of units of the 11-digit NDC
sold for each NDC assigned to the
billing code.
Beginning April 1, 2008, we use a
two-step formula to calculate the
payment amount for each billing code.
We sum the product of the
manufacturer’s ASP and the number of
units of the 11-digit NDC sold for each
NDC assigned to the billing and
payment code, and then divide this total
by the sum of the product of the number
of units of the 11-digit NDC sold and the
number of billing units in that NDC for
each NDC assigned to the billing and
payment code.
Prior to April 1, 2008, manufacturers’
ASP data for smaller and larger package
sizes were given the same weight in our
calculation of the payment amounts;
that is, the ASP for one vial was
weighted the same as the ASP for a box
of 10 vials. For payment amounts in
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effect on or after April 1, 2008,
manufacturers’ ASPs for larger package
sizes have greater impact on the
payment amounts and their ASPs for
smaller package sizes have less; that is,
the ASP for a box of 10 vials is given
10 times the weight of a package
containing a single vial. The payment
allowance limits published on our Web
site for dates of service on or after April
1, 2008 are determined using the new
volume-weighting methodology and
include application of the special
payment rule described in the following
paragraph. (See our Web site at https://
www.cms.hhs.gov/
McrPartBDrugAvgSalesPrice/
01a_2008aspfiles.asp#TopOfPage.)
In addition to the formula change, the
MMSEA established a special payment
rule for certain inhalation drugs
furnished through an item of durable
medical equipment (DME). The
‘‘grandfathering’’ provision in section
1847A(c)(6)(C)(ii) of the Act requires
that certain drugs be treated as multiple
source drugs for purposes of calculating
the payment allowance limits. Section
112(b) of the MMSEA requires that,
effective April 1, 2008, the payment
amount for inhalation drugs furnished
through an item of DME is the lesser of
the amount determined by applying the
grandfathering provision or by not
applying that provision. We reviewed
our payment determinations effective
January 1, 2008 to identify the drugs
subject to this special rule, and
implemented this new requirement in
accordance with the statutory
implementation date of April 1, 2008.
We identified that albuterol and
levalbuterol, in both the unit dose and
concentrated forms, are subject to the
special payment rule. At this time, we
have not identified other inhalation
drugs furnished through an item of DME
to which section 112(b) of the MMSEA
applies.
The provisions in section 112 of the
MMSEA are self-implementing for
services on and after April 1, 2008.
Because of the limited time between
enactment and the implementation date,
it was not practical to undertake and
complete rulemaking on this issue prior
to implementing the required changes.
Inclusion of this topic in this proposed
rule, is our first opportunity to propose
conforming changes to the regulatory
text at § 414.904. We propose to revise
paragraphs (a) and (e) to codify the
changes to the determination of
payment amounts as required by section
112 of the MMSEA. We are soliciting
comments on the proposed regulatory
text that appears elsewhere in this
proposed rule.
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b. Average Manufacturer Price (AMP)/
Widely Available Market Prices
(WAMP)
Section 1847A(d)(1) of the Act states
that ‘‘the Inspector General of HHS shall
conduct studies, which may include
surveys to determine the widely
available market prices (WAMP) of
drugs and biologicals to which this
section applies, as the Inspector
General, in consultation with the
Secretary, determines to be
appropriate.’’ Section 1847A(d)(2) of the
Act states that, ‘‘Based upon such
studies and other data for drugs and
biologicals, the Inspector General shall
compare the ASP under this section for
drugs and biologicals with—
• The WAMP for such drugs and
biologicals (if any); and
• The average manufacturer price
(AMP) (as determined under section
1927(k)(1) of the Act for such drugs and
biologicals.’’
Section 1847A(d)(3)(A) of the Act
states that, ‘‘The Secretary may
disregard the average sales price (ASP)
for a drug or biological that exceeds the
WAMP or the AMP for such drug or
biological by the applicable threshold
percentage (as defined in subparagraph
(B)).’’ The applicable threshold
percentage is specified in section
1847A(d)(3)(B)(i) of the Act as 5 percent
for CY 2005. For CY 2006 and
subsequent years, section
1847A(d)(3)(B)(ii) of the Act establishes
that the applicable threshold percentage
is ‘‘the percentage applied under this
subparagraph subject to such
adjustment as the Secretary may specify
for the WAMP or the AMP, or both.’’ In
CY 2006 through CY 2008, we specified
an applicable threshold percentage of 5
percent for both the WAMP and AMP.
We based this decision on the limited
data available to support a change in the
current threshold percentage.
For CY 2009, we propose to specify an
applicable threshold percentage of 5
percent for the WAMP and the AMP. At
present, the OIG is continuing its
ongoing comparison of both the WAMP
and the AMP. Furthermore, information
on how recent changes to the ASP
weighting methodology may affect the
comparison of WAMP/AMP to ASP is
not available at this time. Since we do
not have data suggesting a more
appropriate level at this time, we
believe that continuing the 5 percent
applicable threshold percentage for both
the WAMP and AMP is appropriate for
CY 2009.
As we noted in the CY 2008 PFS final
rule with comment period (72 FR
66259), we understand that there are
complicated operational issues
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associated with potential payment
substitutions. We will continue to
proceed cautiously in this area and
provide stakeholders, particularly
manufacturers of drugs impacted by
potential price substitutions, with
adequate notice of our intentions
regarding such, including the
opportunity to provide input with
regard to the processes for substituting
the WAMP or the AMP for the ASP. As
part of our approach, we intend to
develop a better understanding of the
issues that may be related to certain
drugs for which the WAMP and AMP
may be lower than the ASP over time.
We welcome comments on our
proposal to continue the applicable
threshold at 5 percent for both the
WAMP and AMP for CY 2009.
2. Competitive Acquisition Program
(CAP) Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘CAP ISSUES’’ at the beginning
of your comments.]
Section 303(d) of the MMA requires
the implementation of a competitive
acquisition program for certain
Medicare Part B drugs not paid on a cost
or prospective payment system basis.
The provisions for acquiring and billing
drugs under the CAP were described in
the Competitive Acquisition of
Outpatient Drugs and Biologicals Under
Part B proposed rule (March 4, 2005, 70
FR 10746) and the interim final rule
(July 6, 2005, 70 FR 39022), and certain
provisions were finalized in the CY
2006 PFS final rule with comment
period (70 FR 70236). The CY 2007 PFS
final rule with comment period (70 FR
66260) then finalized portions of the
July 6, 2005 IFC that had not already
been finalized.
The CAP is an alternative to the ASP
(buy and bill) methodology of obtaining
certain Part B drugs used incident to
physicians’ services. Physicians who
choose to participate in the CAP obtain
drugs from vendors selected through a
competitive bidding process and
approved by CMS. Under the CAP,
physicians agree to obtain all of the
approximately 190 drugs on the CAP
drug list from an approved CAP vendor.
A vendor retains title to the drug until
it is administered, bills Medicare for the
drug, and bills the beneficiary for cost
sharing amount once the drug has been
administered. The physician bills
Medicare only for administering the
drug to the beneficiary. The CAP
currently operates with a single CAP
drug category. CAP claims processing
began on July 1, 2006.
After the CAP was implemented,
section 108 of the MIEA–TRHCA made
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changes to the CAP payment
methodology. Section 108(a)(2) of the
MIEA–TRHCA requires the Secretary to
establish (by program instruction or
otherwise) a post-payment review
process (which may include the use of
statistical sampling) to assure that
payment is made for a drug or biological
only if the drug or biological has been
administered to a beneficiary. The
Secretary is required to recoup, offset, or
collect any overpayments. This statutory
change took effect on April 1, 2007.
Conforming changes were proposed in
the CY 2008 PFS proposed rule (72 FR
38153) and finalized in the CY 2008 PFS
final rule with comment period (72 FR
66260).
In this section, we are proposing
several refinements to the CAP
regarding the annual CAP payment
amount update mechanism, the
definition of a CAP physician, the
restriction on physician transportation
of CAP drugs, and the dispute
resolution process. Our proposed
refinements are based on the operational
experience we have gained since the
implementation of the program and we
believe that they will improve this
relatively new and growing program.
Although we are currently evaluating
bids for CY 2009 through CY 2011
approved CAP vendor contracts, we do
not believe that the proposals in this
rule will conflict with the evaluation of
bids or the performance of the CAP
vendor contracts because we do not
expect these proposals to change the
way payment is made under the CAP, to
significantly change how prospective
vendors are expected to furnish drugs
under the CAP, or to significantly affect
the number of participating CAP
physicians.
a. Annual CAP Payment Amount
Update Mechanism
Payment amounts for drugs furnished
during the first year of an approved CAP
vendor’s contract are set through a
competitive process using bidders’
prices and limited by the ASP based
payment amount. This process was
described in detail in the July 6, 2005
IFC (70 FR 39069 through 39078).
Section 414.906(c) provides for updates
to an approved CAP vendor’s payment
amounts based on the vendor’s
reasonable net acquisition costs (RNAC).
In the July 6, 2005 IFC, we described
a two-step process to recompute the
single price for each drug in the single
drug category if there is a change in the
costs reported by a particular vendor.
We stated that ‘‘we would adjust the bid
price that the vendor originally
submitted by the percentage change
indicated in the cost information that
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the vendor disclosed. Next, we would
recompute the single price for the drug
as the median of all of these adjusted
bid prices’’ (70 FR 39076). The two-step
process contemplated that there would
be more than one approved CAP vendor
at the time prices were to be adjusted
and that no successful bidders would
choose not to participate in the CAP.
However, during the first round of
CAP contracting after offering more than
one contract, we entered a contract with
only one bidder. Thus, during the 2008
price update calculation process, we
developed an approach to account for
the lack of RNAC data for bidders who
chose not to participate in the CAP. We
believe that the approach we used to
adjust prices for the 2008 contract year
is consistent with § 414.906(c) and with
the July 6, 2005 IFC because it retains
a two step calculation based on the
approved CAP vendors’ RNAC, as well
as the calculation of a median of
adjusted bid prices.
This approach was posted on the
Approved CAP Vendor page of the CMS
Web site at https://www.cms.hhs.gov/
CompetitiveAcquisforBios/
15_Approved_Vendor.asp . The percent
change in RNAC for 2008 was
calculated based on data supplied by
the approved CAP vendor. This percent
change in RNAC was used as a proxy for
the percent change in RNAC for
successful bidders that chose not to
become approved CAP vendors.
We are proposing to continue using
this approach for future CAP payment
amount updates where the number of
approved CAP vendors is less than the
number of successful bidders. We
would continue to use the average of the
approved CAP vendor-supplied RNAC
data as a proxy for data from vendors
who bid successfully but are not
participating in the CAP. For example,
if the payment amounts for the first year
of a CAP contract are based on five
successful bidders, but only four have
signed contracts to supply drugs under
the CAP (that is, there are four approved
CAP vendors), only RNAC data
collected from the four approved CAP
vendors would be used to calculate the
percent change in the RNAC. The
average of the four approved CAP
vendors’ adjusted payment amounts
would be used as a proxy for the RNAC
of the successful bidder that is not
participating in the CAP. The updated
CAP payment amount would then be
calculated as the median of the five data
points (one data point for each approved
CAP vendor’s updated payment amount,
and one data point calculated using the
average of the approved CAP vendor’s
RNAC). Similarly, if there were five
successful bidders but only three chose
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to become approved CAP vendors, the
average of the three approved CAP
vendors’ RNAC would be the proxy for
the RNAC of the two bidders who did
not participate. The median of those five
data points would become the updated
CAP payment amount.
We believe this approach would
provide us with a flexible method for
updating CAP prices that is consistent
with our original policy as stated in the
July 6, 2005 IFC, but that accounts for
bidders or approved CAP vendors who
are not participating in the program at
the time the price updates are
calculated. This would include bidders
who choose not to participate at the
beginning of a contract and those who
drop out later. Our proposal clarifies the
approach used to calculate the RNAC
and does not seek to alter the general
approach to the payment calculation
update described in the July 6, 2005 IFC
and existing regulation text. We
welcome comments on this approach.
b. Definition of a CAP Physician
In the July 6, 2005 IFC, we stated that
section 1847B of the Act most closely
describes a system for the provision of
and the payment for drugs provided
incident to a physician’s service (70 FR
39026). In the CY 2006 PFS final rule
with comment period (70 FR 70258), we
stated that for the purposes of the CAP,
a physician includes all practitioners
that meet the definition of a ‘‘physician’’
in section 1861(r) of the Act. This
definition includes doctors of medicine,
osteopathy, dental surgery, dental
medicine, podiatry, and optometry, as
well as chiropractors. However, this
definition does not include other health
care professionals, such as NPs, CNSs,
and other professions such as PAs who
may be able to legally prescribe
medications and enroll in Medicare.
Our 2005 CAP definition was not
intended to exclude these practitioners
who are appropriately billing Medicare
for legally prescribed medications
administered in a capacity that would
be classified as incident to a physician’s
services if the medications were
administered by a physician. We are
concerned that the existing CAP
definition of a physician is
unnecessarily restrictive and could
potentially affect access to the CAP for
a small segment of providers that should
be eligible for participation in the CAP
in situations where they currently bill
Medicare separately and appropriately.
Therefore, we are proposing to further
clarify that, for the purposes of the CAP,
the definition of a physician includes all
practitioners that meet the definition of
a ‘‘physician’’ in section 1861(r) of the
Act, as well as practitioners (such as
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NPs, CNSs and PAs) described in
section 1861(s)(2)(K) of the Act and
other practitioners who legally prescribe
drugs associated with services under
section 1861(s) of the Act if those
services and the associated drugs are
covered when furnished incident to a
physician’s service. While we believe
that most practitioners described in
section 1861(s)(2)(K) of the Act would
bill under specific physician provider
numbers, it is not our intent to exclude
practitioners who are able to bill
independently for drugs associated with
services that are covered when provided
by a physician and legally authorized to
be performed.
Our proposal is specific to the Part B
Drug CAP and does not affect the
definition of physician in section
1861(r) of the Act, or the definition of
Medical and Other Health Services
described in section 1861(s) of the Act.
This proposal also does not seek to
expand the scope of the CAP beyond
what has been described in previous
rules, other than to clarify that a small
number of providers who are enrolled in
Medicare, and who legally prescribe
drugs associated with services under
section 1861(s) of the Act and can be
paid by Medicare may elect to
participate in the CAP if billing
independently. In short, the CAP
remains at this time a program that
provides Part B drugs furnished
incident to a physician’s services.
We anticipate that a small number of
NPs, CNSs, and PAs would be affected
by the implementation of this proposal.
We seek comment on how this
clarification would affect the various
professions that bill Medicare for drugs
furnished incident to services that are
typically provided by a physician. If this
provision is implemented, we believe
that the total number of CAP
participants would not increase by more
than 1 percent, and we seek comment
on level of interest associated with the
implementation of this proposal.
c. Easing the Restriction on Physician
Transport of CAP Drugs Between
Practice Locations
Although section 1847B(b)(4)(E) of the
Act provides for the shipment of CAP
drugs to settings other than a
participating CAP physician’s office
under certain conditions, in initially
implementing the CAP, we did not
propose to implement the CAP in
alternative settings. In the July 6, 2005
IFC (70 FR 39047), we described both
comments that supported the idea of
allowing participating CAP physicians
to transport drugs to multiple office
locations, and comments that raised
concerns about the risk of damaging a
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drug that has not been kept under
appropriate conditions while being
transported. Specifically, one
commenter pointed out that a physician
may have several practice locations. If
the beneficiary should change his or her
site of treatment from the one to which
the vendor originally shipped the drug,
the physician would need an
appropriate way of transporting the
drugs from one location to another.
Some potential vendors stated that,
while drugs were being transported to
an alternate location, spoilage and
breakage could occur. They expressed
concern that because the vendor retains
ownership of the drug until it is
administered to the beneficiary, they
could be held liable if the drug
deteriorates and is administered to the
beneficiary in substandard condition.
Ultimately, we implemented the CAP
with a restriction that CAP drugs be
shipped directly to the participating
CAP physician, as stated in
§ 414.906(a)(4), and that participating
CAP physicians may not transport CAP
drugs from one location to another, as
stated in § 414.908(a)(3)(xii).
However, we were aware that
physicians may desire to administer
drugs in alternative settings. Therefore,
in the July 6, 2005 IFC, we sought
comment on how this could be
accommodated under the CAP in a way
that addresses the potential vendors’
concerns about product integrity and
damage to the approved CAP vendors’
property (70 FR 39048). We discussed
comments submitted in response to the
July 6, 2005 IFC in the CY 2008 PFS
proposed rule (72 FR 38158). Several
comments suggested either easing or
removing the restriction on transporting
drugs to other locations. Commenters
believed that physicians, particularly
those who specialize in oncology, and
their staff are knowledgeable about drug
stability and handling, and therefore,
were capable of assuming this
responsibility. Other commenters
indicated that transporting the drug to
another office location may allow for
flexibility in scheduling patient visits.
We also received several comments
discussing the impact of CAP delivery
times on rural clinics and offices with
satellite locations. Many of these
responses discussed how easing the
restriction on transporting CAP drugs
between locations would be welcome in
rural areas and for satellite offices with
limited hours where personnel may not
always be available to receive CAP drug
shipments.
We also requested comments in the
CY 2008 PFS proposed rule (72 FR
38157) on the potential feasibility of
easing the restriction on transporting
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CAP drugs where this is permitted by
State law and other applicable laws and
regulations. We asked commenters to
consider how such a policy could be
constructed so that the approved CAP
vendor could retain control over how
the drugs that it owns are handled. We
also requested comments on other
issues that we should take into account
concerning transportation of CAP drugs
between the practice locations listed on
a physician’s CAP election agreement
form. Additionally, we also solicited
comments on the following areas for
consideration in the possible
development of future proposals:
• How to structure requirements so
that drugs are not subjected to
conditions that will jeopardize their
integrity, stability or sterility while
being transported, and steps to keep
transportation activities consistent with
all applicable laws and regulations;
• Whether any agreement allowing
participating CAP physicians to
transport CAP drugs to alternate
practice locations should be voluntary.
This means that approved CAP vendors
would not be required to offer such an
agreement and physicians who
participate in the CAP would not be
required to accept such an offer; and
• Whether such an agreement should
be documented in writing, and whether
it is necessary to create any restrictions
on which CAP drugs could be
transported.
We responded to submitted comments
in the CY 2008 PFS final rule with
comment period (72 FR 66268). Several
comments supported the concept of
easing the restriction on transporting
CAP drugs if this could be done safely,
and if changes were consistent with
applicable rules, regulations, and within
the limitations of product stability and
integrity. The restriction on transporting
CAP drugs was perceived as a barrier to
physician participation in the program.
One commenter stated that elimination
of the restriction would result in the
same flexibility as the ASP (buy and
bill) method of acquiring drugs. Another
commenter expressed a strong desire to
implement these changes promptly.
A few commenters also cautioned us
to implement appropriate safeguards if
we chose to ease the transportation
restriction. One commenter asked that
the safeguards be available for public
scrutiny before they are implemented.
Conversely, other commenters stated
that the risk of damage to CAP drugs
would be minimal since a physician and
his or her staff are knowledgeable about
a given drug’s stability, handling, and
transportation requirements.
We are mindful of the concerns
expressed by the commenters and are
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now proposing to permit transport of
CAP drug between a participating CAP
physician’s practice locations subject to
voluntary agreements between the
approved CAP vendor and the
participating CAP physician. We
propose that such agreements must
comply with all applicable State and
Federal laws and regulations and
product liability requirements, and be
documented in writing.
We would like to reiterate the
voluntary nature of these proposed
agreements. Approved CAP vendors
would not be required to offer and
participating CAP physicians would not
be required to accept such agreements
when selecting an approved CAP
vendor. An approved CAP vendor may
not refuse to do business with a
participating CAP physician because the
participating CAP physician has
declined to enter into such an
agreement with the approved CAP
vendor. Furthermore, we are not seeking
to define which CAP drugs may be
subject to the proposed voluntary
agreements. In other words, each
approved CAP vendor could specify
which CAP drug(s) could be
transported.
However, our proposal contains
certain limitations. In previous
rulemaking, we have described
requirements for voluntary agreements
between approved CAP vendors and
participating CAP physicians. In the
July 6, 2005 IFC (70 FR 39050) and the
CY 2006 PFS final rule (70 FR 70251
through 70252), we stated that we will
not dictate the breadth of use or the
specific obligations contained in
voluntary arrangements between
approved CAP vendors and physicians,
other than to note that they must
comply with applicable law and to
prohibit approved CAP vendors from
coercing participating CAP physicians
into entering any of these arrangements.
Parties to such arrangements must also
ensure that the arrangements do not
violate the physician self-referral
(‘‘Stark’’) prohibition (section 1877 of
the Act), the Federal anti-kickback
statute (section 1128B(b) of the Act), or
any other Federal or State law or
regulation governing billing or claims
submission. We propose to apply these
standards to any agreement for the
transport of CAP drugs.
We are also particularly concerned
about opportunities for disruption in the
drug’s chain of custody and appropriate
storage and handling conditions that
may ultimately affect patient care or
increase the risk of drug theft or
diversion. Therefore, in order to
maintain safety and drug integrity in the
CAP and to protect against the
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fraudulent diversion of CAP drugs, we
propose that any voluntary agreements
between an approved CAP vendor and
a participating CAP physician regarding
the transportation of CAP drug must
include requirements that drugs are not
subjected to conditions that will
jeopardize their integrity, stability, and/
or sterility while being transported. We
welcome comments on these issues,
including the identification who may
transport the drugs, how documentation
of transportation activities could be
accomplished, and how the oversight of
such agreements will be carried out.
In conclusion, we believe that this
proposal to ease the restriction on
transporting CAP drugs between a
participating CAP physician’s practice
locations—when agreed upon by the
participating CAP physician and the
approved CAP vendor—will make the
CAP more flexible and ultimately more
appealing to participating CAP
physicians. Additionally, we believe
that this proposal will facilitate the
participation of CAP physicians who
have office locations in rural areas and/
or have satellite offices with limited
hours. Moreover, we believe that this
proposal will promote beneficiary care,
particularly for beneficiaries who live in
rural locations. Since physicians would
be able to transport CAP drugs to
another office location in accordance
with a voluntary agreement with their
approved CAP vendor, beneficiaries
would have more flexibility in
scheduling the location of their
appointments. We invite comments
about this proposal.
d. Dispute Resolution Process
Section 1847B of the Act is generally
silent with regard to the treatment of
disputes surrounding the delivery of
drugs and the denial of drug claims.
However, section 1847B(b)(2)(A)(ii)(II)
of the Act does contain a reference to a
grievance process that is included
among the quality and service
requirements that must be met by
approved CAP vendors. In the July 6,
2005 IFC (70 FR 39054 through 39058),
we described the process for the
resolution of participating CAP
physicians’ drug quality and service
complaints and vendors’ complaints
regarding noncompliant participating
CAP physicians. We encouraged
participating CAP physicians,
beneficiaries, and vendors to use
informal communication as a first step
to resolve service-related administration
issues. However, we recognized that
certain disputes would require a more
structured approach, and therefore, we
established processes under § 414.916
and § 414.917.
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1. Termination of CAP Drug Shipments
to Suspended CAP Physicians
Section 414.916 provides a
mechanism for approved CAP vendors
to address noncompliance problems
with CAP physicians. As stated at
§ 414.916(a), ‘‘Cases of an approved CAP
vendor’s dissatisfaction with denied
drug claims are resolved through a
voluntary alternative dispute resolution
process delivered by the designated
carrier, and a reconsideration process
provided by CMS.’’ Once the decision is
made to suspend a participating CAP
physician’s CAP election agreement, the
participating CAP physician will be
suspended from the CAP as described in
§ 414.916(b)(3).
Physicians whose participation in the
CAP has been suspended are not eligible
to receive CAP drugs. This is implied in
§ 414.906(a)(4), which speaks of
approved CAP vendors providing CAP
drugs directly to ‘‘[a] participating CAP
physician.’’ However, we believe that
the clarity of our dispute resolution
regulations would be improved if this
drug delivery issue were stated
explicitly. Therefore, we are proposing
to revise § 414.916 to specify that
approved CAP vendors shall not deliver
CAP drugs to participating CAP
physicians whose participation in the
CAP has suspended after an initial
determination by CMS. This suspension
in drug shipment would also apply to
physicians engaged in the
reconsideration process outlined in
§ 414.916(c). We are also making a
conforming change in the regulation text
in § 414.914(f)(12). These changes are in
accord with the underlying intent of
§ 414.916, namely to provide a
mechanism for vendors to address
noncompliance problems with CAP
physicians, and we believe that these
changes will increase the clarity of our
regulations. We note that the
participating CAP physicians who are
suspended from participation in the
CAP will be able to obtain drugs and bill
for them under the ASP payment system
provided they have not been excluded
from participation in Medicare and/or
their billing privileges have not been
revoked. We welcome comments about
this proposal.
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2. Approved CAP Vendor’s Status
During the Reconsideration Process
Section 414.917 pertains to the
dispute resolution process for
participating CAP physicians. As
discussed in the July 6, 2005 IFC (70 FR
39057 through 39058), if a physician
finds an approved CAP vendor’s service
or the quality of a CAP drug supplied
by the approved CAP vendor to be
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unsatisfactory, then the physician may
address the issues first through the
approved CAP vendor’s grievance
process, and second through an
alternative dispute resolution process
administered by the designated carrier
and CMS. In turn, the designated carrier
would gather information about the
issue as outlined in § 414.917(b)(2) and
make a recommendation to CMS on
whether the approved CAP vendor has
been meeting the service and quality
obligations of its CAP contract. We
would then review and act on that
recommendation after gathering any
necessary, additional information from
the participating CAP physician and
approved CAP vendor. If we suspend an
approved CAP vendor’s CAP contract
for noncompliance or terminate the CAP
contract in accordance with
§ 414.914(a), the approved CAP vendor
may request a reconsideration in
accordance with § 414.917(c).
In the July 6, 2005 IFC (70 FR 39058),
we indicated that the approved CAP
vendor’s participation in the CAP would
be suspended while the approved CAP
vendor’s appeal of our decision is
pending. This suspended status is also
implied in § 414.917(c)(9), which states
that the ‘‘approved CAP vendor may
resume participation in CAP’’ if the
final reconsideration determination is
favorable to the approved CAP vendor.
In order to improve the clarity of our
regulations, we propose to indicate that
the approved CAP vendor’s contract
will remain suspended during the
reconsideration period in § 414.917. We
believe this proposed technical change
is consistent with basic contracting
concepts and with our current practices
for the CAP. We invite comments
regarding this proposed clarification.
G. Application of the HPSA Bonus
Payment
[If you choose to comment on issues
in this section, please include the
caption ‘‘HPSA BONUS PAYMENT’’ at
the beginning of your comments.]
Section 1833(m) of the Act provides
for an additional 10 percent bonus
payment for physicians’ services
furnished in a year to a covered
individual in an area that is designated
as a geographic Health Professional
Shortage Area (HPSA) as identified by
the Secretary prior to the beginning of
such year. The statute indicates that the
HPSA bonus payment will be made for
services furnished during a year in areas
that have been designated as HPSAs
prior to the beginning of that year. As
a result, the HPSA bonus payment is
made for physicians’ services furnished
in an area designated as of December 31
of the prior year, even if the area’s
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HPSA designation is removed during
the current year. However, for
physicians’ services furnished in areas
that are designated as geographic HPSAs
after the beginning of a year, the HPSA
bonus payment is not made until the
following year, if the area is still
designated as of December 31 of that
year.
In the CY 2005 PFS final rule with
comment period (69 FR 66297), we
stated that determination of zip codes
for automatic HPSA bonus payment will
be made on an annual basis and that
there would be no updates to the zip
code file during the year. We also stated
that physicians furnishing covered
services in ‘‘newly designated’’ HPSAs
may add a modifier to their Medicare
claims to collect the HPSA bonus
payment until our next annual posting
of zip codes for which automatic
payment of the bonus will be made.
In § 414.67, we are proposing to revise
our regulations to clarify that physicians
who furnish services in areas that are
designated as geographic HPSAs as of
December 31 of the prior year but not
included on the list of zip codes for
automated HPSA bonus payments
should use the AQ modifier to receive
the HPSA bonus payment.
H. Provisions Related to Payment for
Renal Dialysis Services Furnished by
End-Stage Renal Disease (ESRD)
Facilities
[If you choose to comment on issues
in this section, please include the
caption ‘‘ESRD PROVISIONS’’ at the
beginning of your comments.]
Since August 1, 1983, payment for
dialysis services furnished by end-stage
renal disease (ESRD) facilities has been
based on a composite rate payment
system that provides a fixed,
prospectively determined amount per
dialysis treatment, adjusted for
geographic differences in area wage
levels. In accordance with section
1881(b)(7) of the Act, separate
composite rates have been established
for hospital-based and independent
ESRD facilities. The composite rate is
designed to cover a package of goods
and services needed to furnish dialysis
treatments that include, but not be
limited to, certain routinely provided
drugs, laboratory tests, supplies, and
equipment. Unless specifically included
in the composite rate, other injectable
drugs and laboratory tests medically
necessary for the care of the dialysis
patient are separately billable. Effective
on August 1, 1983, the base composite
rates per treatment were $123 for
independent ESRD facilities and $127
for hospital-based ESRD facilities. The
Congress has enacted a number of
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adjustments to the composite rate since
that time. The current 2008 base
composite rates are $132.49 for
independent ESRD facilities and
$136.68 for hospital-based ESRD
facilities.
Section 623 of the MMA amended
section 1881 of the Act to require
changes to the composite rate payment
methodology, as well as to the pricing
methodology for separately billable
drugs and biologicals furnished by
ESRD facilities.
Section 1881(b)(12) of the Act, as
added by the MMA, requires the
establishment of a basic case-mix
adjusted prospective payment system
(PPS) that include services comprising
the composite rate and an add-on to the
composite rate component for the
difference between current payments for
separately billed drugs and the revised
drug pricing specified in the statute. In
addition, section 1881(b)(12) of the Act
requires that the composite rate be
adjusted for a number of patient
characteristics (case-mix) and section
1881(b)(12)(D) of the Act gives the
Secretary discretion to revise the wage
indices and the urban and rural
definitions used to develop them.
Finally, section 1881(b)(12)(E) of the Act
imposes a budget neutrality (BN)
adjustment, so that aggregate payments
under the basic case-mix adjusted
composite payment system for CY 2005
equals the aggregate payments for the
same period if section 1881(b)(12) of the
Act does not apply.
Before January 1, 2005, payment to
both independent and hospital-based
facilities for the anti-anemia drug,
erythropoietin (EPO) was established
under section 1881(b)(11) of the Act at
$10.00 per 1,000 units. For independent
ESRD facilities, payment for all other
separately billable drugs and biologicals
are based on the lower of actual charges
or 95 percent of the average wholesale
price (AWP). Hospital-based ESRD
facilities were paid based on the
reasonable cost methodology for
separately billed drugs and biologicals
(other than EPO) furnished to dialysis
patients. Changes to the payment
methodology for separately billed ESRD
drugs and biologicals that were
established by the MMA effective
January 1, 2005, are described in
sections II.H.1. and II.H.2. These
changes affected payments in both CY
2005 and CY 2006.
In addition, section 623(f)(1) of the
MMA directs the Secretary to submit a
Report to Congress detailing the
elements and features for the design and
implementation of a bundled PPS for
services furnished by ESRD facilities to
Medicare beneficiaries. This bundled
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PPS is a different way of payment for
ESRD services since it includes not only
composite rate services, but could also
include separately billable drugs
(including EPO), laboratory tests, and
other separately billable items into one
PPS payment rate. The Report to
Congress was released February 20,
2008.
1. CY 2005 Revisions
In the CY 2005 PFS final rule with
comment period (69 FR 66319 through
66334), we implemented section 1881(b)
of the Act, as amended by section 623
of the MMA, and revised payments to
ESRD facilities. These revisions were
effective January 1, 2005, and included
implementation of a case-mix adjusted
payment system that incorporated
services that comprise the composite
rate; an update of 1.6 percent to the
composite rate component of the
payment system; and a drug add-on
adjustment of 8.7 percent to the
composite rate to account for the
difference between pre-MMA payments
for separately billable drugs and
payments based on revised drug pricing
for 2005 which used acquisition costs.
Effective April 1, 2005, the CY 2005 PFS
final rule with comment period also
implemented case-mix adjustments to
the composite rate for certain patient
characteristics (that is, age, low body
mass index, and body surface area).
In addition, to implement section
1881(b)(13) of the Act, we revised
payments for drugs billed separately by
independent ESRD facilities, paying for
the top 10 ESRD drugs based on
acquisition costs (as determined by the
OIG) and for other separately billed
drugs at the average sales price +6
percent (hereafter referred to as ASP+6
percent). Hospital-based ESRD facilities
continued to receive cost-based
payments for all separately billable
drugs and biologicals except for EPO
which was paid based on average
acquisition costs.
2. CY 2006 Revisions
In the CY 2006 PFS final rule with
comment period (70 FR 70161), we
implemented additional revisions to
payments to ESRD facilities under
section 623 of the MMA. For CY 2006,
we further revised the drug payment
methodology applicable to drugs
furnished by ESRD facilities. All
separately billed drugs and biologicals
furnished by both hospital-based and
independent ESRD facilities are now
paid based on ASP+6 percent.
We recalculated the 2005 drug add-on
adjustment to reflect the difference in
payments between the pre-MMA AWP
pricing and the revised pricing based on
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ASP+6 percent. The recalculation did
not affect the actual add-on adjustment
applied to payments in 2005, but
provided an estimate of what the
adjustment would have been had the
2006 payment methodology been in
effect in CY 2005. The drug add-on
adjustment was then updated to reflect
the expected growth in expenditures for
separately billable drugs in CY 2006.
As of January 1, 2006, we also
implemented a revised geographic
adjustment authorized by section
1881(b)(12) of the Act. As part of that
change, we—
• Revised the labor market areas to
incorporate the Core-Based Statistical
Area (CBSA) designations established
by the Office of Management and
Budget (OMB);
• Eliminated the wage index ceiling
and reduced the floor to 0.8500; and
• Revised the labor portion of the
composite rate to which the geographic
adjustment is applied.
We also provided a 4-year transition
from the previous wage-adjusted
composite rates to the current wageadjusted rates. For CY 2006, 25 percent
of the payment is based on the revised
geographic adjustments, and the
remaining 75 percent of payment is
based on the old metropolitan statistical
area-based (MSA-based) payments.
In addition, section 5106 of the DRA
provided for a 1.6 percent update to the
composite rate component of the basic
case-mix adjusted payment system,
effective January 1, 2006. As a result,
the base composite rate was increased to
$130.40 for independent ESRD facilities
and $134.53 for hospital-based facilities.
For 2006, the drug add-on adjustment
(including the growth update) was 14.5
percent.
3. CY 2007 Updates
In the CY 2007 PFS final rule with
comment period (71 FR 69681), we
implemented the following updates to
the basic case-mix adjusted payment
system:
• An update to the wage index
adjustments to reflect the latest hospital
wage data, including a BN adjustment of
1.052818 to the wage index for CY 2007.
• A method to annually calculate the
growth update to the drug add-on
adjustment required by section
1881(b)(12) of the Act, as well as a
growth update to the drug add-on
adjustment of 0.5 percent for CY 2007.
Therefore, effective January 1, 2007 the
drug add-on adjustment was increased
to 15.1 percent.
In addition, section 103 of the MIEA–
TRHCA established a 1.6 percent update
to the composite rate portion of the
payment system, effective April 1, 2007.
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Therefore, the current base composite
rate is $132.49 for independent facilities
and $136.68 for hospital-based facilities.
Also, the effect of this increase in the
composite rate portion of the payment
system was a reduction in the drug addon adjustment to 14.9 percent, effective
April 1, 2007. Since the statutory
increase only applied to the composite
rate, this adjustment to the drug add-on
percent was needed to maintain the
drug add-on amount constant.
4. CY 2008 Updates
In the CY 2008 PFS final rule with
comment period (72 FR 66280), we
implemented the following updates to
the basic case-mix adjusted payment
system:
• A growth update to the drug add-on
adjustment of 0.5 percent. As a result,
the drug add-on adjustment to the
composite payment rate increased from
14.9 percent to 15.5 percent.
• An update to the wage index
adjustments to reflect the latest hospital
wage data, including a BN adjustment of
1.055473 to the wage index for CY 2008.
For CY 2008, consistent with the
transition blends announced in the CY
2006 PFS final rule with comment
period (70 FR 70170), we implemented
the third year of the transition to the
CBSA-based wage index. In addition,
the wage index floor was reduced from
0.8000 to 0.7500. After applying a BN
adjustment of 1.055473, the wage index
floor was 0.7916.
5. Provisions of This Proposed Rule
For CY 2009, we are proposing the
following updates to the composite rate
payment system:
• A growth update to the drug add-on
adjustment to the composite rates;
• An update to the wage index
adjustment to reflect the latest available
wage data, including a revised BN
adjustment;
• The completion of the 4-year
transition from the previous wageadjusted composite rates to the CBSA
wage-adjusted rates, where payment
will be based on 100 percent of the
revised geographic adjustments; and
• A reduction of the wage index floor
from 0.7500 to 0.7000.
sroberts on PROD1PC70 with PROPOSALS
a. Proposed Growth Update to the Drug
Add-on Adjustment to the Composite
Rates
Section 623(d) of the MMA added
section 1881(b)(12)(B)(ii) of the Act
which requires establishing an add-on
to the composite rate to account for
changes in the drug payment
methodology stemming from enactment
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of the MMA. Section 1881(b)(12)(c) of
the Act provides that the drug add-on
must reflect the difference in aggregate
payments between the revised drug
payment methodology for separately
billable ESRD drugs and the AWP
payment methodology. In 2005, we
generally paid for ESRD drugs based on
average acquisition costs. Thus the
difference from AWP pricing was
calculated using acquisition costs.
However, in 2006 when we moved to
ASP pricing for ESRD drugs, we
recalculated the difference from AWP
pricing using ASP prices.
In addition, section 1881(b)(12)(F) of
the Act requires that, beginning in CY
2006, we establish an annual update to
the drug add-on to reflect estimated
growth in expenditures for separately
billable drugs and biologicals furnished
by ESRD facilities. This growth update
applies only to the drug add-on portion
of the case-mix adjusted payment
system.
The CY 2008 drug add-on adjustment
to the composite rate is 15.5 percent.
The drug add-on adjustment for CY
2008 incorporates an inflation
adjustment of 0.5 percent. This
computation is explained in detail in
the CY 2008 PFS final rule with
comment period (72 FR 66280 through
66282).
(i) Estimating Growth in Expenditures
for Drugs and Biologicals for CY 2009
Section 1881(b)(12)(F) of the Act
specifies that the drug add-on update
must reflect ‘‘the estimated growth in
expenditures for drugs and biologicals
(including erythropoietin) that are
separately billable * * *’’ By referring
to ‘‘expenditures’’, we stated previously
that we believe the statute contemplates
that the update would account for both
increases in drug prices, as well as
increases in utilization of those drugs.
In the CY 2007 PFS final rule with
comment period (71 FR 69682), we
established an interim methodology for
annually estimating the growth in ESRD
drugs and biological expenditures that
uses the Producer Price Index (PPI) for
pharmaceuticals as a proxy for pricing
growth in conjunction with 2 years of
ESRD drug data to estimate per patient
utilization growth. We indicated that
this methodology would be used to
update the drug add-on to the composite
rate until such time that we had
sufficient ESRD drug expenditure data
to project the growth in ESRD drug
expenditure beginning in CY 2010.
However, upon further
contemplation, we believe that a better
interpretation of the statutory reference
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38527
to growth in expenditures contemplates
that we would consider any change in
drug pricing or utilization, not only
increases, as we develop the update to
the drug add-on adjustment. We have
completed an analysis of ASP prices for
ESRD drugs from 2006 through 2008,
which shows a declining trend in ASP
pricing for ESRD drugs. Accordingly, we
are concerned that the use of the PPI as
a proxy for ESRD drug pricing growth
may no longer be appropriate. This is
because the PPI is a general measure for
all drugs and does not reflect price
changes specific to ESRD drugs. We
continue to lack sufficient expenditure
data for trend analysis purposes. Given
that we do have sufficient ASP pricing
information on ESRD drug prices to
establish a price forecast specific to
ESRD drugs, and since this forecast is
based on actual ESRD drug pricing data,
we believe it is a more accurate measure
of the price component changes for
purposes of estimating the growth in
total expenditures for ESRD drugs for
2009. Accordingly, for CY 2009, we
propose revising the interim
methodology for estimating the growth
in ESRD drug expenditures by using
ASP pricing to estimate the price
component of the update calculation.
As detailed below in this section, we
are proposing for CY 2009 to estimate
price growth using historical ASP
pricing data for ESRD drugs for CY 2006
through CY 2008 and to estimate growth
in per patient utilization of drugs by
using ESRD facility historical drug
expenditure data for CY 2006 and CY
2007.
(ii) Estimating Growth in ESRD Drug
Prices
To estimate price growth we used
ASP pricing data for the four quarters of
2006 and 2007, and the two available
quarters of 2008. We anticipate having
at least three quarters of 2008 data
available in time for the final rule. We
calculated the weighted price change,
for the original top ten ESRD drugs for
which we had acquisition pricing, plus
Aranesp. Tables 4 and 5 show the
average ASP drug prices and the 2007
weights used. In CY 2006 and CY 2007
we calculated a weighted average price
reduction of 1.8 percent. We also
calculated a weighted average price
reduction of 2.1 percent between CY
2007 and CY 2008. The overall average
price reduction is 1.9 percent over the
3-year period, thus, the proposed
weighted average ESRD drug pricing
change projected for CY 2009 is a
reduction of 1.9 percent.
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TABLE 4.—CY 2006, 2007 AND 2008 ESRD DRUG ASP PRICES
Independent drugs
2006
EPO ...........................................................................................................................................................................
Paricalcitol ..................................................................................................................................................................
Sodium-ferric-glut .......................................................................................................................................................
Iron-sucrose ...............................................................................................................................................................
Levocarnitine ..............................................................................................................................................................
Doxercalciferol ...........................................................................................................................................................
Calcitriol .....................................................................................................................................................................
Iron-dextran ................................................................................................................................................................
Vancomycin ...............................................................................................................................................................
Alteplase ....................................................................................................................................................................
Aranesp ......................................................................................................................................................................
TABLE 5.—CY 2007 DRUG WEIGHTS
FOR ESRD FACILITIES
Independent drugs
2007 weights
(percent)
EPO ......................................
Paricalcitol ............................
Sodium-ferric-glut .................
Iron-sucrose ..........................
Levocarnitine ........................
Doxercalciferol ......................
Calcitriol ................................
Iron-dextran ..........................
Vancomycin ..........................
Alteplase ...............................
Aranesp ................................
69.5
11.7
2.5
6.1
0.2
2.8
0.1
0.0
0.1
1.0
6.0
sroberts on PROD1PC70 with PROPOSALS
(iii) Estimating Growth in Per Patient
Drug Utilization
To isolate and project the growth in
per patient utilization of ESRD drugs for
CY 2009, we must remove the
enrollment and price growth
components from the historical drug
expenditure data and consider the
residual utilization growth. As
discussed previously in this section, we
propose to use ESRD facility drug
expenditure data from CY 2006 and CY
2007 to estimate per patient utilization
growth for CY 2009.
First we had to estimate the total drug
expenditures for all ESRD facilities. For
this proposed rule, we used the final CY
2006 ESRD claims data and the latest
available CY 2007 ESRD facility claims,
updated through December 31, 2007
(that is, claims with dates of service
from January 1 through December 31,
2007, that were received, processed,
paid, and passed to the National Claims
History File as of December 31, 2007).
For the CY 2009 PFS final rule, we plan
to use additional updated CY 2007
claims with dates of service for the same
time period. This updated CY 2007 data
file will include claims received,
processed, paid, and passed to the
National Claims History File as of June
30, 2008.
While the December 2007 update of
CY 2007 claims used in this proposed
rule is the most current available claims
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Jkt 214001
data, we recognize that it does not
reflect a complete year, as claims with
dates of service towards the end of the
year have not all been processed. To
more accurately estimate the update to
the drug add-on, aggregate drug
expenditures are required. Based on an
analysis of the 2006 claims data, we
inflated the CY 2007 drug expenditures
to estimate the June 30, 2008 update of
the 2007 claims file. We used the
relationship between the December
2006 and the June 2007 versions of 2006
claims to estimate the more complete
2007 claims available in June 2008 and
applied that ratio to the 2007 claims
data from the December 2007 claims
file. We did this separately for EPO, the
other top 10 separately billable drugs,
and the remaining separately billable
drugs for independent and hospitalbased ESRD facilities. We are using the
top 11 drugs since they represent 99.7
percent of total expenditures in CY 2007
for separately billable drugs furnished to
ESRD patients. All components were
then combined to estimate aggregate CY
2007 ESRD drug expenditures. The net
adjustment to the CY 2007 claims data
was an increase of 12.6 percent to the
2007 expenditure data. This adjustment
allows us to more accurately compare
the 2006 and 2007 data to estimate
utilization growth.
The next step is to remove the
enrollment and price growth
components from that total. As
discussed previously in this section, in
developing the per patient utilization
growth for this proposed rule, we
limited our analysis to the latest 2 years
of available ESRD facility drug data (that
is, 2006 and 2007). We believe that per
patient utilization growth between these
years would be a better proxy for future
growth, as it best represents current
utilization trends.
To calculate the per patient utilization
growth, we removed the enrollment
component by using the growth in
enrollment data between CY 2006 and
CY 2007. This was approximately 3
percent. To remove the price effect we
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9.46
3.81
4.88
0.36
9.44
2.97
0.55
11.94
3.23
31.63
3.01
2007
9.17
3.79
4.76
0.37
8.07
2.68
0.54
11.69
3.43
33.21
3.29
2008
9.02
3.86
4.82
0.36
5.81
2.60
0.38
11.61
3.29
33.28
2.83
used the calculated weighted change
between CY 2006 and CY 2007 ASP
pricing for the top eleven ESRD drugs.
We weighted the differences using 2007
ESRD facility drug expenditure data.
Table 4 shows the CY 2007 weights for
each of the top eleven ESRD drugs
billed by ESRD facilities.
This process led to an overall 1.8
percent reduction in price between CY
2006 and CY 2007.
After removing the enrollment and
price effects from the expenditure data,
the residual growth would reflect the
per patient utilization growth. To do
this, we divided the product of the
enrollment growth of 3 percent (1.03)
and the price reduction of 1.8 percent
(1.00 ¥ 0.018 = 0.982) into the total
drug expenditure change between 2006
and 2007 of 0 percent (1.00 ¥ 0.00 =
1.00). The result is a utilization factor
equal to 0.99 (1.00/(1.03 * 0.982) =
0.99).
Since we observed a 1 percent drop in
per patient utilization of drugs between
2006 and 2007, we are projecting a 1
percent drop in per patient utilization
for ESRD facilities in CY 2009.
b. Applying the Proposed Growth
Update to the Drug Add-on Adjustment
In CY 2006, we applied the projected
growth update percentage to the total
amount of drug add-on dollars
established for CY 2005 to establish a
dollar amount for the CY 2006 growth
update. In addition, we projected the
growth in dialysis treatments for CY
2006 based on the projected growth in
ESRD enrollment. We divided the
projected total dialysis treatments for
CY 2006 into the projected dollar
amount of the CY 2006 growth to
develop the per treatment growth
update amount. This growth update
amount, combined with the CY 2005 per
treatment drug add-on amount, resulted
in an average drug add-on amount per
treatment of $18.88 (or a 14.5 percent
adjustment to the composite rate) for CY
2006.
In the CY 2007 PFS final rule with
comment period (71 FR 69684), we
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sroberts on PROD1PC70 with PROPOSALS
revised our update methodology by
applying the growth update to the per
treatment drug add-on amount. That is,
for CY 2007, we applied the growth
update factor of 4.03 percent to the
$18.88 per treatment drug add-on
amount for an updated amount of
$19.64 per treatment (71 FR 69684). For
CY 2008, the per treatment drug add-on
amount was updated to $20.33.
As discussed in detail below, for CY
2009, we are proposing no update to the
per treatment drug add-on amount of
$20.33 established in CY 2008.
c. Proposed Update to the Drug Add-on
Adjustment
As discussed previously in this
section, we estimate a 1 percent
reduction in per patient utilization of
ESRD drugs for CY 2009. Also, using
historical ESRD drug pricing data
specific to ESRD drugs, we project a 1.9
percent reduction in ESRD drug prices
for CY 2009. To compute this estimate,
we used ASP pricing data for the four
quarters of 2006 and 2007, and the two
available quarters of 2008. We
calculated the weighted price change for
the top ten ESRD drugs plus Aranesp
over the period. Tables 4 and 5 show the
average ASP drug prices and the 2007
weights used. As shown in Table 4, to
the extent there were price changes
during the trending period, increases as
well as decreases have been reflected in
the overall weighted average price
reduction of 1.9 percent over the 3-year
period. Had we continued to use the PPI
for prescription drugs in our
computation of the drug add-on update,
the price component would have been
a projected increase of 3.8 percent.
Given the observed decline in ASP
pricing for ESRD drugs, we believe the
continued use of the PPI as a price
proxy would have significantly
overstated the price component of our
computation of the projected change in
per patient ESRD drug expenditures for
CY 2009. This is because the PPI is a
more general measure of price change
for all drugs and does not reflect price
changes specific to the drugs provided
by ESRD facilities.
Therefore, we are projecting that the
combined growth in per patient
utilization and pricing for CY 2009
would result in a negative update equal
to ¥2.9 percent. (0.99 * 0.981 = 0.971).
However, as indicated above, we are
proposing no update to the drug add-on
adjustment.
We believe this approach is consistent
with the language under section
1881(b)(12)(F) of the Act which states in
part that ‘‘the Secretary shall annually
increase’’ the drug add-on amount based
on the growth in expenditures for
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Jkt 214001
separately billed ESRD drugs. Our
understanding of the statute
contemplates ‘‘annually increase’’ to
mean a positive or zero update to the
drug add-on. Therefore, we propose to
apply a zero update and to maintain the
$20.33 per treatment drug add-on
amount for CY 2009 that reflects a
proposed 15.5 percent drug add-on
adjustment to the composite rate for CY
2009.
However, we also believe that an
alternative reading of the statute is
possible. We believe that the Congress
may not have intended to provide an
increase in the drug add-on adjustment
in a year where the projected growth in
expenditures for separately billable
ESRD drugs is declining. There is
potentially a gap in the statute, which
specifies an ‘‘increase’’ to the drug addon adjustment based upon the
‘‘estimated growth in expenditures for
drugs and biologicals’’ that are
separately billed ESRD drugs. However,
an ‘‘increase’’ cannot be implemented
when estimated ‘‘growth’’ is negative.
To resolve this seeming contradiction,
another approach to the zero percent
update that we are proposing would be
to apply an adjustment of less than 1.0
to the drug add-on adjustment. Under
this approach, for CY 2009, we would
‘‘increase’’ the drug add-on adjustment
by 0.971. Applying the 0.971 increase to
the $20.33 per treatment adjustment
would yield a drug add-on amount of
$19.74 per treatment, which represents
a 0.4 percent decrease in the CY 2008
drug add-on percentage of 15.5 percent.
As such, the proposed drug add-on
adjustment to the composite rate for CY
2009 would be 15.0 percent.
We are seeking public comment on
our proposal of a zero update, as well
as the alternative approach presented
above, so that we can make an informed
decision with respect to the final update
to the CY 2009 drug add-on adjustment
to the composite rate.
Had we selected the other option of
continuing to use the PPI for
prescription drugs as a proxy for ESRD
drug prices instead of using ASP pricing
data, the resulting update factor would
have been a 2.6 percent increase to the
CY 2008 average per treatment drug
add-on amount of $20.33, resulting in a
weighted average increase to the
composite rate of $0.57 or a 0.4 percent
increase in the CY 2008 drug add-on
percentage of 15.5 percent. As discussed
above, however, we believe the PPI
overstates the changes in ESRD drug
prices given the observed trend in
declining prices for those drugs over the
past several years.
We note that for the CY 2010 update
to the drug add-on adjustment we
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38529
expect to estimate the growth in ESRD
drug expenditures using 3 years’ worth
of ASP-based historical ESRD drug
expenditure data that will be available
at that time. This data will be used to
conduct a trend analysis to estimate the
growth in ESRD drug expenditures for
CY 2010. As we discussed earlier with
respect to computing the 2009 estimated
growth in drug prices, to the extent
there are price changes during the
trending period, past increases as well
as decreases would be reflected in
future trend analyses and in future
updates to the drug add-on adjustment.
d. Proposed Update to the Geographic
Adjustments to the Composite Rates
Section 1881(b)(12)(D) of the Act, as
amended by section 623(d) of the MMA,
gives the Secretary the authority to
revise the wage indexes previously
applied to the ESRD composite rates.
The purpose of the wage index is to
adjust the composite rates for differing
wage levels covering the areas in which
ESRD facilities are located. The wage
indexes are calculated for each urban
and rural area. In the CY 2006 PFS final
rule with comment period (70 FR
70167), we announced our adoption of
the OMB CBSA-based geographic area
designations to develop revised urban/
rural definitions and corresponding
wage index values for purposes of
calculating ESRD composite rates. In
addition, we generally have followed
wage index policies related to these
definitions as used under the inpatient
hospital prospective payment system
(IPPS), but without regard to any
approved geographic reclassification
authorized under sections 1886(d)(8)
and (d)(10) of the Act or other
provisions that only apply to hospitals
paid under the IPPS (70 FR 70167). For
purposes of the ESRD wage index
methodology, the hospital wage data we
use is pre-classified, pre-floor hospital
data and unadjusted for occupational
mix.
i. Updates to Core-Based Statistical Area
(CBSA) Definitions
In the CY 2006 PFS final rule with
comment period (70 FR 70167), we
announced our adoption of the OMB’s
CBSA-based geographic area
designations to develop revised urban/
rural definitions and corresponding
wage index values for purposes of
calculating ESRD composite rates.
OMB’s CBSA-based geographic area
designations are described in OMB
Bulletin 03–04, originally issued June 6,
2003, and is available online at https://
www.whitehouse.gov/omb/bulletins/
b03-04.html. In addition, OMB has
published subsequent bulletins
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regarding CBSA changes, including
changes in CBSA numbers and titles.
We wish to point out that this and all
subsequent ESRD rules and notices are
considered to incorporate the CBSA
changes published in the most recent
OMB bulletin that applies to the
hospital wage index used to determine
the current ESRD wage index. The OMB
bulletins may be accessed online at
https://www.whitehouse.gov/omb/
bulletins/.
ii. Updated Wage Index Values
In the CY 2007 PFS final rule with
comment period (71 FR 69685), we
stated that we intended to update the
ESRD wage index values annually. The
current ESRD wage index values for CY
2008 were developed from FY 2004
wage and employment data obtained
from the Medicare hospital cost reports.
As we indicated, the ESRD wage index
values are calculated without regard to
geographic classifications authorized
under sections 1886(d)(8) and (d)(10) of
the Act and utilize pre-floor hospital
data that is unadjusted for occupational
mix. To calculate the ESRD wage index,
hospital wage index data for FY 2004 for
all providers in each urban/rural
geographic area are combined. The sum
of the wages for all providers in each
geographic area was divided by the total
hours for all providers in each area. The
result is the average hourly hospital
wage for that geographic locale. The
ESRD wage index was computed by
dividing the average hourly hospital
wage for each geographic area by the
national average hourly hospital wage.
The final step was to multiply each
wage index value by the ESRD wage
index budget neutrality factor.
We propose to use the same
methodology for CY 2009, with the
exception that FY 2005 hospital data
will be used to develop the CY 2009
wage index values. The CY 2009 ESRD
wage index budget neutrality factor is
1.056672. (See section H.5.d.iii. of this
proposed rule for details about this
adjustment.) For a detailed description
of the development of the proposed CY
2009 wage index values based on FY
2005 hospital data, see the FY 2009
‘‘Proposed Changes to the Hospital
Inpatient Prospective Payment Systems
(IPPS) and Fiscal Year 2009 Rates’’
proposed rule (73 FR 23630). Section III
G. (Computation of the Proposed FY
2009 Unadjusted Wage Index) of the
preamble to that proposed rule
describes the cost report schedules, line
items, data elements, adjustments, and
wage index computations. The wage
index data affecting ESRD composite
rates for each urban and rural locale
may also be accessed on the CMS Web
site at
https://www.cms.hhs.gov/
AcuteInpatientPPS/WIFN/list.asp. The
wage data are located in the section
entitled, ‘‘FY 2009 Proposed Rule
Occupational Mix Adjusted and
Unadjusted Average Hourly Wage and
Pre-reclassified Wage Index by CBSA.’’
(A) Fourth Year of the Transition
In the CY 2006 PFS final rule with
comment period (70 FR 70169), we
indicated that we would apply a 4-year
transition period to mitigate the impact
on the composite rates resulting from
our adoption of CBSA-based geographic
designations. Beginning January 1, 2006,
during each year of the transition, an
ESRD facility’s wage-adjusted composite
rate (that is, without regard to any casemix adjustments) is a blend of its old
MSA-based wage-adjusted payment rate
and its new CBSA-based wage adjusted
payment rate for the transition year
involved. For each transition year, the
share of the blended wage-adjusted base
payment rate that is derived from the
MSA-based and CBSA-based wage
index values is shown in Table 6. In CY
2006, the first year of the transition, we
implemented a 75/25 blend. In CY 2007,
the second year of the transition, we
implemented a 50/50 blend. In CY 2008,
the third year of the transition, we
implemented a 25/75 blend. Consistent
with the transition blends announced in
the CY 2006 PFS final rule with
comment period (70 FR 70170), in CY
2009, we are proposing that each ESRD
facility’s composite payment rate will be
based entirely on the CBSA-based wage
index.
In CY 2006, we eliminated the wage
index cap of 1.30 and stated that we
would implement a gradual reduction in
the wage index floor of 0.90. Prior to
January 1, 2006, the wage indexes were
restricted to values no less than 0.90
and no greater than 1.30, meaning that
payments to facilities in areas where
labor costs fell below 90 percent of the
national average, or exceeded 130
percent of that average, were not
adjusted beyond the 90 percent or 130
percent level. Although we stated that
the ESRD wage index values should not
be constrained by the application of
floors and ceilings, we also expressed
concern that the immediate elimination
of the floor could adversely affect ESRD
beneficiary access to care. Therefore, we
reduced the floor to 0.85 in CY 2006, to
0.80 in CY 2007, and to 0.75 in CY 2008.
For CY 2009, we are proposing to
reduce the wage index floor to 0.70. For
this final year of the transition (CY
2009), we believe that a reduction to
0.70 is appropriate as we continue to
reassess the need for a wage index floor
in future years. We believe that a
gradual reduction in the floor is still
needed to ensure patient access to
dialysis in areas that have low wage
index values, especially Puerto Rico,
and to prevent sudden adverse effects to
the payment system. However, we note
that our goal is the eventual elimination
of all wage index floors.
The wage index floors, caps, and
blended shares of the composite rates
applicable to all ESRD facilities for CY
2006 through CY 2008, and the
proposed floor and blended share
applicable for CY 2009, are shown in
Table 6. They are identical to the values
shown in Table 10 of the CY 2007 PFS
final rule with comment period (71 FR
69686) for the applicable years.
TABLE 6.—WAGE INDEX TRANSITION BLEND
CY payment
sroberts on PROD1PC70 with PROPOSALS
2006
2007
2008
2009
Floor
................................................................................................
................................................................................................
................................................................................................
................................................................................................
0.85
0.80
0.75
* 0.70
Old MSA
(percent)
Ceiling
None
None
None
None
.....................................................
.....................................................
.....................................................
.....................................................
New CBSA
(percent)
75
50
25
0
25
50
75
100
* Each wage index floor is multiplied by a BN adjustment factor. For CY 2009 the BN adjustment is 1.056672 resulting in an actual wage index
floor of 0.7397.
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Because CY 2009 is the final year of
the 4-year transition period, each ESRD
facility’s composite payment rate will be
based entirely on its applicable new
CBSA-based wage index value.
(B) Wage Index Values for Areas With
No Hospital Data
In CY 2006, while adopting the CBSA
designations, we identified a small
number of ESRD facilities in both urban
and rural geographic areas where there
are no hospital wage data from which to
calculate ESRD wage index values. The
affected areas were rural Massachusetts,
rural Puerto Rico, and the urban area of
Hinesville, GA (CBSA 25980). For CY
2006, CY 2007, and CY 2008, we
calculated the ESRD wage index values
for those areas as follows:
• For rural Massachusetts, because
we had not determined a reasonable
wage proxy, we used the FY 2005 wage
index value in CY 2006 and CY 2007.
• For rural Puerto Rico, the situation
was similar to rural Massachusetts.
However, because all geographic areas
in Puerto Rico were subject to the wage
index floor in CY 2006, CY 2007, and
CY 2008, we applied the ESRD wage
index floor to rural Puerto Rico as well.
• For the urban area of Hinesville,
GA, we calculated the CY 2006, CY
2007, and CY 2008 wage index value
based on the average wage index value
for all urban areas within the State of
Georgia.
For CY 2008, we adopted an
alternative methodology for establishing
a wage index value for rural
Massachusetts. Because we used the
same wage index value for 2 years with
no update, we believed it was
appropriate to establish a methodology
which employed reasonable proxy data
for rural areas (including rural
Massachusetts) and also permitted
annual updates to the wage index based
on that proxy data. For rural areas
without hospital wage data, we used the
average wage index values from all
contiguous CBSAs as a reasonable proxy
for that rural area.
In determining the imputed rural
wage index, we interpreted the term
‘‘contiguous’’ to mean sharing a border.
In the case of Massachusetts, the entire
rural area consists of Dukes and
Nantucket Counties. We determined
that the borders of Dukes and Nantucket
counties are contiguous with Barnstable
and Bristol counties. We are proposing
to use the same methodology for CY
2009. Under this methodology, the CY
2009 proposed wage index values for
the counties of Barnstable (CBSA 12700,
Barnstable Town, MA–1.2624) and
Bristol (CBSA 39300, Providence-New
Bedford-Fall River, RI–MA–1.0573)
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were averaged resulting in an imputed
proposed wage index value of 1.1599 for
rural Massachusetts in CY 2009.
For rural Puerto Rico, we continued to
apply the wage index floor in CY 2008.
Because all areas in Puerto Rico that
have a wage index were eligible for the
ESRD wage index floor of 0.75, we
applied that floor to ESRD facilities
located in rural Puerto Rico. For CY
2009, all areas in Puerto Rico that have
a wage index are eligible for the
proposed ESRD wage index floor of
0.70. Therefore, we propose to continue
applying the proposed ESRD wage
index floor of 0.70 to facilities that are
located in rural Puerto Rico.
For Hinesville, GA (CBSA 25980),
which is an urban area without specific
hospital wage data, we propose to apply
the same methodology used to impute a
wage index value that we used in CY
2006, CY 2007, and CY 2008.
Specifically, we utilize the average wage
index value for all urban areas within
the State of Georgia. That results in a
proposed CY 2009 wage index value of
0.9123 for the Hinesville-Fort Stewart
GA CBSA.
In the CY 2008 PFS final rule with
comment period (72 FR 66283), we
stated that we would continue to
evaluate existing hospital wage data and
possibly wage data from other sources
such as the Bureau of Labor Statistics,
to determine if other methodologies
might be appropriate for imputing wage
index values for areas without hospital
wage data for CY 2009 and subsequent
years. To date, no data from other
sources, superior to that currently used
in connection with the IPPS wage index
has emerged. Therefore, for ESRD
purposes, we continue to believe this is
an appropriate policy.
(C) Evaluation of Wage Index Policies
Adopted in the FY 2008 IPPS Final Rule
We also stated that we planned to
evaluate any policies adopted in the FY
2008 IPPS final rule (72 FR 47130,
47337 through 47338) that affect the
wage index, including how we treat
certain New England hospitals under
section 601(g) of the Social Security
Amendments of 1983 (Pub. L. 98–21).
This is relevant for the ESRD composite
payment system, because the ESRD
wage index is calculated using the same
urban/rural classification system and
computation methodology applicable
under the IPPS, except that it is not
adjusted for occupational mix and does
not reflect geographic classifications
authorized under sections 1886(d)(8)
and (d)(12) of the Act. We use the
hospital wage index with this
modification because it is the best
available measure effective of urban and
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38531
rural differences in labor costs among
dialysis facilities. Accordingly, in the
following sections, we summarize the
wage index changes implemented in
connection with the IPPS, as they affect
the ESRD wage index used under the
composite payment system.
(1) CY 2009 Classification of Certain
New England Counties
We are addressing the change in the
treatment of ‘‘New England deemed
counties’’ (that is, those counties in New
England listed in § 412.64(b)(1)(ii)(B)
that were deemed to be part of urban
areas under section 601(g) of the Social
Security Amendments of 1983), that
were made in the FY 2008 IPPS final
rule with comment period (72 FR 47337
through 47338). These counties include
the following: Litchfield County,
Connecticut; York County, Maine;
Sagadahoc County, Maine; Merrimack
County, New Hampshire; and Newport
County, Rhode Island. Of these five
‘‘New England deemed counties’’, three
(York County, Sagadahoc County, and
Newport County) are also included in
the MSAs defined by OMB, and
therefore, used in the calculations of the
urban hospital wage index values
reflected in the ESRD composite
payment rates. The remaining two,
Litchfield County and Merrimack
County, are geographically located in
areas that are considered ‘‘rural’’ under
the current IPPS and ESRD composite
payment system labor market
definitions, but have been previously
deemed urban under the IPPS in certain
circumstances, as discussed below.
In the FY 2008 IPPS final rule with
comment period, for purposes of IPPS,
§ 412.64(b)(1)(ii)(B) was revised such
that the two ‘‘New England deemed
counties’’ that are still considered rural
under the OMB definitions (Litchfield
County, CT and Merrimack County, NH)
are no longer considered urban effective
for discharges occurring on or after
October 1, 2007, and therefore, are
considered rural in accordance with
§ 412.64(b)(1)(ii)(C). However, for
purposes of payment under the IPPS,
acute-care hospitals located within
those areas are treated as being
reclassified to their deemed urban areas
effective for discharges occurring on or
after October 1, 2007 (see 72 FR 473337
through 47338). We note that the ESRD
composite payment system does not
provide for such geographic
reclassification. Also, in the FY 2008
IPPS final rule with comment period (72
FR 47338), we explained that we have
limited this policy change for the ‘‘New
England deemed counties’’ only to IPPS
hospitals, and any change to non-IPPS
provider wage indexes would be
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addressed in the respective payment
system rules. Accordingly, we are taking
this opportunity to clarify the treatment
of ‘‘New England deemed counties’’
under the ESRD composite payment
system in this proposed rule.
As discussed above, for purposes of
the ESRD wage index, we have
recognized the OMB’s CBSA
designations, as well as generally
following the policies under IPPS with
regard to the definitions for ‘‘urban’’ and
‘‘rural’’ for the wage index. Historical
changes to the labor market area/
geographic classifications and annual
updates to the wage index values under
the composite payment system are made
effective January 1 each year. When we
established the most recent composite
payment system update, effective for
dialysis services provided on or after
January 1, 2008, we considered the
‘‘New England deemed counties’’
(including Litchfield County, CT and
Merrimack County, NH) as urban for CY
2008, as evidenced by the inclusion of
Litchfield County as one of the
constituent counties of urban CBSA
25540 (Hartford-West Hartford-East
Hartford, CT), and the inclusion of
Merrimack County as one of the
constituent counties of urban CBSA
31700 (Manchester-Nashua, NH).
Litchfield County, CT and Merrimack
County, NH are not considered ‘‘urban’’
under § 412.64(b)(1)(ii)(A) through (B)
as revised under the FY 2008 IPPS final
rule and, therefore, are considered
‘‘rural’’ under § 412.64(b)(1)(ii)(C).
Accordingly, to reflect our general
policy for ESRD wage index, these two
counties will be considered ‘‘rural’’
under the ESRD composite payment
system effective with the next update of
the payment rates on January 1, 2009,
and will no longer be included in urban
CBSA 25540 (Hartford-West HartfordEast Hartford, CT) and urban CBSA
31700 (Manchester-Nashua, NH),
respectively. We note that this policy is
consistent with our other policy of not
taking into account IPPS geographic
reclassifications in determining
payments under the composite payment
system.
(2) Multi-Campus Hospital Wage Index
Data
In the CY 2008 ESRD composite
payment system final rule (72 FR
66280), we established ESRD wage
index values for CY 2008 calculated
from the same data (collected from cost
reports submitted by hospitals for cost
reporting periods beginning during FY
2004) used to compute the FY 2008
acute care hospital inpatient wage
index, without taking into account
geographic reclassification under
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sections 1886(d)(8) and (d)(10) of the
Act. However, the IPPS policy that
apportions the wage data for multicampus hospitals was not finalized
before the ESRD composite payment
system final rule. Therefore the CY 2008
ESRD wage index values reflected the
IPPS wage data are based on a hospital’s
actual location without regard to the
urban or rural designation of any related
or affiliated provider. Accordingly, all
wage data from different campuses of a
multi-campus hospital were included in
the calculation of the CBSA wage index
of the main hospital. The ESRD wage
index values applicable for services
provided on or after January 1, 2008
through December 31, 2008 are shown
in Addendum G for urban areas and
Addendum H for rural areas (72 FR
66552 through 66574) of the CY 2008
PFS final rule with comment period.
We are continuing to use IPPS data for
CY 2009 because we believe that in the
absence of dialysis facility specific wage
data, using the hospital inpatient wage
data is appropriate and reasonable for
the ESRD composite payment system.
We note that the IPPS wage data used
to determine the proposed CY 2009
ESRD wage index values were
computed from wage data submitted by
hospitals for cost reporting periods
beginning in FY 2005 and reflect our
policy adopted under the IPPS
beginning in FY 2008, which apportions
the wage data for multi-campus
hospitals located in different labor
market areas, CBSAs, to each CBSA
where the campuses are located (see the
FY 2008 IPPS final rule with comment
period (72 FR 47317 through 47320)).
Specifically, for the proposed CY 2009
ESRD composite payment system, the
wage index was computed using IPPS
wage data (published by hospitals for
cost reporting periods beginning in
2005, as with the FY 2009 IPPS wage
index), which allocated salaries and
hours to the campuses of two multicampus hospitals with campuses that
are located in different labor areas; one
in Massachusetts and the other is
Illinois. The ESRD wage index values
proposed for CY 2009 in the following
CBSAs are affected by this policy:
Boston-Quincy, MA (CBSA 14484),
Providence-New Bedford-Falls River,
RI–MA (CBSA 39300), ChicagoNaperville-Joliet, IL (CBSA 16974), and
Lake County-Kenosha County, IL–WI
(CBSA 29404). Please refer to
Addendums G and H of this proposed
rule.
In summary, for CY 2009, we propose
to use the FY 2009 wage index data
(collected from cost reports submitted
by hospitals for cost reporting periods
beginning during FY 2005) to compute
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the ESRD composite payment rates
effective beginning January 1, 2009.
These data reflect the multi-campus and
New England deemed counties policies
discussed above.
iii. Budget Neutrality Adjustment
Section 1881(b)(12)(E)(i) of the Act, as
added by section 623(d) of the MMA,
requires any revisions to the ESRD
composite rate payment system as a
result of the MMA provision (including
the geographic adjustment) be made in
a budget neutral manner. This means
that aggregate payments to ESRD
facilities in CY 2008 should be the same
as aggregate payments that would have
been made if we had not made any
changes to the geographic adjusters. We
note that this BN adjustment only
addresses the impact of changes in the
geographic adjustments. A separate BN
adjustment was developed for the casemix adjustments currently in effect. As
we are not proposing any changes to the
case-mix measures for CY 2009, the
current case-mix BN adjustment will
remain in effect for CY 2009. As in CY
2008, for CY 2009, we again propose to
apply a BN adjustment factor (1.056672)
directly to the ESRD wage index values.
As explained in the CY 2007 PFS final
rule with comment period (71 FR 69687
through 69688), we believe this is the
simplest approach because it allows us
to maintain our base composite rates
during the transition from the current
wage adjustments to the revised wage
adjustments described previously in this
section. Because the ESRD wage index
is only applied to the labor-related
portion of the composite rate, we
computed the BN adjustment factor
based on that proportion (53.711
percent).
To compute the proposed CY 2009
wage index BN adjustment factor
(1.056672), we used the FY 2005 prefloor, pre-reclassified, non-occupational
mix-adjusted hospital data to compute
the wage index values, 2007 outpatient
claims (paid and processed as of
December 31, 2007), and geographic
location information for each facility
which may be found through the
Dialysis Facility Compare Web page on
the CMS Web site at https://
www.cms.hhs.gov/
DialysisFacilityCompare/. The FY 2005
hospital wage index data for each urban
and rural locale by CBSA may also be
accessed on the CMS Web site at
https://www.cms.hhs.gov/
AcuteInpatientPPS/WIFN/list.asp. The
wage index data are located in the
section entitled, ‘‘FY 2009 Proposed
Rule Occupational Mix Adjusted and
Unadjusted Average Hourly Wage and
Pre-Reclassified Wage Index by CBSA.’’
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Using treatment counts from the 2007
claims and facility-specific CY 2008
composite rates, we computed the
estimated total dollar amount each
ESRD provider would have received in
the CY 2008 (the 3rd year of the 4-year
transition). The total of these payments
became the target amount of
expenditures for all ESRD facilities for
CY 2009. Next, we computed the
estimated dollar amount that would
have been paid to the same ESRD
facilities using the proposed ESRD wage
index for CY 2009 (the 4th year of the
4-year transition). The total of these
payments became the fourth year new
amount of wage-adjusted composite rate
expenditures for all ESRD facilities.
After comparing these two dollar
amounts (target amount divided by the
4th year new amount), we calculated an
adjustment factor that, when multiplied
by the applicable CY 2009 ESRD
proposed wage index value, would
result in aggregate payments to ESRD
facilities that will remain within the
target amount of composite rate
expenditures. When making this
calculation, the ESRD wage index floor
value of 0.7000 is used whenever
appropriate. The proposed BN
adjustment factor for the CY 2009 wage
index is 1.056672.
To ensure BN, we also must apply the
BN adjustment factor to the proposed
wage index floor of 0.7000 which results
in a proposed adjusted wage index floor
of 0.7397 (0.7500 × 1.056672) for CY
2009.
iv. ESRD Wage Index Tables
The proposed 2009 wage index tables
are located in Addenda G and H of this
proposed rule.
sroberts on PROD1PC70 with PROPOSALS
v. Application of the Hospital-Acquired
Conditions Payment Policy for IPPS
Hospitals to Other Settings
Value-based purchasing (VBP) ties
payment to performance through the use
of incentives based on measures of
quality and cost of care. The
implementation of VBP is rapidly
transforming CMS from being a passive
payer of claims to an active purchaser
of higher quality, more efficient health
care for Medicare beneficiaries. Our
VBP initiatives include hospital pay for
reporting (the Reporting Hospital
Quality Date for the Annual Payment
Update Program), physician pay for
reporting (the Physician Quality
Reporting Initiative), home health pay
for reporting, the Hospital VBP Plan
Report to Congress, and various VBP
demonstration programs across payment
settings, including the Premier Hospital
Quality Incentive Demonstration and
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the Physician Group Practice
Demonstration.
The preventable hospital-acquired
conditions (HAC) payment provision for
IPPS hospitals is another of our valuebased purchasing initiatives. The
principal behind the HAC payment
provision (Medicare not paying more for
healthcare-associated conditions) could
be applied to the Medicare payment
systems for other settings of care.
Section 1886(d)(4)(D) of the Act requires
the Secretary to select for the HAC IPPS
payment provision conditions that are:
(1) High cost, high volume, or both; (2)
assigned to a higher paying MS-DRG
when present as a secondary diagnosis;
and (3) could reasonably have been
prevented through the application of
evidence-based guidelines. Beginning
October 1, 2008, Medicare can no longer
assign an inpatient hospital discharge to
a higher paying MS-DRG if a selected
HAC condition was not present on
admission. That is, the case will be paid
as though the secondary diagnosis was
not present. Medicare will continue to
assign a discharge to a higher paying
Medicare Severity-Diagnosis Related
Group (MS-DRG) if a selected condition
was present on admission.
The broad principle articulated in the
HAC payment provision for IPPS
hospitals—Medicare not paying for
healthcare-associated conditions—could
potentially be applied to other Medicare
payment systems for conditions that
occur in settings other than IPPS
hospitals. Other possible settings of care
include, but are not limited to: Hospital
outpatient departments; SNFs; HHAs;
ESRD facilities; and physician practices.
The implementation would be different
for each setting, as each payment system
is different and the reasonable
preventability through the application
of evidence-based guidelines would
vary for candidate conditions over the
different settings. However, alignment
of incentives across settings of care is an
important goal for all of our VBP
initiatives, including the HAC
provision.
A related application of the broad
principle behind the HAC payment
provision for IPPS hospitals could be
considered through Medicare secondary
payer policy by requiring the provider
that failed to prevent the occurrence of
a preventable condition in one setting to
pay for all or part of the necessary
follow up care in a second setting. This
would help shield the Medicare
program from inappropriately paying for
the downstream effects of a preventable
condition acquired in the first setting
but treated in the second setting.
We note that we are not proposing
new Medicare policy in this discussion
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38533
of the possible application of HACs
payment policy for IPPS hospitals to
other settings, as some of these
approaches may require new statutory
authority. We are seeking public
comment on the application of the
preventable HACs payment provision
for IPPS hospitals to other Medicare
payment systems. We look forward to
working with stakeholders in the fight
against healthcare-associated
conditions.
I. Independent Diagnostic Testing
Facility (IDTF) Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘INDEPENDENT DIAGNOSTIC
TESTING FACILITIES’’ at the beginning
of your comments.]
In the CY 2007 and 2008 PFS final
rules with comment period, we
established performance standards for
suppliers enrolled in the Medicare
program as an IDTF (71 FR 69695 and
72 FR 66285). These standards were
established to improve the quality of
care for diagnostic testing furnished to
Medicare beneficiaries by a Medicare
enrolled IDTF and to improve our
ability to verify that these suppliers
meet minimum enrollment criteria to
enroll or maintain enrollment in the
Medicare program. These performance
standards were established at § 410.33.
In this proposed rule, we are again
proposing to expand on the quality and
program safeguard activities that we
implemented previously.
1. Improving Quality of Diagnostic
Testing Services Furnished by Physician
and Nonphysician Practitioner
Organizations
During the CY 2008 PFS proposed
rule comment period, we received
comments requesting that we require
that the IDTF performance standards
adopted in § 410.33, including
prohibitions regarding the sharing of
space and leasing/sharing arrangements,
apply to physicians and nonphysician
practitioners (NPPs) who are performing
diagnostic testing services for Medicare
beneficiaries, and who have enrolled in
the Medicare program as a clinic, group
practice, or physician office. The
commenters stated that standards for
imaging services were not applied
consistently for all imaging centers and
that two distinct compliance and
regulatory standards would emerge
depending on how the similarly situated
imaging centers were enrolled. In
addition, one commenter stated that we
should not prohibit space sharing when
done with an adjoining physician
practice or radiology group that is an
owner of an IDTF.
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In response to the public comments,
we are concerned that—
• Certain physician entities,
including physician group practices,
and clinics, can enroll as a group
practice or clinic and provide diagnostic
testing services without the benefit of
qualified nonphysician personnel, as
defined in § 410.33(c), to conduct
diagnostic testing.
• Some physician entities expect to
furnish diagnostic testing services for
their own patients and the general
public and are making the decision to
enroll as a group or clinic thereby
circumventing the performance
standards found in the IDTF
requirements in § 410.33.
• Some physician organizations are
furnishing diagnostic tests using mobile
equipment provided by an entity that
furnishes mobile diagnostic services.
We are proposing certain exceptions
to the established performance
standards found in § 410.33(g) because
we believe that physician organizations
already meet or exceed some of these
standards. For example, their liability
insurance coverage usually far exceeds
the $300,000 per incident threshold,
and there are a host of ways in which
patient may issue clinical complaints
concerning their physicians. In
addition, we believe that compliance
with some of the performance standards
would be costly and burdensome and
possibly limit beneficiary access,
particularly in rural or medically
underserved areas. For these reasons,
we propose not to require physician
entities to comply with the following
standards:
• Maintaining additional
comprehensive liability insurance for
each practice location as required under
§ 410.33(g)(6).
• Maintaining a formal clinical
complaint process as required under
§ 410.33(g)(8).
• Posting IDTF standards as required
under § 410.33(g)(9).
• Maintaining a visible sign posting
business hours as required under
§ 410.33(g)(14)(ii).
• Separately enrolling each practice
location as required under
§ 410.33(g)(15)(i).
Accordingly, we are proposing to add
§ 410.33(j) which states that, ‘‘A
physician or NPP organization (as
defined in § 424.502) furnishing
diagnostic testing services, except
diagnostic mammography services: (1)
Must enroll as an independent
diagnostic testing facility for each
practice location furnishing these
services; and (2) is subject to the
provisions found in § 410.33, except for
§ 410.33(g)(6), § 410.33(g)(8),
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§ 410.33(g)(9), § 410.33(g)(14)(ii), and
§ 410.33(g)(15)(i). As discussed in
section II.J. of this preamble, we propose
to define a ‘‘physician or nonphysician
practitioner organization’’ as any
physician or NPP entity that enrolls in
the Medicare program as a sole
proprietorship or organizational entity
such as a clinic or group practice.
We maintain that this enrollment
requirement is necessary to ensure that
beneficiaries are receiving the quality of
care that can only be administered by
appropriately licensed or credentialed
nonphysician personnel as described in
§ 410.33(c). Moreover, we propose that
physician or NPP organizations that do
not enroll as an IDTF and meet the
provisions at § 410.33 may be subject to
claims denial for diagnostic testing
services or a revocation of their billing
privileges.
We are soliciting comments on
whether we should consider
establishing additional exceptions to the
established performance standards in
§ 410.33(g) for physician and NPP
organizations furnishing diagnostic
testing services.
While we believe that most physician
and NPP organizations utilize
nonphysician personnel described in
§ 410.33(c) to furnish diagnostic testing
services, we are also soliciting
comments on whether physician or
NPPs conduct diagnostic tests without
benefit of qualified nonphysician
personnel and under what
circumstances the testing occurs.
While we are proposing to apply the
IDTF requirement to all diagnostic
testing services furnished in physicians’
offices, we are considering whether to
limit this enrollment requirement to less
than the full range of diagnostic testing
services, such as to procedures that
generally involve more costly testing
and equipment. We seek comment about
whether the policy should apply only to
imaging services or whether it should
also include other diagnostic testing
services such as electrocardiograms or
other diagnostic testing services
frequently furnished by primary care
physicians. Within the scope of imaging
services, we seek comment about
whether the policy should be limited to
advanced diagnostic testing procedures
which could include diagnostic
magnetic resonance imaging, computed
tomography, and nuclear medicine
(including positron emission
tomography), and other such diagnostic
testing procedures described in section
1848(b)(4)(B) of the Act (excluding Xray, ultrasound, and fluoroscopy). We
are also soliciting comments on what
would be appropriate criteria to limit
this provision.
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Finally, since this change, if adopted,
would take time to implement for
suppliers that have enrolled in the
Medicare program, we are proposing an
effective date of September 30, 2009,
rather than the effective date of the final
rule. For newly enrolling suppliers, the
effective date of this rule would be
January 1, 2009.
2. Mobile Entity Billing Requirements
To ensure that entities furnishing
mobile services are providing quality
services and are billing for the
diagnostic testing services they furnish
to Medicare beneficiaries, we are
proposing a new performance standard
for mobile entities at § 410.33(g)(16),
which would require that entities
furnishing mobile diagnostic services
enroll in Medicare and bill directly for
the mobile diagnostic services that they
furnish, regardless of where the services
are performed. We believe that entities
furnishing mobile diagnostic services to
Medicare beneficiaries must be enrolled
in the Medicare program, comply with
the IDTF performance standards, and
directly bill Medicare for the services
they render.
While we understand that a mobile
entity can furnish diagnostic testing
services in various types of locations,
we believe that it is essential that
mobile entities use qualified physicians
or nonphysician personnel to perform
diagnostic testing procedures and that
the enrolled mobile supplier bill for the
services rendered. We maintain that it is
essential to our program integrity and
quality improvement efforts that an
entity furnishing mobile diagnostic
testing services comply with the
performance standards for IDTFs and
bill the Medicare program directly for
the services provided to Medicare
beneficiaries.
Since we believe that most mobile
entities are already billing for the
services they furnish, whether the
service was provided in a fixed-based
location or in a mobile facility, this
proposed provision, if adopted, would
be effective with the effective date of the
final rule.
3. Revocation of Enrollment and Billing
Privileges of IDTFs in the Medicare
Program
Historically, we have allowed IDTFs
whose Medicare billing numbers have
been revoked to continue billing for
services furnished prior to revocation
for up to 27 months after the effective
date of the revocation. Since we believe
that permitting this extensive billing
period poses a significant risk to the
Medicare program, we are proposing to
limit the claims submission timeframe
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after revocation. In § 424.535(g), we are
proposing that a revoked IDTF must
submit all outstanding claims for not
previously submitted items and services
furnished within 30 calendar days of the
revocation effective date. We maintain
that this change is necessary to limit the
Medicare program exposure to future
vulnerabilities from physician and NPP
organizations and individual
practitioners that have had their billing
privileges revoked. Accordingly, this
proposed change would allow a
Medicare contractor to conduct focused
medical review on the claims submitted
during the claims filing period to ensure
that each claim is supported by medical
documentation that the contractor can
verify. We maintain that focused
medical review of these claims will
ensure that Medicare only pays for
services furnished by a physician or
NPP organization or individual
practitioner and that these entities and
individuals receive payment in a timely
manner. In addition, we are also
proposing to amend § 424.44(a)(3) to
account for this provision related to the
requirements for the timely filing of
claims. The timely filing requirements
in § 424.44(a)(1) and (a)(2) will no
longer apply to physician and NPP
organizations, physicians, NPPs and
IDTFs whose billing privileges have
been revoked by CMS.
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J. Physician and Nonphysician
Practitioner (NPP) Enrollment Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘PHYSICIAN AND
NONPHYSICIAN PRACTITIONER
ENROLLMENT ISSUES’’ at the
beginning of your comments.]
1. Effective Date of Medicare Billing
Privileges
In accordance with § 424.510,
physician and NPP organizations (that
is, groups, clinics, and sole owners) and
individual practitioners including
physicians and NPPs, operating as sole
proprietorships or reassigning their
benefits to a physician and
nonphysician organization may submit
claims as specified in § 424.44 after they
are enrolled in the Medicare program.
This provision permits newly enrolled
physician and NPP organizations and
individual practitioners, as well as
existing physicians and nonphysician
organizations and individual
practitioners to submit claims for
services for services that were rendered
prior to the date of filing or the date the
applicant received billing privileges to
participate in the Medicare program.
For the purposes of this proposed
rule, we believe that a NPP includes, but
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is not limited to, the following
individuals: Anesthesiology assistants,
audiologists, certified nurse midwifes,
certified registered nurse anesthetists,
clinical social workers, NPs,
occupational therapists in private
practice, physical therapists in private
practice, PAs, clinical psychologists,
psychologists billing independently,
and registered dieticians or nutrition
professionals.
Once enrolled, physician and NPP
organizations and individual physicians
and NPPs, depending on their effective
date of enrollment, may retroactively
bill the Medicare program for services
that were rendered up to 27 months
prior to being enrolled to participate in
the Medicare program. For example, if
a supplier is enrolled in the Medicare
program in December 2008 with an
approval date back to October 2006, that
supplier could retrospectively bill for
services furnished to Medicare
beneficiaries as early as October 1, 2006.
Currently, physician and NPP
organizations and individual
practitioners, including physicians and
NPPs, are not prohibited from billing
Medicare prior to their enrollment date.
Therefore, it is possible that the
physician and NPP organizations and
individual practitioners who meet our
program requirements on the date of
enrollment may not have met those
same requirements prior to the date of
enrollment, even though that supplier
could bill Medicare and receive
payments for services rendered up to 27
months prior to their enrolling in the
Medicare program. We are concerned
that some physician and NPP
organizations and individual
practitioners may bill Medicare for
services when they are not meeting our
other program requirements, including
those related to providing beneficiary
protections, such as Advance
Beneficiary Notices.
We are seeking public comment on
two approaches for establishing an
effective date for Medicare billing
privileges for physician and NPP
organizations and for individual
practitioners.
The first approach would establish
the initial enrollment date for physician
and NPP organizations and for
individual practitioners, including
physician and NPPs, as the date of
approval by a Medicare contractor. This
approach would prohibit physician and
NPP organizations and individual
practitioners from billing for services
rendered to a Medicare beneficiary
before they are approved and enrolled
by a designated Medicare contractor to
participate in the Medicare program and
Medicare billing privileges are conveyed
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to their National Provider Identifier
(NPI). The date of approval is the date
that a designated Medicare contractor
determines that the physician or NPP
organizations or individual practitioner
meets all Federal and State
requirements for their supplier type.
Given this first approach, in
§ 424.520, we may implement
regulations text that reads similar to
‘‘the effective date of billing privileges
for physician and NPP organizations
and individual practitioners, including
physicians and NPPs, is the date a
Medicare contractor conveys billing
privileges to an NPI.’’
We believe that this approach—
• Prohibits physician and NPP
organizations and individual
practitioners from receiving payments
before a Medicare contractor conveys
Medicare billing privileges to an NPI (69
FR 3434);
• Is consistent with our requirements
in § 489.13 for those providers and
certain suppliers that require a State
survey prior to being enrolled and the
requirements for durable medical
equipment, prosthetics, orthotics, and
supplies (DMEPOS) suppliers in
§ 424.57(b)(2);
• Is consistent with our requirements
for providers identified in § 400.202 and
surveyed suppliers are allowed to bill
for service only after they are approved
to participate in the Medicare program.
Surveyed suppliers are suppliers who
have been certified by either CMS or a
State certification agency and are in
compliance with Medicare
requirements. Surveyed suppliers may
include ASCs or portable x-ray
suppliers; and
• Ensures that we are able to verify a
supplier’s qualifications, including
meeting any performance standards
before payment for services can occur.
The second approach would establish
the initial enrollment date for physician
and NPP organizations and individual
practitioners, including physician and
NPPs, as the later of: (1) The date of
filing of a Medicare enrollment
application that was subsequently
approved by a fee-for-service (FFS)
contractor; or (2) the date an enrolled
supplier first started rendering services
at a new practice location. The date of
filing the enrollment application is the
date that the Medicare FFS contractor
receives a signed Medicare enrollment
application that the Medicare FFS
contractor is able to process to approval.
This option would allow a supplier that
is already seeing non-Medicare patients
to start billing for Medicare patients
beginning on the day they submit an
enrollment application that can be fully
processed. In contrast to the first option,
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a newly enrolling physician and NPP
organizations and individual
practitioners or physician and NPP
organizations and individual
practitioners that are establishing or
changing a practice location would be
allowed to bill the Medicare program for
services furnished to Medicare
beneficiaries on or after the date of filing
if a Medicare contractor approves
Medicare billing privileges and conveys
billing privileges to an NPI. It is also
important to note that if a Medicare
contractor rejects or denies an
enrollment application, then the
physician or NPP organization or
individual practitioner is at risk of not
receiving payment for any services
furnished after the date of filing.
Given this second approach, in
§ 424.520, we may implement
regulations text that reads similar to
‘‘the effective date of billing privileges
for physician and NPP organizations
and for individual practitioners,
physicians and NPPs, is the later of—(1)
The filing date of the Medicare
enrollment application that was
subsequently approved by an FFS
contractor; or (2) The date that the
physician or NPP organization or
individual practitioner first furnished
services at a new practice location.’’
We believe that this approach—
• Prohibits physician and NPP
organizations and individual
practitioners, including physician and
NPPs, from receiving payments before a
Medicare contractor conveys Medicare
billing privileges to an NPI (69 FR
3434);
• Is consistent with our requirements
found at § 410.33(i) that limit the
retrospective billing for IDTFs and
ensures that Medicare billing privileges
are conveyed to physician and NPP
organizations and to individual
physician and NPPs in a similar manner
similar to IDTFs; and
• Addresses the public’s concern
regarding contractor processing
timeliness while appropriately ensuring
that Medicare payments are made to
physician and NPP organizations and to
individual physician and NPPs who
have enrolled in a timely manner.
We maintain that it is not possible to
verify that a supplier has met all of
Medicare’s enrollment requirements
prior to submitting an enrollment
application. Therefore, the Medicare
program should not be billed for
services before the later of the two dates
that a physician or NPP organization,
physician or NPP has submitted an
enrollment application that can be fully
processed or when the enrolled supplier
is open for business.
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To assist physician and NPP
organizations and individual
practitioners in enrolling and updating
their existing enrollment record, we
established Internet-based enrollment
process known as Internet-based
Provider Enrollment, Chain and
Ownership System (PECOS). Internetbased PECOS is available to physician
and NPP organizations and individual
practitioners in all States, except
California, Missouri, and New York, in
early CY 2009. We expect that Internetbased PECOS will be available to
physician and NPP organizations and
individual practitioners in California,
Missouri, and New York by September
30, 2009.
By using Internet-based PECOS, we
expect that physician and NPP
organizations and individual
practitioners will be able reduce the
time necessary to enroll in the Medicare
program or make a change in their
Medicare enrollment record by reducing
common errors in the application
submission process. We expect that
Medicare contractors will fully process
most complete Internet-based PECOS
enrollment applications within 30 to 45
calendar days compared to 60 to 90
calendar days in the current paperbased enrollment process. Thus, if
physician and NPP organizations and
individual practitioners enroll in the
Medicare program or make a change in
their existing Medicare enrollment
using Internet-based PECOS and submit
required supporting documentation,
including a signed certification
statement, licensing and education
documentation, and, if necessary, the
electronic funds transfer authorization
agreement (CMS–588) 45 days before
their effective date, a Medicare
contractor should be able to process the
enrollment application without a delay
in payment.
The date of filing for Internet-based
PECOS will be the date the Medicare
FFS contractor receives all of the
following: (1) A signed certification
statement; (2) an electronic version of
the enrollment application; and (3) a
signature page that the Medicare FFS
contractor processes to approval.
In § 424.502, we are also proposing to
define a physician and NPP
organization to mean any physician or
NPP entity that enrolls in the Medicare
program as a sole proprietorship or
organizational entity such as clinic or
group practice. In addition to
establishing organizational structure as
a sole proprietorship, physicians and
NPPs are able to establish various
organizational relationships including
corporations, professional associations,
partnerships, limited liability
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corporations and subchapter S
corporations. We believe that proposed
definition above would include sole
proprietorships that receive a type 1 NPI
and any organizational entity that is
required to obtain a type 2 NPI.
2. Medicare Billing Privileges and
Existing Tax Delinquency
The Government Accountability
Office (GAO) found that over 21,000 of
the physicians, health professionals,
and suppliers paid under Medicare Part
B during the first 9 months of calendar
year 2005 had tax debts totaling over $1
billion. The GAO report titled,
‘‘Medicare, Thousands of Medicare Part
B Providers Abuse the Federal Tax
System (GAO–07–587T)’’ found abusive
and potentially criminal activity,
including failure to remit to IRS
individual income taxes or payroll taxes
or both withheld from their employees.
While we do not currently consider
whether an individual physician, NPP
currently enrolled in the Medicare
program has delinquent tax debts with
the Internal Revenue Service (IRS), we
do consider whether a physician or NPP
was convicted of a Federal or State
felony offense, including income tax
evasion, that we have determined to be
detrimental to the best interest of the
Medicare program. Moreover, if a
physician or NPP was convicted of
Federal or State felony offense within
the 10 years preceding enrollment or
revalidation of enrollment that we
determined to be detrimental to the best
interest of the Medicare program, we
could deny or revoke the Medicare
billing privileges of the physician or
NPP.
The Financial Management Service
(FMS), a bureau of the Department of
Treasury, initiated the Federal Payment
Levy Program (FPLP) portion of the
Continuous Levy Program in July 2000
to recover delinquent Federal tax debts.
The FPLP is a program whereby
delinquent Federal income tax debts are
collected by levying non-tax payments,
as authorized by the Taxpayer Relief Act
of 1997 (Pub. L. 105–34). The FPLP
includes vendor and Social Security
benefit payments, and Medicare
payments. It is accomplished through a
process of matching delinquent debtor
data with payment record data. This
automated collection of debt at the time
of payment occurs after the delinquent
taxpayer has been afforded due process,
in accordance with the Internal Revenue
Code.
In July 2000, the IRS in conjunction
with the Department of Treasury’s FMS
started the FPLP which is authorized by
section 6331(h) of the Internal Revenue
Code as prescribed by section 1024 of
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the Taxpayer Relief Act of 1997.
Through this program, the IRS can
collect overdue taxes through a
continuous levy on certain Federal
payments disbursed by FMS; it
generally allows Medicare to match a
claim to a delinquent taxpayer, offset
the payment, and recover a percentage
of the amount due.
The FPLP is a collection and
enforcement tool used by the IRS for
individuals that have received all
requisite notification of tax delinquency
and who have either exhausted or
neglected to use their respective appeal
rights; therefore, the FPLP is only
applied after all previous IRS
collections efforts have failed.
Accordingly, the FPLP is an automated
levy program where certain delinquent
taxpayers are systematically matched
and levied on their Federal payments
disbursed by Treasury’s FMS.
In 2001, we implemented the FPLP
process for Medicare Part C and vendor
payments, and in FY 2009, we will
implement the FPLP process for
payments made to providers and
suppliers reimbursed under Part A and
Part B of the Medicare program.
However, the FPLP does not allow CMS
to offset a payment when an individual
reassigns his or her benefits to a thirdparty, such as a group practice where an
existing Federal tax delinquency exists.
Consistent with statutory authority
found under sections 1866(j)(1)(A) and
1871 of the Act, we believe that we have
the authority to establish and make
changes to the enrollment process for
providers and suppliers of service.
Accordingly, to ensure that the Federal
government is able to recoup delinquent
Federal tax debts from physicians and
NPPs who are enrolled in the Medicare
program and are receiving payments, we
are considering revoking the billing
privileges for those individuals for
which a tax delinquency exists and we
are unable to directly levy future
payments through the FPLP. While we
are not proposing this change in this
year’s PFS, we will consider proposing
this type of change in a future
rulemaking effort after we have
implemented the FPLP process,
monitored and evaluated the
implementation of FPLP process, and
analyzed the potential impact of this
change on physician and NPPs who are
subject to the FPLP but that we are
unable to directly levy future payments
through the FPLP. In addition, we
expect to conduct outreach regarding
our implementation in advance of
implementing the FPLP in FY 2009.
We believe that this change, if
proposed and adopted, would prohibit
an individual with a tax delinquency
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from shielding their future payments
through reassignment of benefits to a
third party. Finally, since the tax
delinquency is incurred by an
individual who has reassigned his or
her benefits to a third party, we do not
believe that it is appropriate to take
action against the third-party. We
believe that this is consistent with the
protections already afforded to an
individual by the IRS but ensures that
Medicare does not enroll or allow
continued enrollment to an individual
with serious tax delinquency.
We maintain that it is essential that a
physician or NPP resolve any existing
Federal tax delinquency before entering
the Medicare program. This will ensure
that the Medicare program is not making
payment to an individual who has not
met his or her obligation to pay their tax
debts.
Finally, we are soliciting comments
on whether we should consider
revoking a physician billing privileges
or taking some other type of
administrative action when a physician
or NPP has a Federal tax delinquency
that can not be levied through the FPLP
process. We are also soliciting
comments on whether we should
consider revoking the billing privileges
of an organizational entity or taking
some other type of administrative action
against organizational entities when the
owners of an organizational entity have
a Federal tax delinquency that can not
be levied through the FPLP process.
3. Denial of Enrollment in the Medicare
Program (proposed § 424.530(a)(6) and
(a)(7))
Currently, owners, authorized
officials, and delegated officials of a
physician and NPP organizations and
individual practitioners, including
physicians and NPPs, can obtain
additional billing privileges by
establishing a new tax identification
number (TIN), reassigning benefits to
another entity, or by submitting an
enrollment application as another
provider or supplier type even though
the entity for which the provider or
supplier rendered services and has had
its billing privileges revoked,
suspended, or has an outstanding
Medicare overpayment. Absent a reason
to reject or deny a Medicare enrollment
application, the Medicare FFS
contractor is required to approve the
enrollment application for a provider or
supplier who meets all other Federal
and State enrollment requirements for
their provider or supplier type.
By submitting and having an
enrollment application (for example, an
initial application or a change of
ownership) with a new TIN, some
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38537
physician and NPP organizations and
individual practitioners are able to
circumvent existing Medicare
revocation, payment suspension,
overpayment recovery, and medical
review processes by obtaining
additional Medicare billing privileges.
By obtaining additional billing
privileges for multiple locations, these
providers and suppliers are able to
discontinue the use of the NPI that has
an administrative action against it and
bill and receive payment under another
NPI.
Consistent with § 405.371, we will
impose a payment suspension when we
possesses reliable information that an
overpayment or fraud, or willful
misrepresentation exist, or that
payments to be made may not be
correct. While providers and suppliers
do not have formal appeal rights to a
payment suspension determination,
providers and suppliers can submit a
rebuttal to CMS’ payment suspension
determination. We believe that it is
essential that we resolve the payment
suspension determination before we
grant additional billing privileges to
these providers or suppliers. In concert
with § 405.372(c), once a payment
suspension has been terminated,
providers and suppliers may then apply
for billing privileges.
Moreover, we are obligated to recover
Medicare overpayments as
expeditiously as possible. Providers and
suppliers can pay the debt or Medicare
can reduce present or future Medicare
payments and applying the amount
withheld to the indebtedness. When we
identify an overpayment and provide
notice of the overpayment, physician
and NPP organizations and individual
practitioners are given an opportunity to
appeal the determination. Under certain
conditions the overpayment collection
process is suspended during the appeals
process. However, if the physician and
NPP organization or individual
practitioner does not appeal the
overpayment determination, the
overpayment determination is upheld
on appeal, we will initiate a recovery
action. However, in some cases,
physician and NPP organizations or
individual practitioners will try to
circumvent the recovery process by
seeking additional billing privileges and
billing under the new billing number.
Accordingly, we propose to add a new
§ 424.530(a)(6) and (a)(7) to deny
enrollment applications for additional
Medicare billing privileges if the
physician or NPP organization or
individual practitioner has an active
payment suspension or has an existing
overpayment that has not been repaid.
We are proposing that a Medicare FFS
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contractor be allowed to deny
enrollment applications from those
authorized officials, delegated officials,
owners, and individual practitioners
that own a supplier or provider at the
time of filing until such time as the
administrative action is terminated or
the Medicare overpayment has been
repaid in full. Specifically, we are
proposing to deny enrollment to any
current owner (as defined in § 424.502),
physician, or NPP, who is participating
in the Medicare program and is under
a current Medicare payment suspension.
We believe that the change to our
denial policy would help protect the
Medicare program from unscrupulous or
problematic physician and NPP
organizations and individual
practitioners. Moreover, this change
would allow—(1) Medicare FFS
contractors to improve customer service
to all providers and suppliers that are
already enrolled in the Medicare
program; (2) facilitate the enrollment of
all providers and suppliers seeking to
enroll in the Medicare program for the
first time; and (3) expand on existing
efforts to process changes in a timely
manner and provide better customer
service.
4. Reporting Requirements for Providers
and Suppliers (proposed § 424.516 and
§ 424.535(a)(10))
Currently, § 424.520(b) requires that
providers and suppliers, except
DMEPOS and IDTF suppliers, report to
CMS most changes to the information
furnished on the enrollment application
and furnish supporting documentation
within 90 calendar days of the change
(changes in ownership must be reported
within 30 days). As specified in
§ 424.57(c)(2), DMEPOS suppliers, have
only 30 calendar days to submit changes
of information to CMS. As specified in
§ 410.33(g)(2), IDTFs, must report
changes in ownership, changes in
location, changes in general
supervision, and adverse legal actions
within 30 calendar days. All other
changes to the enrollment application
must be reported within 90 days.
While physician and NPP
organizations and individual
practitioners are required to report
changes within 90 days of the reportable
event, in many cases, there is little or no
incentive for them to report a change
that may adversely affect their ability to
continue to receive Medicare payments.
For example, physician and NPP
organizations and individual
practitioners purposely may fail to
report a felony conviction or other
adverse legal action, such as a
revocation or suspension of a license to
a provider of health care by any State
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licensing authority, or a revocation or
suspension of accreditation, because
reporting this action may result in the
revocation of their Medicare billing
privileges. Thus, unless CMS or our
designated contractor becomes aware of
the conviction or adverse legal action
through other means, the change may
never be reported by a physician and
NPP organization or individual
practitioner. Alternatively, if CMS or
our designated contractor becomes
aware of the conviction or adverse legal
action after the fact, we lack the
regulatory authority to collect
overpayments for the period in which
the physician and NPP organizations
and individual practitioners should
have had their billing privileges
revoked.
Since we believe that physician and
NPP organizations and individual
practitioners must furnish updates to
their Medicare enrollment information
in a timely manner, we are proposing a
new § 424.516(d) which would establish
more stringent reporting requirements
for physician NPP organizations and
individual practitioners. (We are
proposing to redesignate § 424.520 as
§ 424.516 and amend the provisions in
new § 424.516.) In addition to a change
of ownership (as currently specified in
redesignated § 424.516(d)(1)(i)), we are
proposing to add § 424.516(d)(1)(ii) that
requires all physician and NPP
organizations and individual
practitioners to notify CMS’ designated
contractor of any adverse legal action
within 30 days. Adverse legal actions
include, but are not limited to, felonies,
license suspensions, and the Office of
the Inspector General (OIG) exclusion or
debarment. We believe that a physician
and NPP organizations and individual
practitioner’s failure to comply with the
reporting requirements within the time
frames described above may result in
the revocation of Medicare billing
privileges and a Medicare overpayment
from the date of the reportable change.
Specifically, we believe that an adverse
legal action may preclude payment, and
thus, establish an overpayment from the
date of the adverse action. As such, we
believe that physician and NPP
organizations and individual
practitioners should not be allowed to
retain any reimbursement they receive
after the adverse legal action.
We believe that it is essential that this
type of change be reported in a timely
manner (that is within 30 days). For
example, if CMS or our designated
contractor determines in February 2008
that a physician failed to notify
Medicare about an adverse legal action
that occurred on June 30, 2007, that
physician may be subject to an
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overpayment for all Medicare payments
beginning June 30, 2007 and have its
Medicare billing privileges revoked
effective retroactively back to June 30,
2007 as well.
Additionally, we are proposing to add
a requirement for change in location at
§ 424.516(d)(1)(iii). Since a change in
location may impact the amount of
payment for services rendered by
placing the physician and NPP
organizations and individual
practitioners into a new CBSA. We
believe that it is essential that physician
and NPP organizations and individual
practitioners report changes in practice
location including those that impact the
amount of payments they receive within
a timely period (that is, 30 days).
However, unlike an adverse legal action,
which may preclude all payments if
reported, failure to report a change in
practice location may impact the
amount of payment, not whether a
physician and NPP organizations and
individual practitioners may be eligible
to receive payments. Accordingly, we
believe that failing to report changes in
practice location would result in an
overpayment for the difference in
payment rates retroactive to the date the
change in practice location occurred
and may result in the revocation of
Medicare billing privileges. For
example, if a physician and NPP
organization moves its practice location
in New York, from urban Herkimer
County to Hamilton County or Lewis
County, which are both rural, but fails
to update its provider enrollment
information; then it would no longer be
able to receive the higher payment rate
associated with Herkimer County. We
believe that reporting these types of
changes is essential for making correct
and appropriate payments.
We are proposing to add
§ 424.535(a)(9) which would specify
that failure to comply with the reporting
requirements specified in § 424.516(d)
would be a basis for revocation.
Additionally, we are proposing in
§ 424.565(a), ‘‘Failure to comply with
the reporting requirements specified in
§ 424.516(d) would result in a Medicare
overpayment from the date of an
adverse legal action or a change in
practice location.’’ In this situation, an
overpayment for failure to timely report
these changes would be calculated back
to the date of the adverse legal action or
the date of the change in practice
location. Once an overpayment has been
assessed, we will follow the
overpayment regulations established at
42 CFR Part 405 subpart C. We
previously addressed these procedures
in Chapter 4 of the Medicare Financial
Management Manual (IOM Manual 100–
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06). Lastly, collection of overpayments
related to § 424.516(d)(1)(iii) would not
begin until after the effective date of the
final rule.
Since it is essential that physician and
NPP organizations and individual
practitioners notify their designated
contractor of these types of reportable
events in a timely manner and to ensure
that the provider or supplier continues
to be eligible for payment, we believe
that it is essential that we establish an
overpayment from the time of the
reportable event. We believe that
establishing an overpayment and
revocation of billing privileges for
noncompliance from the time of the
reportable event would provide the
supplier with a compelling incentive to
report reportable changes in the 30-day
reporting period.
In addition, if CMS or our designated
contractor determines that a physician
and NPP organization or an individual
practitioner has moved and has not
reported the reportable event within the
30-day reporting period, CMS or our
designated contractor would impose an
overpayment, if applicable, and revoke
billing privileges for a period of not less
than one year.
5. Maintaining Ordering and Referring
Documentation
We are proposing to add a new
§ 424.516(f) that would specify, ‘‘A
provider or supplier is required to
maintain ordering and referring
documentation, including the NPI,
received from a physician or eligible
NPP. Physicians and NPPs are required
to maintain written ordering and
referring documentation for 10 years
from the date of service.’’ We believe
that it is essential that providers and
suppliers maintain documentation
regarding the specific service ordered or
referred to a Medicare beneficiary by a
physician or NPP as defined in section
1842(b)(18)(c) of the Act (which
includes but is not limited to nurse
practitioners, and physician assistants).
We believe that ordering and referring
documentation maintained by a
provider or supplier must match the
information on the Medicare claims
form. Additionally, we are proposing to
add § 424.535(a)(10) that would state
that failure to comply with the
documentation requirements specified
in § 424.516(f) as a reason for
revocation. For example, a lab submits
a claim with Dr. Smith’s NPI
(1234512345) in the ordering and
referring section of the claim form. The
number submitted on the claim form
should match the documentation in the
provider or supplier’s records. In
addition, we are codifying the
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requirement to maintain ordering and
referring documentation as required in
the Medicare Program Integrity Manual
(PIM) Publication 100–08, Chapter 5.
While the PIM currently requires that
providers and suppliers maintain
ordering and referring documentation
for 7 years from the date of payment, we
believe that the industry generally
maintains documentation from the date
of service. Accordingly, since there may
be a delay in claims payment for up to
27 months from the date of service, we
believe that it would be administratively
less burdensome for providers and
suppliers to maintain ordering and
referring documentation for 10 years
from the date of service, rather than
requiring providers and suppliers to
maintain ordering and referring
documentation associated with the date
of payment.
We maintain that a provider or
supplier should retain the necessary
ordering and referring documentation
received from physicians and NPPs as
defined in section 1842(b)(18)(c) of the
Act to assure themselves that coverage
criterion for an item has been met. If the
information in the patient’s medical
record does not adequately support the
medical necessity for the item, the
supplier would be liable for the dollar
amount involved unless a properly
executed Advance Beneficiary Notice of
possible denial has been obtained.
6. Revocation of Enrollment and Billing
Privileges in the Medicare Program
(proposed § 424.535(g))
Historically, we have allowed
providers and suppliers whose
Medicare billing numbers have been
revoked to continue billing for services
furnished prior to revocation for up to
27 months after the effective date of the
revocation. Since we believe this
extensive billing period poses
significant risk to Medicare program, we
are proposing to limit the claims
submission timeframe after revocation.
In § 424.535(g), we are proposing that
revoked physician and NPP
organizations and individual
practitioners, including physicians and
NPPs, must submit all outstanding
claims not previously submitted within
30 calendar days of the revocation
effective date. We maintain that this
change is necessary to limit the
Medicare program exposure to future
vulnerabilities from physician and NPP
organizations and individual
practitioners that have had their billing
privileges revoked. We know that some
physician and NPP organizations and
individual practitioners are able to
create false documentation to support
claims payment. Accordingly, this
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38539
proposed change would allow a
Medicare contractor to conduct focused
medical review on the claims submitted
during the claims filing period to ensure
that each claim is supported by medical
documentation that the contractor can
verify. We maintain that focused
medical review of these claims will
ensure that Medicare only pays for
furnished services by a physician
organization or individual practitioner
and that these entities and individuals
receive payment in a timely manner.
Since a physician organization or
individual practitioner generally submit
claims on a nexus to the date of service,
we believe that this proposed change
will not impose a significant burden on
physician organizations or individual
practitioners. In addition, we are also
proposing to add § 424.44(a)(3) to
account for this provision related to the
requirements for the timely filing of
claims.
7. Technical Changes to Regulations
Text
We propose to make the following
technical changes:
• Existing § 424.510(d)(8) would be
redesignated as § 424.517. This
proposed revision would separate our
ability to conduct onsite reviews from
the provider and supplier enrollment
requirements.
• Existing § 424.520 would be revised
and redesignated as § 424.516. This
proposed redesignation would move the
additional provider and supplier
enrollment requirements so that these
requirements immediately follow the
provider and supplier enrollment
requirements.
• In new § 424.520, we would specify
the effective dates for Medicare billing
privileges for the following entities:
Surveyed, certified, or accredited
providers and suppliers; IDTFs; and
DMEPOS suppliers.
• In § 424.530, the phrase ‘‘in the
Medicare program’’ would be added to
the section heading to remain consistent
with other headings in the subpart.
K. Proposed Amendment to the
Exemption for Computer-Generated
Facsimile Transmission From the
National Council for Prescription Drug
Programs (NCPDP) SCRIPT Standard for
Transmitting Prescription and Certain
Prescription-Related Information for
Part D Eligible Individuals
[If you choose to comment on issues
in this section, please include the
caption ‘‘COMPUTER-GENERATED
FAX TRANSMISSIONS’’ at the
beginning of your comments.]
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1. Legislative History
Section 101 of the MMA amended
title XVIII of the Act to establish a
voluntary prescription drug benefit
program. Prescription Drug Plan (PDP)
sponsors and Medicare Advantage (MA)
organizations offering Medicare
Advantage-Prescription Drug Plans
(MA-PDs) and other Medicare Part D
sponsors are required to establish
electronic prescription drug programs to
provide for electronic transmittal of
certain information to the prescribing
provider and dispensing pharmacy and
dispenser. This includes information
about eligibility, benefits (including
drugs included in the applicable
formulary, any tiered formulary
structure and any requirements for prior
authorization), the drug being
prescribed or dispensed and other drugs
listed in the medication history, as well
as the availability of lower cost,
therapeutically appropriate alternatives
(if any) for the drug prescribed. Section
101 of the MMA established section
1860D–4(e)(4)(D) of the Act, which
directed the Secretary to issue uniform
standards for the electronic
transmission of such data.
There is no requirement that
prescribers or dispensers implement eprescribing. However, prescribers and
dispensers who electronically transmit
prescription and certain other
prescription-related information for
covered drugs prescribed for Medicare
Part D eligible individuals, directly or
through an intermediary, are required to
comply with any applicable final
standards that are in effect. For a
complete discussion of the statutory
basis for the e-prescribing portions of
this proposed rule and the statutory
requirements at section 1860D–4(e) of
the Act, please refer to the
‘‘Background’’ section of the EPrescribing and the Prescription Drug
Program proposed rule published in the
February 4, 2005 Federal Register (70
FR 6256)
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2. Regulatory History
a. Foundation Standards and Exemption
for Computer-Generated Facsimiles
(Faxes)
In the E-Prescribing and the
Prescription Drug Program final rule (70
FR 67568, November 7, 2005), we
adopted the National Council for
Prescription Drug Programs (NCPDP)
SCRIPT standard, Implementation
Guide, Version 5, Release 0 (Version
5.0), May 12, 2004, excluding the
Prescription Fill Status Notification
Transaction (and its three business cases
which include the following:
Prescription Fill Status Notification
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Transaction-Filled; Prescription Fill
Status Notification Transaction-Not
Filled; and Prescription Fill Status
Notification Transaction-Partial Fill)
hereafter referred to as ‘‘NCPDP SCRIPT
5.0,’’ as the standard for communicating
prescriptions and prescription-related
information between prescribers and
dispensers. Subsequently, in the June
23, 2006 Federal Register (71 FR
36020), we published an interim final
rule with comment period (IFC) that
maintained NCPDP SCRIPT 5.0 as the
adopted standard, but allowed for the
voluntary use of a subsequent backward
compatible version of the standard,
NCPDP SCRIPT 8.1. In the April 7, 2008
Federal Register , we published a final
rule (73 FR 18918) that finalized the
June 23, 2006 IFC; effective April 1,
2009, we will retire the NCPDP SCRIPT
5.0 and adopt NCPDP SCRIPT 8.1 as the
standard. Hereafter we refer to these
standards as ‘‘NCPDP SCRIPT.’’
The November 7, 2005 final rule also
established an exemption to the
requirement to utilize the NCPDP
SCRIPT standard for entities that
transmit prescriptions or prescriptionrelated information for Part D covered
drugs prescribed for Part D eligible
individuals by means of computergenerated facsimiles (faxes generated by
one computer and electronically
transmitted to another computer or fax
machine which prints out or displays an
image of the prescription or
prescription-related information).
Providers and dispensers who use this
technology are not compliant with the
NCPDP SCRIPT standard. The
exemption was intended to allow such
providers and dispensers time to
upgrade to software that utilizes the
NCPDP SCRIPT standard, rather than
forcing them to revert to paper
prescribing.
b. Amendment of Exemption
In the CY 2008 PFS proposed rule (72
FR 38194), we proposed to revise
§ 423.160(a)(3)(i) to eliminate the
computer-generated fax exemption to
the NCPDP SCRIPT standard for the
communication of prescription or
certain prescription-related information
between prescribers and dispensers for
the transactions specified in
§ 423.160(b)(1)(i) through (xii).
Since computer-generated faxing
retains some of the disadvantages of
paper prescribing (for example, the
administrative cost of keying the
prescription into the pharmacy system
and the related potential for data entry
errors that may impact patient safety),
we believed it was important to take
steps to encourage prescribers and
dispensers to move toward use of
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NCPDP SCRIPT. We believed the
elimination of the computer-generated
fax exemption would encourage
prescribers and dispensers using this
computer-generated fax technology to,
where available, utilize true eprescribing (electronic data interchange
using the NCPDP SCRIPT standard)
capabilities.
We also believed that it might
encourage those without such
capabilities to upgrade their current
software products, or, where upgrades
are not available, to switch to new
products that would enable true eprescribing. In addition, because the
elimination of the computer-generated
facsimile exemption would encourage
those prescribers that are already using
e-prescribing software that is capable of
true e-prescribing to utilize those
capabilities, we believed that the
elimination of the computer-generated
fax exemption would increase the
number of NCPDP SCRIPT transactions
fairly significantly in a relatively short
time period, and that this could, in turn,
create a ‘‘tipping point’’ that could
create economic incentives for
independent pharmacies to adopt
NCPDP SCRIPT capable software to
begin to exchange true e-prescribing
transactions with their prescriber
partners.
We proposed to eliminate the
computer-generated fax exemption
effective 1 year after the effective date
of the CY 2008 PFS final rule (that is,
January 1, 2009). We believed that this
would provide sufficient notice to
prescribers and dispensers who would
need to implement or upgrade eprescribing software to look for products
and upgrades that are capable of
generating and receiving transactions
that utilize NCPDP SCRIPT. It would
also afford current e-prescribers time to
work with their trading partners to
eventually eliminate computer-to-fax
transactions. We also believed the
elimination of the exemption for
computer-generated faxing would
encourage e-prescribers and dispensers
to move as quickly as possible to use of
the NCPDP SCRIPT standard with what
we perceived to be minimal impact.
We solicited comments on the impact
of the proposed elimination of this
exemption. Several commenters
concurred with our proposal to
eliminate the exemption for computergenerated faxes. The commenters
indicated that lifting the exemption for
computer-generated faxes would act as
an incentive to move prescribers and
dispensers toward true e-prescribing
(electronic data interchange using the
NCPDP SCRIPT standard). Less than
half of the commenters disagreed with
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our proposal to eliminate the
exemptions for computer-generated
faxes, citing concerns about increased
hardware/software costs, transaction
fees, certification and other activation
costs. Some commenters agreed that
many prescribers who are already eprescribing likely already possessed the
ability to generate NCPDP SCRIPT
compliant transactions using their
software or could comply by obtaining
a version upgrade under their
maintenance agreements. Many
commenters suggested that we continue
to allow for the use of computergenerated faxes in the case of
transmission failure and network
outages.
During the CY 2008 PFS proposed
rule comment period, we received
several comments that indicated that the
elimination of the exemption could be
problematic in certain e-prescribing
transactions, namely prescription refill
requests, but only one of those
commenters offered substantiation to
support this assertion. Absent receipt of
substantial industry feedback on the
impact of the elimination of computergenerated facsimiles on prescription
refill requests, and not considering these
comments about prescription refill
requests to constitute widespread
concern regarding the prescription refill
request function, in the CY 2008 PFS
final rule with comment period (72 FR
66396), we amended the exemption to
permit the use of computer-generated
facsimiles only in cases of temporary or
transient network transmission failures.
Taken in the aggregate, we determined
that the 1-year time period was adequate
time during which providers and
dispensers would have the opportunity
to convert to conducting true eprescribing and that costs would be
mitigated due to the growing volume of
e-prescriptions and practice of eprescribing, with a commensurate
reduction in transmission, software and
other costs during that 1-year time
period. These changes were to become
effective in January 2009.
3. Proposal
Following the publication of the CY
2008 PFS final rule with comment
period, we received additional
information regarding how the
elimination of the exemption for
computer-generated faxes would
adversely impact the electronic
transmission of prescription refill
requests. These commenters relayed that
the elimination of the exemption would
force dispensers who e-prescribe and
use these transactions to revert to paper
prescribing. These commenters
substantiated their assertions by
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providing us with more specific
information regarding the economic and
workflow impacts associated with the
elimination of computer-generated faxes
that was not forthcoming in the prior
public comment period for the proposed
rule. We also received unsolicited
comments on this issue during the
comment period for the November 16,
2007 proposed rule (72 FR 64900). In
light of this new information, we are
now re-examining this issue in this
proposed rule.
Dispensers have indicated that they
use computer-generated facsimiles for
the majority of prescription refill
requests, in particular when
communicating with prescribers that
have not adopted e-prescribing.
Currently, regardless of how the initial
prescription was received by the
pharmacy (that is, orally, via eprescribing, telephone, paper, or fax)
nearly all prescription refill requests
from chain pharmacies to prescribers
are sent electronically, either via an eprescribing application or via computergenerated facsimile. When a
prescription is received by a dispenser
electronically, the prescription refill
request is sent to the prescriber via the
same technology. However, where the
dispenser knows that the prescriber
lacks e-prescribing capability or has not
activated it, or where the prescriber
does not respond to the request sent to
his or her prescribing device, the
prescription refill request is sent or resent via computer-generated facsimile.
Commenters stated that the vast
majority of computer-generated
facsimiles sent today from prescribers to
pharmacies are not electronic data
interchange (EDI) transmissions, but
usually prescription refill requests sent
from pharmacies to prescribers who do
not conduct true e-prescribing and, in
many cases, do not engage in any
electronic transactions at all. One
national drug store chain estimates that
it produces approximately 150,000
computer-generated facsimile
prescription refill requests every day.
The workflow and process for filling
prescription would be significantly
disrupted if these computer-generated
facsimile transmissions were prohibited.
Dispensers and other staff would be
forced to revert back to making phone
calls or using a stand-alone facsimile
machine to contact prescribers each
time a refill is requested. Commenters
indicated that not only is this
counterproductive to the advances and
efficiencies made in pharmacy practice,
it would impose an undue
administrative burden on dispensing
pharmacies and pharmacists.
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38541
In light of this additional information
regarding the larger than anticipated
impact of the elimination of computer—
generated facsimiles for the prescription
refill request transaction, we propose to
further amend the computer-generated
facsimile exemption to also allow for an
exemption from the NCPDP SCRIPT
standards for electronic prescription
refill request transactions that are
conducted by computer-generated
facsimiles when the prescriber is
incapable of receiving electronic
transmissions using the NCPDP SCRIPT
standard. We propose to retain the
current exemption in instances of
temporary network transmission
failures. We propose that this change
will be effective January 1, 2009. We
will periodically revisit the exemption
for the purpose of ultimately
eliminating it for the prescription refill
request transaction as described in
§ 423.160(b)(1)(vii), and solicit
comments regarding what constitutes an
adequate time to allow the industry to
transition to the use of the NCPDP
SCRIPT standard.
We are also soliciting comments on
the impact of the proposed exclusion of
the prescription refill request
transaction from this exemption.
Specifically, we are soliciting
information on any other e-prescribing
transaction that may be similarly
adversely impacted by the elimination
of computer-generated facsimiles. As
the use of e-prescribing increases, the
need for computer-generated facsimiles
in Part D e-prescribing would decrease,
except in cases of temporary or transient
network transmission failures. We
believe that this proposal to allow
computer-generated facsimiles for the
prescription refill request transaction,
and in cases of network transmission
failures, would not slow the ongoing
adoption of e-prescribing using NCPDP
SCRIPT enabled transactions, and that
the industry should continue to move as
quickly as possible to use of the NCPDP
SCRIPT standard.
L. Comprehensive Outpatient
Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘CORF AND REHABILITATION
ISSUES’’ at the beginning of your
comments.]
Comprehensive outpatient
rehabilitation facilities (CORFs) and
rehabilitation agencies are Medicare
providers that are certified to provide
certain rehabilitation services. Currently
covered CORF clinical services and
rehabilitation agency services are paid
through the PFS.
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In the CY 2008 PFS final rule with
comment period (72 FR 66222 and
66399), we revised the CORF
regulations at 42 CFR parts 410 and 413
to ensure that the regulations reflected
the statutory requirements applicable to
CORFs under sections 1834(k) and
1861(cc) of the Act. Many of these
changes were technical in nature.
Specifically, the regulatory changes: (1)
Revised the definitions of physicians’
services, respiratory therapy services,
social services and psychological
services, nursing services, drugs and
biologicals, and supplies and durable
medical equipment and home
environment evaluation; (2) amended
the payment provisions for CORF
services; and (3) made other
clarifications and changes to the
conditions for coverage for CORF
services.
In this CY 2009 PFS proposed rule,
we address the comments received in
response to the CY 2008 final rule with
comment (72 FR 66222), as well as add
new provisions and revise some
provisions. We welcome your comments
on all of these proposed changes.
1. Personnel Qualifications
We stated in the CY 2008 PFS final
rule with comment period that we
would propose updated qualifications
for respiratory therapists in future
rulemaking (72 FR 66297). It has been
our policy that only the respiratory
therapist (and not the respiratory
therapy technician), who possesses the
educational qualifications necessary to
provide the level of respiratory therapy
services required, is permitted to
provide respiratory therapy in a CORF
setting.
In the CY 2008 PFS final rule with
comment period, we received a
comment indicating that our regulations
were outdated and did not conform to
current respiratory therapy professional
standards. The American Association
for Respiratory Care (AARC) believes
that the terms ‘‘certified respiratory
therapist (CRT)’’ and the ‘‘registered
respiratory therapist (RRT)’’ have
replaced the terms ‘‘respiratory therapy
technician’’ and ‘‘respiratory therapist,’’
respectively. In addition, the
qualifications for CRTs and RRTs differ
from those applicable to respiratory
therapy technicians and respiratory
therapists. The CRT designation is
awarded after an individual successfully
passes the entry-level respiratory
therapy examination. In order to be
eligible for the RRT examination, an
individual must be a graduate of an
advanced level respiratory therapy
educational program and have obtained
the RRT credential.
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For CY 2009, we are proposing to
revise § 485.70(j)—setting forth the
personnel qualifications for respiratory
therapists in CORFs— to be consistent
with current qualification requirements
for RRTs, as recommended by the
AARC.
We are also proposing to delete
§ 485.70(k), which sets forth personnel
qualifications for CRTs (previously
referred to as respiratory therapy
technicians) in CORFs. In the past, we
have not reimbursed CORFs for
respiratory therapy services provided by
respiratory therapy technicians or CRTs,
and we believe that removing the
technician definition would clarify our
position. We believe that current
medical standards continue to require
that the provision of skilled respiratory
therapy services to patients in the CORF
setting be furnished by RRTs. While
CRTs furnish general respiratory care
procedures and may assume some
clinical responsibility for specified
respiratory care modalities involving the
application of therapeutic techniques
under the supervision of an RRT or a
physician, the educational
qualifications that a RRT possesses
allow him or her to evaluate, treat, and
manage patients of all ages with
respiratory illnesses. RRTs participate in
patient education, implement
respiratory care plans, apply patientdriven protocols, follow evidence-based
clinical practice guidelines, and
participate in health promotion, disease
prevention, and disease management.
RRTs also may be required to exercise
considerable independent judgment.
This was implemented in the CY 2002
PFS final rule with comment period (66
FR 55246 and 55311) and the CY 2003
PFS final rule with comment period (67
FR 79966 and 79999) when we
developed and discussed G codes,
CORF respiratory therapy services, and
specifically recognized the RRT as the
appropriate level of personnel to
provide these CORF services. Finally,
the CORF regulations at § 485.58(d)(4)
state that as a condition of participation
for CORFs, CORF personnel must meet
the qualifications described at § 485.70.
For CY 2009, to maintain consistency
in the conditions of participation for
both CORFs, home health agencies
(HHAs), and other outpatient service
providers, we are proposing to amend
the material addressing personnel
qualifications in § 485.70. Specifically,
we are amending paragraphs § 485.70(c)
and § 485.70(e) by referencing the
personnel qualifications for HHAs at
§ 484.4. This change would align CORF
personnel requirements not only with
HHA requirements, but also with other
regulations in Part 485 addressing
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provision of physical therapy, speechlanguage pathology, and occupational
therapy services. We welcome your
comments on these proposed changes.
Also, at 485.58(a)(1)(i), we propose to
amend the duties of a CORF physician
to include medical supervision of
nonphysician staff. This change
conforms to changes made to the CORF
conditions for coverage in the CY 2008
PFS final rule with comment period. We
believe that adding medical supervision
of nonphysician staff to the duties of
CORF physicians more accurately
reflects the duties and responsibilities of
the CORF physician. We also believe
that this change could increase the
quality of care provided to patients of
CORFs. We welcome your comments on
this proposed change.
2. Social and Psychological Services
In the CY 2008 PFS final rule with
comment period (72 FR 66297), we
clarified that all CORF services,
including social and psychological
services, must directly relate to or
further the rehabilitation goals
established in the physical therapy,
occupational therapy, speech-language
pathology, or respiratory therapy plan of
treatment. We believe that using a full
range of clinical social and
psychological CPT codes to describe
CORF social and psychological services
is inappropriate because social and
psychological CORF services do not
include independent clinical treatment
of mental, psychoneurotic, and
personality disorders. CPT codes 96150
through 96154 and CPT code range
90801 through 90899 are inappropriate
for CORF use because all of these CPT
codes represent full-scale clinical
treatment for these disorders. As we
stated last year, we believe that for
purposes of providing care in a CORF,
social and psychological services should
represent only case management and
patient assessment components as they
relate to the rehabilitation treatment
plan (72 FR 66297 through 66298).
Consequently, after notice and
comment, we changed our policy and
payment for CORF social and
psychological services; these services
may no longer address a CORF patient’s
mental health diagnoses except insofar
as they relate directly to other services
provided by the CORF.
We specified in the CY 2008 final rule
with comment period (72 FR 66298) that
only the CPT code 96152 for health and
behavior intervention (with the patient)
could be used to bill for CORF social
and psychological services. This code is
part of a series of codes that was created
by CPT in 2002 to address health and
behavior assessment issues. These
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services are offered to patients who
present with established illnesses or
symptoms, who are not diagnosed with
mental illness, and may benefit from
evaluations that focus on the
biopsychosocial factors related to the
patient’s physical health status, such as
patient adherence to medical treatment,
symptom management and expression,
health-promoting behaviors, healthrelated risk-taking behaviors, and
overall adjustment to medical illness.
We also adopted the more limited
definition of CORF social and
psychological services, in our revised
regulations at § 410.100(h) (72 FR
66399). The regulations state that, social
and psychological services include the
assessment and treatment of an
individual’s mental and emotional
functioning and the response to and rate
of progress as it relates to the
individual’s rehabilitation plan of
treatment, including physical therapy
services, occupational therapy services,
speech-language pathology services and
respiratory therapy services.
We also noted that a HCPCS G-code
could more accurately describe these
unique CORF services, but believed that
it was inappropriate to create such a Gcode in the final rule with comment
period without first proposing to do so
in proposed rulemaking.
Therefore, for CY 2009, we are
proposing to create a CORF specific Gcode, GXXX5, Social work and
psychological services, directly relating
to and/or furthering the patient’s
rehabilitation goals, each 15 minutes,
face-to face; individual (services
provided by a CORF-qualified social
worker or psychologist in a CORF), to
accurately describe the unique social
and psychological services provided by
CORF staff and to establish appropriate
payment for these services. We propose
to use salary and wage data from the
Bureau of Labor and Statistics to
institute a blended social worker/
psychologist clinical labor category
using a price per minute rate of $0.45
for the practice expense component of
GXXX5. We would assign a malpractice
RVU of 0.01. Because the services
described by GXXX5 are solely
furnished by a CORF social worker or
clinical psychologist, and not by a
physician, we would not allocate a work
RVU for these services.
We also propose to revise § 410.100(h)
to delete the reference to ‘‘and
treatment.’’ As discussed above and in
the CY 2008 PFS final rule with
comment period (72 FR 66297), we
believe all CORF services, including
social and psychological services, must
directly relate to or further the
rehabilitation goals established in the
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physical therapy, occupational therapy,
speech-language pathology, or
respiratory therapy plan of treatment.
Accordingly, social and psychological
CORF services do not include clinical
treatment of mental, psychoneurotic,
and personality disorders. We are
concerned that the phrase ‘‘and
treatment’’ currently included in the
definition of CORF social and
psychological services may be
misconstrued to include social and
psychological services for the
independent clinical treatment of
mental illness. Therefore, we propose to
delete this language in order to clarify
that only those social and psychological
services that relate directly to a
rehabilitation plan of treatment and the
associated rehabilitation goals are
considered CORF social and
psychological services.
We also propose to remove
§ 410.155(b)(1)(ii) regarding the
application of mental health limitations
to CORF social and psychological
services. As stated, CORF services,
including social and psychological
services, must directly relate to or
further the rehabilitation goals
established in the physical therapy,
occupational therapy, speech-language
pathology, or respiratory therapy plan of
treatment. In the CY 2008 PFS final rule
with comment period (72 FR 66400), we
stated that CORF services must be
furnished under a written plan of
treatment that indicates the diagnosis
and rehabilitation goals, and prescribes
the type, amount, frequency, and
duration of the skilled rehabilitation
services, including physical therapy,
occupational therapy, speech-language
pathology and respiratory therapy
services. Section 410.155(b) specifies
that the mental health payment
limitation applies when there is a
diagnosis of mental, psychoneurotic,
and personality disorders (mental
disorders identified by a diagnosis code
within the range of 290 through 319)
prior to beginning services. Under our
revised definition, CORF social and
psychological services must directly
relate to the physical therapy or other
rehabilitation plan of treatment and its
associated goals. Since these patients
are receiving CORF services because
they have a need for skilled
rehabilitation services, any social and
psychological services provided in a
CORF under § 410.100(h) must include
an assessment of the individual’s mental
and emotional functioning exclusively
as such functioning relates to their
rehabilitation plan of treatment. In our
view, such services provided in a CORF
are not ‘‘treatment of mental,
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psychoneurotic, and personality
disorders of an individual’’ as set out in
section 1833(c) of the Act, so that the
statutory mental health payment
limitations do not apply. We are
proposing changes to § 410.155(b) to
reflect our view regarding the limited
nature of these services.
3. CORF Conditions of Participation
In the CY 2008 final rule with
comment period (72 FR 66400), we
finalized changes to the CORF coverage
and payment rules. However, all
conforming regulations in the CORF
Conditions of Participation (CoPs) were
not updated at that time.
We are proposing to revise
§ 485.58(e)(2). Section 485.58(e)
currently provides that as a CoP, a
CORF facility must provide all CORF
services on its premises with the
exception of— (1) physical therapy,
occupational therapy, and speechlanguage pathology services furnished
away from the premises of the CORF, if
Medicare payment is not otherwise
made for these services; and (2) a single
home visit for the purpose of evaluating
the potential impact of the patient’s
home environment on the rehabilitation
goals. We are proposing to clarify that
the alternate premises for provision of
physical therapy, occupational therapy,
and speech-language pathology services
may be the patient’s home.
4. Extension Location
We are proposing to add a definition
for an ‘‘extension location’’ of a
rehabilitation agency to the definitions
at § 485.703. While there are currently
no provisions that allow rehabilitation
agencies to offer services in an
extension location, there are currently
2,875 rehabilitation agency primary
locations and 2,486 rehabilitation
agency offsite practice locations. While
our State Operations manual recognizes
that these rehabilitation agency
extension locations exist, it also
includes language stating that the
extension locations must meet
applicable rehabilitation agency CoPs.
However, it is difficult to apply CoP
requirements to a location that currently
is not identified in the CoPs. Creating a
definition in the CoPs that applies to the
extension locations will allow us to
survey and monitor the care provided in
these extension locations on a
consistent basis.
Therefore, we propose to define an
extension location as: (1) A location or
site from which a rehabilitation agency
provides services within a portion of the
total geographic area served by the
primary site; (2) is part of the
rehabilitation agency; and (3) is located
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sufficiently close to share
administration, supervision, and
services in a manner that renders it
unnecessary for the extension location
to independently meet the conditions of
participation as a rehabilitation agency.
We welcome your comments on this
proposed definition.
sroberts on PROD1PC70 with PROPOSALS
5. Emergency Care
We are proposing to revise
§ 485.711(c), Standard: Emergency care,
to reflect current medical practice. We
propose to remove the requirement that
the rehabilitation agency provide for
one or more doctors of medicine or
osteopathy to be available on call to
furnish necessary medical care in case
of an emergency. We do not believe that
the patients serviced by rehabilitation
agencies regularly experience medical
emergencies that necessitate the
retention of an on-call physician.
Therefore, we are proposing the
revised standard to require each
rehabilitation agency to establish
procedures to be followed by personnel
in an emergency to cover immediate
care of the patient, persons to be
notified, and reports to be prepared. We
are soliciting comments on this
proposal.
6. Technical Changes for Rehabilitation
Agencies
Under section 1861(p) of the Act,
rehabilitation agencies are tasked with
furnishing outpatient physical therapy
and speech-language pathology services.
Unlike CORFs, which provide
comprehensive outpatient rehabilitation
services, rehabilitation agencies
primarily provide physical therapy
services. Some of the other services
offered by CORF, such as respiratory
therapy and social services are outside
the scope of rehabilitation agency
practice.
The current definition of
rehabilitation agency at § 485.703
(paragraph (2)(ii) of the definition)
requires that rehabilitation agencies
provide social or vocational adjustment
services. This requirement is outside of
the rehabilitation agency’s scope of
practice and has caused confusion for
these providers because we do not
reimburse rehabilitation agencies for
furnishing social or vocational services.
Accordingly, in § 485.703, we are
proposing to delete the requirement in
paragraph (2)(ii) of the rehabilitation
agency definition requiring a
rehabilitation agency to provide social
or vocational services. We are also
proposing to make a conforming change
at § 485.717.
At § 485.711(b)(3), we are proposing
to remove the reference to § 410.61(e),
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since § 410.61(e) no longer exists in
regulation.
M. Technical Corrections for TherapyRelated Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘THERAPY-RELATED ISSUES’’
at the beginning of your comments.]
We are proposing the following
technical changes to the regulations
concerning therapy services:
• In § 409.17(a), we are proposing to
delete the reference to paragraph
(a)(1)(ii) which no longer exists.
• In § 409.23, we are proposing to
revise the title of this section from
‘‘Physical, occupational and speech
therapy’’ to ‘‘Physical therapy,
occupational therapy and speechlanguage pathology services.’’
N. Physician Self-Referral and AntiMarkup Issues
[If you choose to comment on issues
in this section, please include the
caption ‘‘PHYSICIAN SELF-REFERRAL
AND ANTI-MARKUP ISSUES’’ at the
beginning of your comments.]
1. Changes to Reassignment Rules
Related to Diagnostic Tests (AntiMarkup Provision)
a. CY 2008 PFS Final Rule With
Comment Period
The CY 2008 PFS final rule with
comment period (72 FR 66222)
amended the anti-markup provision in
§ 414.50 for certain diagnostic tests. We
revised the anti-markup provision to
apply to the technical component (TC)
of diagnostic tests that are ordered by
the billing physician or other supplier
(or ordered by a party related by
common ownership or control to such
physician or other supplier), when the
TC is outright purchased or when the
TC is not performed in the office of the
billing physician or other supplier. We
also imposed an anti-markup provision
on the professional component (PC) of
diagnostic tests that are ordered by the
billing physician or other supplier (or
ordered by a party related by common
ownership or control to such physician
or other supplier group), if the PC is
outright purchased or if the PC is not
performed in the office of the billing
physician or other supplier. The antimarkup provision in § 414.50 applies to
the TCs and PCs of diagnostic tests
covered under section 1861(s)(3) of the
Act and paid for under 42 CFR part 414
(other than clinical diagnostic
laboratory tests paid under section
1833(a)(2)(D) of the Act, which are
subject to the special billing rules set
forth in section 1833(h)(5)(A) of the
Act). If a physician or other supplier
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bills for the TC or PC of a diagnostic test
that was ordered by the physician or
other supplier (or ordered by a party
related to such physician or other
supplier through common ownership or
control) and the diagnostic test is either
purchased from an outside supplier or
performed at a site other than the office
of the billing physician or other
supplier, the payment to the billing
physician or other supplier (less the
applicable deductibles and coinsurance
paid by the beneficiary or on behalf of
the beneficiary) for the TC or PC of the
diagnostic test may not exceed the
lowest of the following amounts:
• The performing supplier’s net
charge to the billing physician or other
supplier.
• The billing physician or other
supplier’s actual charge, or
• The fee schedule amount for the
test that would be allowed if the
performing supplier billed directly.
In revised § 414.50(a)(2)(iii), we
defined the ‘‘office of the billing
physician or other supplier’’ as medical
office space where the physician or
other supplier regularly furnishes
patient care. For a billing physician or
other supplier that is a physician
organization (as defined at § 411.351 of
this chapter), the ‘‘office of the billing
physician or other supplier’’ is space in
which the physician organization
provides substantially the full range of
patient care services that the physician
organization provides generally. (For
purposes of the anti-markup provision,
the office of a billing physician or other
supplier has its common meaning—that
is, it is space in which the physician or
other supplier regularly furnishes
patient care services, and does not
include a ‘‘centralized building’’ as
defined at § 411.351).
We effectuated our changes primarily
by modifying § 414.50, although we also
modified § 424.80 by adding paragraph
(d)(3) to alert the reader that, in a case
of the reassignment of the TC and/or PC
of a diagnostic test, the reader should
consult § 414.50 to investigate whether
the anti-markup provision applies to the
TC and/or PC. We also amended the
definition of ‘‘entity’’ at § 411.351 to
exclude a physician’s practice when it
bills Medicare for the PC of a diagnostic
test in accordance with § 414.50. (Prior
to the CY 2008 PFS final rule with
comment period, the definition of
‘‘entity’’ at § 411.351 excluded a
physician’s practice when it bills
Medicare for the TC of a diagnostic test
in accordance with § 414.50.)
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b. Revisions to Payment Policies Under
the Physician Fee Schedule, and Other
Part B Payment Policies for CY 2008;
Delay of the Date of Applicability of the
Revised Anti-Markup Provision for
Certain Services Furnished in Certain
Locations (§ 414.50) Final Rule (73 FR
404)
Subsequent to the publication of the
CY 2008 PFS final rule with comment
period (72 FR 66222), we received
informal comments from various
stakeholders that stated that the
application of the rule was unclear with
respect to whether certain types of space
arrangements meet the definition of the
‘‘office of the billing physician or other
supplier.’’ Further, some of these
stakeholders stated that patient access
may be significantly disrupted due to
the alleged inability of physician groups
to render services in a cost-effective
manner if medical office space that
satisfies the ‘‘same building’’ test in
§ 411.355(b)(2)(i) of this chapter for
purposes of the physician self-referral
rules in Part 411, Subpart J of this
chapter, and other medical office space
in which patients are seen and that
complies with the physician self-referral
rules, are subject to the anti-markup
provision in revised § 414.50. That is,
physician groups stated that, in
situations in which they are subject to
the anti-markup provision and are
limited to billing Medicare the net
charge imposed by the performing
supplier, they will not be able to
continue to provide diagnostic testing
services to the same extent that they are
currently providing such services,
because they will not be able to recoup
their overhead costs.
We were concerned that the definition
of ‘‘office of the billing physician or
other supplier’’ may not have been
entirely clear and that it could have
unintended consequences. Accordingly,
in order for us to study the issues
further, we issued a final rule entitled
‘‘Revisions to Payment Policies Under
the Physician Fee Schedule, and Other
Part B Payment Policies for CY 2008;
Delay of the Date of Applicability of the
Revised Anti-Markup Provisions for
Certain Services Furnished in Certain
Locations (§ 414.50)’’ (the ‘‘Delay
Rule’’), which delayed, until January 1,
2009, the applicability of the revised
anti-markup provision in § 414.50,
except for anatomic pathology
diagnostic testing services furnished in
space that: (1) Is utilized by a physician
group practice as a ‘‘centralized
building’’ for purposes of complying
with the physician self-referral rules;
and (2) does not qualify as a ‘‘same
building’’ under § 411.355(b)(2)(i) (73
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FR 404). We stated that, during this
period, we planned to issue clarifying
guidance as to what constitutes the
‘‘office of the billing physician or other
supplier’’ or propose additional
rulemaking, or both. Because anatomic
pathology diagnostic testing
arrangements precipitated our proposal
for revision of the anti-markup
provision and remained our core
concern, we did not delay the date of
applicability with respect to anatomic
pathology diagnostic testing services
furnished in certain space (as described
above). In addition, we did not delay the
applicability of the revised anti-markup
rule for the TC of any purchased
diagnostic test. The anti-markup
prohibition for the TC of purchased
diagnostic tests is longstanding and was
incorporated into the expanded and
revised provisions of § 414.50.
Accordingly, the regulation remained
applicable to the TC of any purchased
diagnostic test.
c. Challenge to the CY 2008 PFS Final
Rule With Comment Period and the
Subsequent Delay of the Date of
Applicability Final Rule
On January 25, 2008, a group of
plaintiffs filed suit against the Secretary
(Atlantic Urological Associates PA v.
Leavitt, Civil Action No. 08–141–(RMC)
(D.D.C.), challenging the validity of the
CY 2008 PFS final rule with comment
period and the subsequent Delay Rule,
and asking the Court to enjoin the
application of the CY 2008 PFS final
rule with comment period as to them.
The plaintiffs included the following:
(1) Three urology physician group
practices that own pathology
laboratories; (2) a self-employed
pathologist who performs testing
services for other physician groups; (3)
Uropath, LLC, a limited liability
company that manages various
pathology laboratories; and (4)
Uropath’s Director of Clinical
Operations. The Secretary moved to
dismiss the complaint for lack of
standing and lack of jurisdiction. The
Secretary agreed to withhold
implementation of the anti-markup rule,
as amended by the Delay Rule, for
claims submitted between February 1,
2008 and April 1, 2008, so that the
parties could fully brief the issues.
Subsequently, a preliminary injunction
was granted by the Court until the date
of its final order.
On May 5, 2008, the Court vacated the
preliminary injunction order and
granted the Secretary’s motion to
dismiss the suit. The Court found that
the plaintiffs did not have standing to
challenge the delay of the applicability
of the anti-markup provisions for some
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arrangements. The Court further found
that Uropath and its Director of Clinical
Operations lacked standing to challenge
either the CY 2008 PFS final rule with
comment period or the subsequent
Delay Rule due to the fact that they are
not Medicare providers or suppliers
and, thus, had no legally protected
interest at stake. Finally, the Court
found that, even if the plaintiffs had
standing, the physician groups and the
self-employed pathologist must exhaust
the administrative claims process before
the matter could be heard in Federal
court.
d. Specific Proposals
As finalized in the CY 2008 PFS final
rule with comment period, the antimarkup provision applies to the TCs or
PCs of diagnostic tests that are either
purchased from an outside supplier or
are performed outside of the ‘‘office of
the billing physician or other supplier.’’
Here, we are proposing two
alternative approaches for revising the
anti-markup provision in § 414.50. In
addition, we are seeking comments
regarding any other possible approaches
that would address our concerns
regarding overutilization motivated by
the ability of a physician or physician
organization to profit from diagnostic
testing services not actually performed
by or supervised by a physician who
should be considered to ‘‘share a
practice’’ with the billing physician or
other supplier.
Under our first proposal, the antimarkup provision in § 414.50 would
apply in all cases where the PC or TC
of a diagnostic testing service is either:
(i) Purchased from an outside supplier
or (ii) performed or supervised by a
physician who does not share a practice
with the billing physician or physician
organization (as defined at § 411.351).
We would specify that a physician who
is employed by or contracts with a
single physician or physician
organization shares a practice with that
physician or physician organization. We
believe that when a physician provides
his or her efforts for a single physician
organization (whether those efforts are
full-time or part-time), he or she has a
sufficient nexus with that practice to
justify not applying the anti-markup
provision as contemplated under
section 1842(n)(1) of the Act. Under this
proposal, a physician who is an
employee of, or independent contractor
with, more than one billing physician or
physician organization would not
‘‘share a practice’’ for purposes of
§ 414.50 with any of the physicians or
physician organizations with which he
or she is affiliated.
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We believe that this proposal offers a
simpler, more bright-line approach
preventing potentially abusive
arrangements while preserving the
viability of nonabusive arrangements
involving diagnostic testing facilities
that might not be considered to be in the
‘‘office of the billing physician or other
supplier,’’ as defined under the current
regulation (for example, a centralized
laboratory staffed with full-time
employees that is used by a physician
practice with multiple office locations,
sometimes referred to as a ‘‘hub and
spoke’’ arrangement). We are not
proposing regulation text for this
proposal.
We recognize that circumstances may
exist under which it is beneficial, if not
necessary, for a physician to provide
diagnostic testing services to more than
one physician practice. For example, a
physician in one practice may contract
to provide physician services on a
locum tenens basis to another practice
while a physician in that practice is on
vacation or maternity leave. We are
interested in comments regarding
whether and, if so, how we could permit
a physician to provide occasional
services outside of his or her physician
organization without the secondary
arrangement precluding the physician
from ‘‘sharing a practice’’ with his or
her physician organization for purposes
of applying the anti-markup provision.
We note that we do not consider
providing services at a free clinic or
moonlighting in a hospital emergency
department or as a hospitalist to be
‘‘sharing a practice.’’ Such activity
would not require the application of the
anti-markup provisions with respect to
the services the physician provides for
his or her physician organization.
Alternatively, we propose to maintain
much of the current regulation text and
its ‘‘site-of-service’’ approach to
determine whether a physician ‘‘shares
a practice’’ with the billing physician or
other supplier. In other words, we are
re-proposing to apply the anti-markup
provision to TCs and PCs of nonpurchased tests that are performed
outside the ‘‘office of the billing
physician or other supplier’’. We are
soliciting comments on whether this is
the best approach or whether we should
employ a different approach. As
discussed in more detail below in this
section, we are also proposing to amend
§ 414.50 to: (1) Clarify that the ‘‘office of
the billing physician or other supplier’’
includes space in which diagnostic
testing is performed that is located in
the same building in which the billing
physician or other supplier regularly
furnishes patient care (and to make two
other revisions to the definition); (2)
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clarify that, with respect to TCs, the
anti-markup provision applies if the TC
is either conducted or supervised
outside of the office of the billing
physician or other supplier; (3) clarify
that a TC of a diagnostic test is not
purchased from an outside supplier if
the TC is supervised by a physician
located in the office of the billing
physician or other supplier; (4) clarify
that, for purposes of applying the
payment limitation in § 414.50(a)(1)(i)
only, the ‘‘performing supplier’’ with
respect to the TC is the physician who
supervised the TC and, with respect to
the PC, the ‘‘performing supplier’’ is the
physician who performed the PC; (5)
propose an exception for diagnostic
tests ordered by a physician in a
physician organization (as defined at
§ 411.351) that does not have any
owners who have the right to receive
profit distributions; and (6) solicit
comments on how to define ‘‘net
charge’’ and on whether we should
delay beyond January 1, 2009 the
application of the revisions made by the
CY 2008 PFS final rule with comment
period, or the proposed revisions (to the
extent they are finalized), or both.
i. Definition of the ‘‘Office of the Billing
Physician or Other Supplier’’
We received informal comments from
various stakeholders who alleged that
the application of the CY 2008 PFS final
rule with comment period was unclear
with respect to whether certain types of
space arrangements meet the definition
of the ‘‘office of the billing physician or
other supplier.’’ In addition, some of
these stakeholders stated that patient
access may be significantly disrupted
due to the alleged inability of physician
groups to render services in a costeffective manner if the anti-markup
provision applies to arrangements in
which diagnostic testing services are
performed in the same building as, but
in space separate from, where patients
are seen. Stakeholders pointed to
arrangements in which the office where
a physician group sees patients is
located on, for example, the third floor
of a medical arts building, but the
diagnostic imaging services are housed,
for example, in the basement of the
building. Stakeholders also cited
arrangements in which two or more
group practices in the same building
may share a lab or other diagnostic
testing facility in that building.
After further review, we are proposing
to clarify the definition of ‘‘the office of
the billing physician or supplier’’ in
§ 414.50(a)(2)(iv) to include space, in
which diagnostic testing services are
performed, that is in the ‘‘same
building,’’ (as defined at § 411.351), as
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where the ordering physician or other
ordering supplier regularly furnishes
patient care (and more specifically, for
physician organizations, in the same
building as where the ordering
physician provides substantially the full
range of patient care services that the
ordering physician provides generally).
Note that the definition of ‘‘same
building’’ at § 411.351 specifically
excludes a ‘‘mobile vehicle, van, or
trailer’’. Therefore, diagnostic services
provided in the parking lot of a building
in which a physician group sees
patients would be subject to the antimarkup provisions.
We are soliciting comments that
describe current business arrangements
(such as those that take place on a
‘‘campus’’) and that suggest any
additional or alternative criteria that
would permit such arrangements to
avoid application of the anti-markup
provision while addressing our
concerns for the potential for
overutilization.
We have received questions as to
whether, for purposes of the definition
of the ‘‘office of the billing physician or
other supplier’’ a physician or other
supplier may have more than one
location at which it regularly furnishes
patient care. We propose to clarify in
§ 414.50(a)(2)(iv) that it may. In
addition, some stakeholders responded
to the requirement that, with respect to
a billing physician or other supplier that
is a ‘‘physician organization’’, the
‘‘office of the billing physician or other
supplier’’ is space in which the
physician organization provides
substantially the full range of patient
care services that the physician
organization provides generally.
According to the stakeholders, a
physician organization, such as a multispecialty physician group, may not
provide substantially its full range of
services at any one location, but rather
may provide substantially the full range
of services for a certain specialty in one
location, substantially the full range of
services for a second specialty in a
second location, and so forth. In order
to address this difficulty for physician
organizations, we are proposing to
revise § 414.50(a)(2)(iv) to read ‘‘with
respect to a billing physician or other
supplier that is a physician organization
(as defined at § 411.351 of this chapter),
the ‘‘office of the billing physician or
other supplier’’ is medical office space
where the ordering physician provides
substantially the full range of patient
care services that the ordering physician
provides generally.
Examples of Application of Our
Proposed Definition of the ‘‘Office of the
Billing Physician or Other Supplier’’.
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We are providing the following
examples in order to illustrate the effect
of our proposals. For purposes of the
following examples, assume that neither
the TC nor the PC is purchased from an
outside supplier.
sroberts on PROD1PC70 with PROPOSALS
Example 1. A physician group practice
treats patients in space located on one floor
of a building, and, in that space, provides
substantially the full range of services that it
provides generally. The group practice
conducts diagnostic testing on another floor
of the same building. The anti-markup would
not apply because the office of the billing
physician or other supplier includes the
space on both floors.
Example 2. One or more physician group
practices share space that is used for
diagnostic testing and is located in the same
building in which the group practices have
their respective offices for seeing patients
(and within those offices each group practice
provides substantially the full range of
patient care services that it provides
generally). Again, the anti-markup provision
would not apply because the office of the
billing physician or other supplier (with
respect to each group practice) includes the
space on both floors.
Example 3. A group practice treats patients
in Buildings A, B and C. In each of its offices
in Buildings A and B, the group practice
provides substantially the full range of
patient care services that it provides
generally, but that is not true for space
located in Building C. The group practice
provides diagnostic testing services in
Buildings B and C. If we finalize the
definition of the ‘‘office of the billing
physician or other supplier’’ to include space
in which diagnostic testing is performed that
is located in the same building as where the
ordering physician or other ordering supplier
regularly furnishes patient care, the antimarkup provision would not apply to the
diagnostic testing performed in Building B
but would apply to the diagnostic testing
performed in Building C.
We recognize that, unlike the first
alternative proposal described above,
our second alternative proposal may
adversely affect certain ‘‘hub and
spoke’’ and similar diagnostic testing
services arrangements (see description
above) in which a physician providing
services in a centralized diagnostic
testing facility owned by and serving a
multi-site group practice has a
significant nexus to the physician
organization that employs or contracts
with the physician. Therefore, we are
proposing to provide an exception in
§ 414.50(b) to the anti-markup provision
that would be applicable to diagnostic
tests ordered by a physician in a
physician organization that does not
have any owners who have the right to
receive profit distributions. The
exception would not apply to TCs
purchased from an outside supplier, in
recognition of the statutory command in
section 1842(n)(1) of the Act and our
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longstanding rule. We are seeking
comments as to whether the exception
is sufficient to address any potential
impediments to nonabusive ‘‘hub and
spoke’’ arrangements caused by this
second alternative approach, whether
the exception is too narrow or too broad,
and whether an exception to the
application of the anti-markup rule
under this second alternative approach
is necessary at all.
ii. Performed at a Site Other Than the
Office of the Billing Physician or Other
Supplier
Section 414.50(a) provides that the
anti-markup provision applies to the TC
of a diagnostic test if the TC is
performed outside of the office of the
billing physician or other supplier. We
propose to clarify that, if the TC is
conducted outside of the office of the
billing physician or other supplier, the
anti-markup provision applies
irrespective of whether the supervision
takes place in the office of the billing
physician or other supplier. We also
propose to clarify that the anti-mark-up
provision applies if the supervision of
the TC takes place outside the office of
the billing physician or other supplier,
even if the TC is conducted in the office
of the billing physician or other
supplier. In other words, we would take
the position that ‘‘performance’’ of the
TC includes both the technician’s work
in conducting the test and the
physician’s supervision of the
technician. Therefore, if either the
conducting of the TC or the supervising
of the TC takes place outside the office
of the billing physician or other
supplier, the anti-markup provision
would apply.
iii. Outside Supplier
In the CY 2008 PFS final rule with
comment period, we defined an outside
supplier as ‘‘someone who is not an
employee of the billing physician or
other supplier and who does not furnish
the test or interpretation to the billing
physician under a reassignment that
meets the requirements of § 424.80’’ (72
FR 66401). Subsequent to publication of
the final rule with comment period, we
received questions as to whether the TC
of a diagnostic test would be purchased
from an outside supplier if the
technician conducting the TC is not an
employee of the billing group but the
physician supervising the technician is
an employee or contractor of the billing
group. We are proposing to provide in
new § 414.50(a)(2)(iii) that the TC of a
diagnostic test is not purchased from an
outside supplier if the TC is both
conducted and supervised within the
office of the billing physician or other
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supplier, and the supervising physician
is an employee or independent
contractor of the billing physician or
other supplier. We believe that the
presence of the technician and the
supervising physician in the office of
the billing physician or other supplier,
and the fact that the supervising
physician is an employee or
independent contractor of the billing
physician or other supplier may
establish a sufficient nexus between the
supervising physician and the billing
physician or other supplier so as to
constitute ‘‘sharing a practice’’ within
the meaning of section 1842(n)1) of the
Act. We are providing proposed
regulatory text in new § 414.50(a)(2)(iii)
for this proposal. We are also making
two alternative proposals (each without
proposed regulatory text). We propose,
in the first alternative, that if the TC is
conducted by a technician who is not an
employee of the billing supplier, the TC
is considered to be purchased from an
outside supplier, regardless of where the
technician conducts the TC and
notwithstanding the employment status
of the supervising physician and the fact
that the test is supervised in the office
of the billing physician or other
supplier. As a second alternative, we
propose that, where the TC is conducted
by a non-employee of the billing
physician or other supplier and outside
the office of the billing physician or
other supplier, the TC nevertheless will
not be a purchased test if the
supervising physician is an employee or
independent contractor of the billing
physician or other supplier and
performs the supervision in the office of
the billing physician or other supplier.
We note that, if we were to adopt this
second alternative, the TC would still be
subject to the anti-markup provision
under our proposal that the anti-markup
provision applies if either the
conducting of the TC or the supervising
of the TC takes place outside the office
of the billing physician or other
supplier, unless an exception applies
(see section II.N.1.d.i. of this proposed
rule).
iv. The Performing Supplier’s Net
Charge
Section 414.50(a)(1) provides that,
where the anti-markup provision
applies, Medicare payment to the billing
physician or other supplier is limited to
the lowest of three specified amounts,
one of which, in § 414.50(a)(1)(i), is ‘‘the
performing supplier’s net charge to the
billing physician or other supplier.’’ We
have received comments concerning
what the performing supplier’s net
charge would be in the situation in
which a physician in a group practice
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supervises the performance of a TC but
the group practice bills for the TC
directly, that is, without a reassignment
from the supervising physician.
Stakeholders have questioned whether
there are two suppliers, that is, the
physician supervising the TC and the
group practice billing for it, or whether
there is only one supplier, that is, the
group practice, given that the
supervising physician is not effecting a
reassignment.
We propose to clarify that for
purposes of § 414.50(a)(1)(i) only, the
‘‘performing supplier’’ of the TC is the
physician who supervised the TC, and
the ‘‘performing supplier’’ of the PC is
the physician who performed the PC.
Therefore, where the anti-markup
provision applies, the billing physician
or other supplier would need to
determine what it paid the physician for
supervising the TC or for performing the
PC.
required to directly bill payors for their
services and are prohibited from
reassigning their right to payment to the
ordering supplier. We are soliciting
comments on whether, in addition to or
in lieu of, the anti-markup provision, we
should prohibit reassignment in certain
situations and require the physician
supervising the TC or performing the PC
to bill Medicare directly.
Finally, we are soliciting comments
on whether the revisions made by the
CY 2008 PFS final rule with comment
period should go into effect on January
1, 2009, as planned, and whether any
proposals contained herein that may be
finalized should go into effect on that
date, or whether some or all of the
revisions should be delayed past
January 1, 2009.
v. Specific Solicitation of Comments
We are interested in receiving
comments concerning the calculation of
net charge for the PC when the antimarkup rules apply. In the CY 2008 PFS
final rule with comment period,
commenters objected that it would be
difficult to calculate the net charge of
the performing supplier. We stated that
we did not believe that most suppliers
would experience significant difficulty
in calculating the net charge, despite the
fact that some physicians are paid an
aggregate monthly or annual amount for
their services. In addition, we stated
that suppliers could also choose to
restructure their arrangements so that
the anti-markup provision does not
apply (72 FR 66318). Despite these
responses in the final rule, we have
received comments and questions
concerning how to calculate the net
charge. We are soliciting comments as to
whether and how we should provide
specific regulatory guidance for
calculating the net charge.
Commenters specifically stated that
our decision to exclude the overhead
costs of the billing supplier in the net
charge would have a detrimental
financial impact upon their practice
and, ultimately, patient access to care.
We are also soliciting comments on
whether we should allow some
overhead costs to be recovered by
billing suppliers for services to which
the anti-markup provision applies, and
how our concerns about the potential
for overutilization would be addressed
if we were to allow some recovery of
overhead.
We note that several States have
enacted direct billing laws, under which
physicians (primarily pathologists) are
a. Background
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2. Exception for Incentive Payment and
Shared Savings Programs (Proposed
§ 411.357(x))
The Medicare program and private
industry stakeholders are increasingly
exploring the benefits of various types
of gainsharing, pay-for-performance
(‘‘P4P’’), value-based purchasing, and
similarly-styled programs that use
economic incentives to foster high
quality, cost-effective care. Many of
these programs involve payments from
hospitals to physicians. These payments
potentially implicate the fraud and
abuse laws, including the physician
self-referral statute. Existing exceptions
to the physician self-referral statute,
while useful, may not be sufficiently
flexible to encourage a variety of
nonabusive and beneficial gainsharing,
P4P, and similar programs.
For this reason, as described in greater
detail below, we are proposing a new,
targeted exception to the physician selfreferral statute for such programs. The
design of the new exception presents a
particular challenge: Crafting an
exception that offers broad flexibility for
innovative, effective programs, while at
the same time protecting the Medicare
program and beneficiaries from abuses.
In reviewing various programs and
industry suggestions, we have been
struck by the considerable variety and
complexity of existing arrangements,
and the likelihood of continued future
innovation in the structure and method
of these programs. This variety and
complexity make it difficult to craft a
‘‘one-size-fits-all’’ set of conditions that
are sufficiently ‘‘bright line’’ to facilitate
compliance and enforceability, yet
sufficiently flexible to permit
innovation without undue risk of
program or patient abuse.
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The variety and complexity of these
programs make them potential vehicles
for the unscrupulous to disguise
payments for referrals or compromise
quality of care for patients in the
interest of maximizing revenues.
Therefore, our approach to drafting a
proposed exception is a cautious one.
Our proposal is relatively narrow, and
we acknowledge at the outset that it is
unlikely to cover as many arrangements
as interested stakeholders would like.
As described below, we are considering
various ways that we might expand the
proposed exception, if we can do so
without a risk to the programs and their
beneficiaries. We are interested in
public comments specifically
addressing areas of possible expansion,
the potential abuses that could occur,
and the conditions necessary to ensure
that such expansion does not pose a risk
of program or patient abuse. It is our
goal to promulgate an exception that is
as broad as possible consistent with the
statutory requirement that any
arrangement excepted under an
exception issued using our authority in
section 1877(b)(4) of the Act pose no
risk of program or patient abuse. We
note that section 1877 of the Act is not
implicated by quality or cost savings
programs that do not involve
remuneration to physicians. Hospitals
are free to implement quality protocols,
cost savings measures, and the like
without regard to section 1877 of the
Act, provided that the arrangements do
not involve financial relationships with
referring physicians.
Although ‘‘gainsharing’’ is commonly
used to describe certain programs that
seek to align physician behavior with
the goals of a hospital by rewarding
physicians for reaching predetermined
performance outcomes, several types of
programs exist for the purpose of
achieving quality standards, generating
cost savings, and reducing waste. In this
proposed rule, we refer to these
programs as ‘‘incentive payment and
shared savings programs.’’ We describe
below in more detail the characteristics
of programs we consider to fall within
these categories. Successful programs
often result in improved quality
outcomes or cost savings (or both) for
the hospital sponsoring the program. To
achieve these goals, hospitals make
financial payments to the physicians
whose efforts contribute to the success
of the program. As noted above, these
payments may implicate the physician
self-referral statute.
Section 1877(a)(1) of the Act states
that, except as provided in section
1877(b) of the Act, if a physician (or an
immediate family member of such
physician) has a financial relationship
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with an entity, the physician may not
make a referral to the entity for the
furnishing of designated health services
(DHS) for which payment otherwise
may be made under title XVIII of the
Act. The provision of monetary or
nonmonetary remuneration by a
hospital to a physician through a
gainsharing arrangement or other
incentive payment or shared savings
program would constitute a financial
relationship with an entity for purposes
of the physician self-referral statute.
Incentive payment and shared savings
programs also potentially implicate two
additional specific fraud and abuse
statutes. First, sections 1128A(b)(1) and
(b)(2) of the Act, commonly referred to
as the Civil Monetary Penalty (CMP)
statute, prohibit a hospital from
knowingly making a payment directly or
indirectly to a physician as an
inducement to reduce or limit items or
services furnished to Medicare or
Medicaid beneficiaries under the
physician’s direct care, and a physician
from knowingly accepting such
payment. Second, these arrangements
potentially implicate section 1128B(b)
of the Act (the anti-kickback statute) if
one purpose of the quality improvement
or cost savings payment is to influence
referrals of Federal health care program
business.
i. Incentive Payment Programs
‘‘Pay for performance’’ (P4P), also
known as quality-based purchasing, is a
quality improvement and
reimbursement methodology aimed at
moving towards payments that create
stronger financial support for patient
focused, high value care. There are
many models for financial and nonfinancial incentives used in P4P and
other quality-focused programs. We
refer to these types of programs, which
may be payer-based or provider-based,
as ‘‘incentive payment programs.’’
Through collaborative efforts with a
wide range of other public agencies and
private organizations that have a
common goal of improving quality and
avoiding unnecessary health care costs,
including the National Quality Forum
(NQF), The Joint Commission, the
National Committee for Quality
Assurance (NCQA), the Agency for
Healthcare Research and Quality
(AHRQ), and the American Medical
Association (AMA), we are developing
and implementing a set of P4P
initiatives to support quality
improvement in the care of Medicare
beneficiaries. The objective measures
used in incentive payment programs to
determine whether providers are
offering high quality care are commonly
referred to as ‘‘quality standards.’’ This
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term is also used in many providerbased incentive payment programs. We
use the term ‘‘quality standards’’ in this
proposed rule as well.
When payer-based, P4P attempts to
use reimbursement to promote quality,
efficiency in providing access to needed
services, and successful outcomes. In
many payer-based models, payers make
available to hospitals financial
incentives tied to achieving certain
quality or performance goals (for
example, adopting health information
technology, furnishing preventive care
services, achieving patient satisfaction
targets, or measurably improving patient
health indicators). Hospitals often need
physician collaboration to meet
performance goals. In order to align
incentives, hospitals may want to share
with physicians a portion of the P4P
payments they receive from the payers.
In the absence of or in addition to a
payer-based incentive payment
program, hospitals may also sponsor
quality-focused programs in which
objective improvements in quality or
individual patient care outcomes are
rewarded with payments to physicians
responsible for the improvements.
In both circumstances, payments
made by a hospital to the physicians
whose efforts promoted the achievement
of targets (or benchmarks) for one or
more performance measures create a
financial relationship between the
hospital and the physician that
implicates the physician self-referral
statute. These payments also potentially
implicate the anti-kickback statute and
the CMP statute. (We note that,
depending on the nature of the
performance measure, incentive
payment programs might not implicate
the CMP statute because they might not
involve any reduction or limitation in
patient care services.)
Although properly structured
incentive payment programs can
enhance health care quality and
efficiency, improperly structured
programs pose significant risks of
program or patient abuse, including
adversely affecting patient care.
Moreover, such programs could be
vehicles to disguise payments for
referrals, including incentives to steer
healthier patients to the hospital
offering the incentive payment program.
Programs that cannot be adequately and
accurately measured for quality would
also pose a high risk of program or
patient abuse. We observe that payerbased programs in which the
performance measures are set by a
wholly independent, arms-length party
with a clear financial incentive to make
P4P payments prudently may pose
somewhat less risk than non-payer
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38549
based programs, where there is no thirdparty payer that sets the performance
measures and monitors compliance. We
note further that payments made
directly from a payer to a physician, at
the payer’s sole discretion, may not
implicate the physician self-referral
statute or other fraud and abuse statutes.
ii. Shared Savings Programs
Many programs, such as
‘‘gainsharing’’ and other cost savings
and waste reduction programs, seek to
align physician economic incentives
with those of hospitals by offering
physicians a share of the hospitals’
variable cost savings attributable to the
physicians’ efforts in controlling the
costs of providing patient care. For
purposes of this proposed rulemaking,
we refer to these types of programs as
‘‘shared savings programs.’’ When a
participating physician receives a
portion of the cost savings attributable
to his or her efforts in reducing waste
and achieving the goals of a shared
savings program, a financial
relationship is created between the
hospital sponsoring the shared savings
program and the participating
physician, and the physician selfreferral statute is implicated.
The Medicare Part A DRG system of
hospital reimbursement, under which a
hospital receives a prospectively
determined, fixed payment that covers
all hospital items and services provided
to a Medicare beneficiary during his or
her inpatient stay or outpatient service,
provides a significant incentive for
hospitals to control costs. Hospitals are
also motivated to reduce costs because
of the growth of managed care.
However, because physicians are paid
separately under Medicare Part B (and
by many managed care and other
payers), they do not share necessarily
the hospital’s motivation to control
patient care costs. Physicians who
perform their professional services at a
hospital use the hospital’s equipment,
supplies and services, and prescribe
drugs, devices and other items and
services which the hospital must
provide. In short, physicians are not
financially at risk for the items and
services that they use and prescribe, and
therefore, do not have a financial stake
in controlling the hospital’s patient care
costs.
As part of many shared savings
programs, physicians study how
colleagues perform their procedures and
then determine the best processes to
adopt, in order to increase efficiency
while ensuring quality. In other
situations, outside experts are hired to
analyze hospital and regional or
national data to determine appropriate
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opportunities for cost savings that do
not jeopardize patient care. Shared
savings programs are sometimes
described as collaborations between
physicians and hospitals to determine
the best approach to providing quality
patient care services. Shared savings
programs have been recognized by
stakeholders as an effective means of
controlling costs, improving efficiency,
and promoting quality in the delivery of
health care services. Government
stakeholders have recognized similar
potential benefits when shared savings
programs are properly structured to
ensure compliance with Federal health
care program requirements.
Empirical evidence suggests that the
goal of patient care quality maintenance
or improvement can be achieved
through a properly-designed shared
savings program. An independent study
of data from 13 separate, 1-year
gainsharing programs 1 designed and
administered by the organization
responsible for the design of all of the
gainsharing programs that, to date, have
received favorable advisory opinions
from OIG (see discussion below and in
the FY 2009 Hospital IPPS proposed
rule (73 FR 23692 through 23693)),
found that the incentives for cost
reduction in the gainsharing models
studied did not result in reductions in
quality and, for certain quality
measures, resulted in improved quality
of patient care. (See Jonathan D.
Ketcham and Michael F. Furukawa
‘‘Hospital-Physician Gainsharing in
Cardiology.’’ Health Affairs, Vol. 27, No.
3 (May/June 2008), 808.) Specifically,
according to the study, gainsharing
slowed the growth of average in-lab cost
per coronary stent patient, reducing
costs relative to non-gainsharing
hospitals; yet, in-lab complications did
not increase during gainsharing, and
three complications significantly
decreased. (Id. at 808.) With respect to
gainsharing’s positive impact on patient
care quality, the authors of the study
asserted that the economic incentive for
physicians participating in gainsharing
programs to collaborate in defining and
adopting best practices might improve
the physicians’ incorporation of clinical
evidence into patient care
decisionmaking. This is, at least in part,
because the gainsharing programs
studied provided participating
physicians and physician organizations
with information about other
1 Although we refer herein to ‘‘shared savings
programs,’’ the study cited referred to these
programs as ‘‘gainsharing programs.’’ We retain that
nomenclature for purposes of discussing the study.
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physicians’ practice patterns. (Id. at
809.)
Although properly structured shared
savings programs may increase
efficiency and reduce waste, thereby
potentially increasing a hospital’s
profitability and contributing to quality
of care, improperly designed or
implemented programs pose the same
risks of program or patient abuse
described above in connection with
incentive payment programs. Additional
risk is posed by shared savings
programs that reward physicians based
on overall cost savings (for example, the
amount by which the total costs
attributable to a particular hospital
department decreased from one year to
the next) without accountability for
specific cost reduction measures.
We are concerned about physicians
responding to a shared savings program
by limiting their use of qualityimproving but more costly devices, tests
or treatments (‘‘stinting’’), by treating
only healthier patients (‘‘cherry
picking’’), by avoiding sicker patients
(‘‘steering’’) at the hospital, or by
discharging patients earlier than
clinically indicated either to home or to
post acute care settings (‘‘quickersicker’’ discharge). We are concerned
also about arrangements which provide
for payments in exchange for patient
referrals or result in unfair competition
among hospitals offering shared savings
programs to foster physician loyalty and
to attract more referrals. We are
concerned that, because of pressures
from competition or physicians,
hospitals may increase the percentage of
savings shared with the physicians,
manipulate hospital accounts to
generate phantom savings, or otherwise
game the arrangement to generate
income for referring physicians in order
to retain them for or attract them to the
hospital. (These same concerns may be
present with incentive payment
programs.) We are incorporating
safeguards into the proposed exception
that are intended to address these risks.
iii. DHHS Initiatives: Incentive Payment
and Shared Savings Programs
Patient care quality improvement is a
laudable goal and a priority of the
Department of Health and Human
Services (the Department or DHHS).
Patient care should be safe, effective,
efficient, patient-centered, timely and
equitable. Establishing partnerships is a
critical step towards achieving our goals
of improving patient care quality and
avoiding unnecessary costs. Incentive
payment and shared savings programs,
when properly structured, by design
establish such partnerships.
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Since 1991, we have sponsored a
variety of demonstration projects and
other initiatives to explore the
connection between payments and the
quality of care. These initiatives include
the evaluation of both gainsharing (in
various forms) and P4P programs
affecting providers of health care to
beneficiaries in diverse care settings.
Although we decline to provide detailed
descriptions of individual initiatives
here, gainsharing demonstrations
include: (1) The Medicare Participating
Heart Bypass Center Demonstration
which was conducted to assess the
feasibility and cost effectiveness of a
negotiated all-inclusive bundled
payment arrangement for coronary
artery bypass graft (CABG) surgery
while maintaining high quality care; (2)
a 3-year demonstration under section
1866C of the Act, which has been
established, but not yet implemented, to
test gainsharing models involving
physicians, and collaborations between
hospitals working with physicians, in a
single geographic area to improve the
quality of inpatient hospital care; and
(3) a demonstration project under
section 5007 of the DRA that would
involve arrangements between a
hospital and physicians and
practitioners under which the hospital
provides remuneration (to certain
physicians and to certain practitioners
(as defined in 1842(b)(18)(C) of the Act))
that represents solely a share of the
savings incurred directly as a result of
collaborative efforts between the
hospital and a particular physician (or
practitioner) to improve overall quality
and efficiency. In addition, we recently
announced a new demonstration, the
Acute Care Episode Demonstration, for
hospitals to test the use of a bundled
payment for both hospital and physician
services for a select set of episodes of
care (orthopedic and cardiac) to
improve the quality of care delivered
through Medicare FFS. We note that
some of the demonstration programs are
proceeding under a statutory provision
that waived application of section 1877
of the Act, the anti-kickback statute, and
the CMP statute.
In addition to these gainsharing
demonstrations, we have developed a
number of P4P and other value-based
purchasing initiatives across patient
care settings, including: The Premier
Hospital Quality Incentive
Demonstration; the Medicare Care
Management Performance
Demonstration; the Home Health Payfor-Performance Demonstration; and the
Better Quality Information Pilots.
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iv. Potential Statutory and Regulatory
Applications to Incentive Payment and
Shared Savings Programs
Section 1877 of the Act, also known
as the physician self-referral statute: (1)
Prohibits a physician from making
referrals for certain DHS payable by
Medicare to an entity with which he or
she (or an immediate family member)
has a financial relationship (ownership,
investment or compensation), unless an
exception applies; and (2) prohibits the
entity from filing claims with Medicare
(or billing another individual, entity or
third party payer) for those referred
services. The statute establishes a
number of specific exceptions and
grants the Secretary the authority to
create regulatory exceptions for
financial relationships that pose no risk
of program or patient abuse.
A financial relationship is created
where an incentive payment or shared
savings program results in a direct or
indirect payment from the hospital to a
physician. Unless the arrangement
satisfies the requirements of an
applicable exception, the incentive
payment or shared savings payment
would violate the physician self-referral
prohibition if the physician receiving
the payment makes referrals for DHS to
the hospital making the incentive
payment or shared savings payment. In
many cases, incentive payment and
shared savings programs can be
structured to satisfy the requirements of
existing exceptions (for example, the
exceptions for bona fide employment
relationships, personal service
arrangements, fair market value
compensation, or indirect compensation
arrangements). In some cases, no
exception may be necessary (for
example, incentive payments paid
directly from a payer at the payer’s sole
discretion to a physician for the
physician’s efforts in improving
quality). However, in other
circumstances, the existing exceptions
to the physician self-referral prohibition
may not be sufficiently flexible to
protect payments to physicians under
incentive payment and shared savings
programs.
As noted above, incentive payment
and shared savings programs also
implicate two additional specific fraud
and abuse statutes—the CMP statute and
the anti-kickback statute. An incentive
payment or shared savings program
could run afoul of the anti-kickback
statute if one purpose of the payment
from the hospital to the physician is to
influence referrals of Federal health care
program business. In contrast, the intent
of the parties does not dictate
compliance with the physician self-
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referral statute. If an arrangement fails to
satisfy all of the requirements of an
exception, it would violate section 1877
of the Act.
v. Solicitation of Comments in the FY
2009 Hospital Inpatient Prospective
Payment System Proposed Rule
In the FY 2009 IPPS proposed rule,
we solicited comments as to whether we
should issue an exception specific to
gainsharing arrangements, which we
stated ‘‘typically refer[] to an
arrangement under which a hospital
gives physicians a share of the reduction
in the hospital’s costs (that is, the
hospital’s cost savings) attributable in
part to the physicians’ efforts’’ (73 FR
23692). Although we noted general
concerns with arrangements that
involve the use of a percentage-based
compensation formula (as many
gainsharing arrangements involve), we
solicited comments regarding a
potential exception to the physician
self-referral prohibition for gainsharing
arrangements in recognition of ‘‘the
value to the Medicare program and its
beneficiaries where the alignment of
hospital and physician incentives
results in improvements in quality of
care’’ (73 FR 23694). Specifically, we
solicited comments on the following: (1)
What types of requirements and
safeguards should be included in any
exception for gainsharing arrangements;
and (2) whether certain services, clinical
protocols, or other arrangements should
not qualify for the exception (73 FR
23694).
b. Public Response to Solicitation of
Comments
The following discussion describes
comments received in response to the
solicitation of comments on gainsharing
arrangements that we have reviewed to
date. In addition, we have reviewed
comments received in connection with
our proposal in the CY 2008 PFS
proposed rule to revise § 411.354(d) to
permit the use of percentage-based
compensation formulae (such as the
type often used for making cost sharing
payments) for personally performed
physician services only (72 FR 38184).
In that proposal, we specifically noted
that the revisions, if finalized, could
potentially affect payment
methodologies used in gainsharing
programs. Generally, commenters
strongly supported the establishment of
an exception for gainsharing and other
programs that compensate physicians
and physician organizations for
improving patient care quality and
decreasing the cost of providing patient
care when those achievements can be
tied to the physician’s or physician
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organization’s participation in the
program. Commenters urged that an
exception contain safeguards to ensure
patient access to necessary items and
services, improve patient care quality,
and avoid improper influencing of
physician referral patterns due to the
constraints or incentives of the
program’s design. One commenter
suggested that the availability of the
exception be contingent upon the
parties obtaining a favorable advisory
opinion from OIG prior to the
implementation of the gainsharing
program. In addition, commenters
requested that an exception provide
flexibility to allow an entity to design an
incentive payment or shared savings
program that is specific to the entity’s
goals and needs, as well as to modify
the program as necessary. One
commenter also provided
recommendations regarding the types of
cost savings measures (in addition to
supply cost reduction measures) that
should be addressed by the exception,
as well as particular services, clinical
protocols, and other arrangements that
we should exclude from the protection
of an exception for incentive payment
and shared savings programs. The
commenter suggested that an exception
to the physician self-referral prohibition
should permit more types of
arrangements (and within additional
medical specialties) than thus far have
been explicitly approved in OIG
advisory opinions. Specifically, the
commenter urged that an exception for
incentive payment and shared savings
programs allow a program covered by
the exception to reward: (1) Decreasing
delays in patient care; (2) reconsidering
ordering patterns for all types of testing
and services (in order to reduce
medically unnecessary services and
reduce cost); (3) reducing consultation
of other physicians when value is not
added to the patient’s care through the
consultation; (4) establishing long-term
management of chronic patient
conditions; and (5) using alternative
care (for example, outpatient care
instead of inpatient care).
Specific recommendations for
safeguards to be included in an
exception for incentive payments and
shared savings programs included: (1)
Permitting the duration of the program
to exceed 1 year (the term of the
arrangements approved under the OIG
advisory opinions to date); (2) requiring
mechanisms to ensure that the program
will not affect patient care in an adverse
manner; (3) limitations on the amount of
payments to participating physicians;
(4) requiring periodic review of the
impact of the program on clinical care;
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(5) a written agreement that clearly
identifies the services or actions for
which payment may be made to the
participating physicians; (6) permitting
payments only for documented and
verified quality improvement and waste
or cost reduction; (7) determining
compensation to participating
physicians (or a formula for such
compensation) prior to the
implementation of the program or the
physician’s participation in the
program, and prohibiting modification
to the compensation during the term of
the arrangement; (8) requiring written
disclosure regarding the program to all
patients affected by the program to
promote transparency and
accountability; and (9) prohibiting
payment to a physician or physician
organization that is determined in any
way based on a reduction in the length
of stay for hospital patients.
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c. Proposal
Although we solicited comments in
the FY 2009 IPPS proposed rule
regarding an exception to the physician
self-referral prohibition for gainsharing
arrangements (73 FR 23692), we believe
that a broader exception that includes
incentive payment programs is needed
to facilitate the full array of nonabusive,
beneficial incentive payment and shared
savings programs that we consider
important for promoting the highest
quality of care for our beneficiaries
while achieving cost savings for the
program. Section 1877(b)(4) of the Act
authorizes the Secretary to create
regulatory exceptions for financial
relationships that he determines do not
pose a risk of program or patient abuse.
Therefore, using our authority under
section 1877(b)(4) of the Act, we are
proposing here an exception in new
§ 411.357(x) for payments provided to a
physician participant in an incentive
payment or shared savings program that
includes certain safeguards and satisfies
certain conditions.
i. General Considerations With Respect
to the Proposed Exception
As we described above in greater
detail, we have concerns about
physicians responding to incentive
payment and shared savings programs
by stinting, cherry picking, steering, and
making quicker-sicker discharges. The
criteria included in the proposed
exception are focused on three aspects
that we consider critical to a properly
structured, nonabusive incentive
payment or shared savings program:
transparency, quality controls (for
example, controls to prevent reductions
in resource utilization that lead to a
diminution in quality), and safeguards
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against payments for referrals (or
influencing referrals). We are proposing
requirements with respect to the
structure of the incentive payment and
shared savings program itself,
limitations and conditions regarding the
payments provided to the physicians
participating in the program, and
requirements for the arrangement
between the hospital and the physicians
participating in the program. We are
seeking comments on each requirement
in the exception, as well as comments
regarding the exception in its entirety.
With respect to the latter, we are
interested in comments regarding the
effect of incentive payment and shared
savings programs on marketplace
competition, specifically with regard to
whether shared savings programs that
include product standardization
measures disadvantage small
manufacturers of items, supplies and
devices due to the selection and
preferred utilization of a limited number
of items, supplies and devices included
in the shared savings program, the
ordering of which qualifies for program
payments. (We note that, although we
expect that the initial selection of the
preferred products would be based on
clinical efficacy, safety and medical
appropriateness, we recognize that the
final selection of products in a product
standardization program is likely to be
based on price when quality and utility
are comparable). We are interested in
comments on how product
standardization can be achieved without
limiting patient access to items,
supplies and devices considered
beneficial to improved patient care. We
are also concerned about the potential
for fraud and abuse if manufacturers
attempt to influence the design or
implementation of hospital incentive
payment or shared savings programs.
We note that, for most of the
requirements and safeguards discussed
in this proposal, we have proposed
regulation text. However, we have not
provided proposed regulation text for a
limited number of the proposed
requirements and safeguards described,
but rather have solicited comments
regarding how best to incorporate them
into the regulatory text of the exception.
We are proposing a single set of
requirements that would apply equally
to incentive payment and shared
savings programs. In many cases,
programs may include both patient care
quality measures and cost savings
measures, or a particular performance
measure may be both a quality measure
and cost savings measure. We believe
that one set of requirements would ease
administration and assist with hospitals’
and physicians’ compliance efforts.
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Further, similar risks of program or
patient abuse exist regardless of whether
a hospital pays a physician a share of its
internal cost savings, a share of external
funds earned by meeting quality goals
(in a payer-sponsored program), or a
share of its general revenues to promote
quality. We are interested in comments
with respect to whether separate
exceptions for incentive payment
programs and shared savings programs
would be preferable and, if so, how they
should be structured, and which
requirements should appear in each.
The requirements of the proposed
exception include a number of program
integrity safeguards, consistent with our
longstanding concern, first noted in the
Phase I final rule with comment period,
that a patient’s choice can be affected
when physicians steer patients to less
convenient or lower quality items or
services because the physicians are
sharing profits with, or receiving
remuneration from, the provider (63 FR
1659 and 1662). We are also concerned
about systems that incentivize the
delivery of less expensive care at the
cost of patient care quality and systems
that limit patient access to beneficial
new technology. The proposed
exception prohibits payment to
physicians based in whole or in part on
a reduction in the length of stay for a
particular patient or in the aggregate for
the hospital operating the program.
However, we recognize that reduced
length of stay may occur as an
incidental effect of quality improvement
efforts.
ii. Scope of the Proposed Exception
As noted above, we used the term
‘‘incentive payment and shared savings
program’’ to encompass a wide variety
of gainsharing and P4P programs. We do
not propose to limit the exception to
traditional gainsharing programs or
supply cost/waste reduction programs.
We are seeking comments regarding
whether this approach is too limited or
expansive, and whether different
terminology would better describe the
range of nonabusive programs we intend
to cover under the proposed exception.
Our proposed exception protects only
incentive payment and shared savings
programs offered by hospitals. It is our
understanding that these arrangements
are the most common, and, as described
above, are the type with which we have
the most experience. We are concerned
that, unlike hospitals that are
reimbursed on a prospective payment
basis, other types of providers and
suppliers that are reimbursed on a fee
schedule or other FFS basis might have
an incentive to create quality measures
that mandate the furnishing of more
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items and services, without regard to
costs to the Medicare program or its
beneficiaries. In many cases, it might be
relatively easy to characterize a program
that offers beneficiaries more items and
services as a ‘‘quality’’ incentive
program, even in the absence of actual
quality improvement. However, we are
soliciting comments on whether
incentive payment or shared savings
programs (or similar programs) offered
by other DHS entities should be
protected and under what
circumstances. In particular, we are
interested in comments regarding the
structure and design of non-hospital
arrangements and the safeguards that we
could include in an exception to meet
the statutory standard of no risk of
program or patient abuse.
We are proposing to protect
remuneration only in the form of cash
(or cash equivalent) payments made by
a hospital. Nonmonetary remuneration,
such as additional staff members or new
equipment, offered to reward
achievement of quality or cost savings
goals would not be protected. In
addition, the proposed exception would
be limited to payments to physicians
who actually participate (‘‘participating
physicians’’) in the achievement of the
patient care quality measures or cost
savings measures (collectively referred
to in this proposal as the ‘‘performance
measures’’) that are the subject of the
particular program. We note that the
physician self-referral statute applies
only to physicians. Nothing in this
proposal is intended to limit or prohibit
the participation of NPPs in incentive
payment and shared savings programs.
Moreover, the participation of NPPs in
an incentive payment or shared savings
program would not require the
protection of an exception to the
physician self-referral prohibition
unless the practitioner’s referrals are
directed by, controlled by, or attributed
to a physician with whom or for whom
the practitioner works.
We are proposing that protected
payments could be made to
participating physicians individually or
to physician organizations composed
entirely of participating physicians
(referred to in this proposal as
‘‘qualified physician organizations’’) (for
example, a group practice composed
entirely of cardiac surgeons
participating in a cardiac surgery shared
savings program could be a qualified
physician organization). With respect to
qualified physician organizations, we
are considering whether such
organizations could include physicians
who are eligible to participate in the
program, even if the individual
physicians elect not to participate in the
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program (for example, a group practice
composed entirely of cardiac surgeons
could be a qualified physician
organization in a cardiac surgery shared
savings program, even if some surgeons
elect not to participate in the program).
As discussed further below, qualified
physician organizations would need to
distribute incentive or shared savings
payments received from the hospital on
a per capita basis to the physicians in
the physician organization who
participated in the incentive payment or
shared savings program. In any case,
payments made to physicians who refer
patients to the hospital but do not
otherwise participate in the program
would not be protected. For example,
payments to cardiac surgeons for
changing their operating room
procedures would be protected
(provided that all of the other
requirements of the exception were
satisfied), whereas payments to the
cardiologists who referred the patients
for cardiac surgery but did not perform
the surgery or contribute to the
achievement of the performance
measures through their personal efforts
would not be protected.
iii. Requirements Related to the Design
of an Incentive Payment or Shared
Savings Program
To be protected, the incentive
payment or shared savings program
must be a documented program that
seeks to achieve the improvement of
quality of hospital patient care services
through changes in physician clinical or
administrative practices or actual cost
savings for the hospital resulting from
the reduction of waste or changes in
physician clinical or administrative
practices, without an adverse affect on
or diminution in the quality of hospital
patient care services.
We are proposing to require that, in
order for payments made as part of an
incentive payment or shared savings
program to qualify for the protection of
the exception, the program must include
patient care quality or cost savings
measures (or both) supported by
objective, independent medical
evidence indicating that the measures
would not adversely affect patient care.
Specifically, all performance measures
must use an objective methodology, be
verifiable, be supported by credible
medical evidence, and be individually
tracked. The measures must reasonably
relate to the hospital’s practices and
patient population. In the interest of
creating clear, bright-line rules, we are
proposing specifically that patient care
quality measures be listed in CMS’
Specifications Manual for National
Hospital Quality Measures. In the
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alternative, rather than require programs
to include the patient care quality
measures listed in CMS’ Specifications
Manual for National Hospital Quality
Measures, we would deem such
measures to satisfy that requirement.
With respect to cost savings measures,
we are proposing to require that cost
savings measures included in the
incentive payment or shared savings
program use an objective methodology,
be verifiable, be supported by credible
medical evidence indicating that the
measures would not adversely affect
patient care, be individually tracked,
and reasonably relate to the services
provided. We are seeking comment
regarding this approach and the
described alternative for patient care
quality measures in general, and we are
interested specifically in comments
regarding other appropriate performance
measures (or lists of performance
measures, particularly with respect to
cost savings measures to the extent such
a list might exist) that might be deemed
to satisfy such a requirement if we
finalize this alternative proposal, as well
as whether parties could satisfy this
requirement by including criteria
deemed by the Secretary in an advisory
opinion to meet the requirement. We are
including this requirement to safeguard
against programs that incorporate sham
standards that are designed to reward
physicians for referrals rather than the
achievement of legitimate benchmarks
for quality maintenance or improvement
or cost savings. We believe that
appropriate performance measures
should derive from broad, objective,
widely-recognized criteria and not
merely result from the subjective views
of the parties to the arrangement. We
also are proposing a specific
requirement that the program ensure
that the quality of patient care services
is not impacted adversely as a result of
the program.
We are proposing that an incentive
payment or shared savings program
must be reviewed prior to
implementation of the program and at
least annually thereafter to ascertain the
program’s impact on the quality of
patient care services provided by the
hospital. We believe that such vigilance
is critical to ensure that quality of
hospital patient care is not impacted
adversely. Under this proposal, the
reviews must be conducted by a person
or organization with relevant clinical
expertise, and they must be
independent medical reviews. By
‘‘independent medical reviews,’’ we
mean reviews by an individual or
organization that is not: (1) Affiliated
with the hospital operating the program
under review; (2) not affiliated with any
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participating physician or with any
physician organization with which a
participating physician is affiliated; and
(3) at the time of the review, not
participating in any incentive payment
or shared savings program operated by
the hospital. We are seeking comments
specifically regarding the appropriate
frequency for review of incentive
payment and shared savings programs
to ensure that quality of hospital patient
care is not impacted adversely and to
protect against program or patient
abuse. We are also seeking comments
addressing the circumstances, if any,
under which the periodic review could
be conducted by an individual or
organization that does not fall within
the definition of ‘‘independent medical
review’’ outlined above.
Any reviews would need to be
objective, accurate and complete and
result in written findings. We are
proposing that the initial and periodic
reviews should be contemporaneously
documented, and that all
documentation related to the incentive
payment or shared savings program and
the reviews thereof be made available to
the Secretary upon request. We are
further proposing that incentive
payment and shared savings programs
must provide for immediate and
appropriate corrective action in the
event a periodic review reveals an
adverse impact on quality. Corrective
actions could include termination of the
program, removal of the relevant
measure from the program, removal of
the relevant measure from the
calculation of physician payments, or
termination of the physician from the
program. We are considering whether
corrective actions could also include
modification of a performance measure
and, if so, under what conditions.
However, we would prohibit the
discontinuation of a performance
measure for the purpose of increasing
the payment to the participating
physicians in the next period. Also,
although we do not want to encourage
practice patterns that result in reduced
or poor quality patient care, we do not
believe it is appropriate to permit the
discontinuation of a performance
measure because the participating
physicians are unable to earn a shared
savings payment related to that
measure. We are interested in comments
addressing the appropriate corrective
actions and how best to incorporate a
corrective action requirement into the
regulatory text of the exception.
We are proposing to require that
participation in the program be limited
to those physicians who are members of
the hospital’s medical staff at the
commencement of the program. We
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believe that this would protect against
abusive programs that serve as
inducements to attract physicians from
competing hospitals. However, we are
soliciting comments on whether and, if
so, how a physician who joins the
medical staff at the hospital as part of
the normal cycle of workforce demands
for care delivery could be permitted to
participate in an incentive payment or
shared savings program (either
individually or as part of a qualified
physician organization, as described
below) that began before he or she
joined the medical staff of the hospital.
We are also proposing that physicians
participating in an incentive payment or
shared savings program, or in a
particular performance measure or
measures within an incentive payment
or shared savings program, must do so
in ‘‘pools’’ of five or more participating
physicians among whom the aggregate
incentive payment available for, or cost
savings that result from, the efforts of
the physicians in the ‘‘pool’’ with
respect to a particular measure would be
shared on a per capita basis. A qualified
physician organization could itself
constitute an eligible pool, provided
that it is comprised of at least five
participating physicians. Otherwise,
participating physicians in the qualified
physician organization would need to
be grouped by the hospital into pools of
at least five participating physicians.
The distribution of incentive payment
and shared savings program payments
must be supported by written
documentation. As an additional
safeguard, we are proposing to require
that physician ‘‘pools’’ be formed at the
commencement of the program. We are
interested in comments about our
proposal to require hospitals to create
pools for purposes of physician
participation in incentive payment and
shared savings programs and the
minimum number of physicians needed
to comprise a ‘‘pool’’ that adequately
reduces the risk of program or patient
abuse. Specifically, we are interested in
comments on whether and, if so, how
we should address the ‘‘pooling’’ of
funds for payment purposes in an
incentive payment or shared savings
program targeted at a specific medical
specialty or hospital department in
which the physicians on the medical
staff in that specialty or department or
in the physician organization total fewer
than five physicians.
We are proposing also that a hospital
may not determine eligibility for
physician participation in a program
based on the volume or value of
referrals or other business generated
between the parties. We are also
considering, and soliciting comments
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about, conditioning protection under
the exception on the hospital offering
the opportunity to participate in the
incentive payment or shared savings to
all physicians on the medical staff who
belong to the department or practice in
the specialty relevant to the program
(for example, the opportunity to
participate in a shared savings program
for cardiac surgery would have to be
offered to all cardiac surgeons on the
hospital’s medical staff).
To qualify for protection under the
proposed exception, an incentive
payment or shared savings program may
not limit the discretion of physicians to
make medically appropriate decisions
for their patients, including, but not
limited to, decisions about tests,
treatments, procedures, services,
supplies or discharge. Although
incentive payment and shared savings
programs may condition program
payments on particular physician
choices, to be protected under the
proposed exception, such programs
could not limit other choices for which
physicians would not receive program
payments. In particular, a hospital must
not limit the availability of any specific
item, supply or device, including new
technology that is linked through
objective evidence to improved
outcomes and is clinically appropriate
for a particular patient, and must permit
individual physicians access to the
same selection of items, supplies and
devices that was available to them prior
to the physician’s participation in the
program. We are not requiring physician
access to items, supplies and devices
that were not available prior to the
commencement of the incentive
payment or shared savings program.
Rather, a hospital must make available
to a participating physician at least the
same selection available to the
physician prior to his or her
participation in the incentive payment
or shared savings program, which
already may have been restricted by
hospital policy, but without payment to
physicians based on such situations.
We recognize that some shared
savings programs are designed to
channel the physician’s selection of
physician preference items toward a
limited number of choices; however, we
believe that, to safeguard the program
and its beneficiaries against abuse,
physicians participating in a shared
savings program must have access to
items or supplies that they deem
medically necessary for an individual
patient’s care. This would include new
technology, provided that it meets the
same Federal regulatory standards (for
example, approval by the Food and
Drug Administration (FDA) and
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Medicare or Medicaid coverage
decisions) as the items or supplies
included in the program. By including
this requirement, we intend that
programs would ensure access to
clinically appropriate new technology
while, at the same time, protect patient
safety. For example, if a program
includes three alternative, FDAapproved devices for a particular
procedure, the hospital sponsoring the
program could limit access to new
technology that is experimental (that is,
not FDA-approved), but could not limit
access to FDA-approved alternative
devices/technology. We note also that
items, supplies and devices in a product
standardization program (that is a cost
savings action under a shared savings
program) should not be selected on the
basis of a participating physician’s
ownership or investment interest in, or
compensation arrangement with, the
manufacturer or distributor of the item,
supply or device, or his or her interest
in a group purchasing organization
(GPO) that arranges for the purchase of
the item, supply or device. In this
regard, we would strongly recommend,
and may require, that such physicians
be barred from participating in any
manner in the design or implementation
of an incentive payment or shared
savings program that involves items,
supplies or devices in which the
physician has a financial interest. We
are proposing that a physician (or
qualified physician organization) could
not receive a payment under an
incentive payment or shared savings
program for the use of an item, supply
or device if he or she (or the qualified
physician organization) has an
ownership or investment interest in, or
a compensation arrangement with, a
manufacturer or distributor of the item,
supply or device, or GPO that arranges
for the purchase of the item, supply or
device.
iv. Requirements Related to Payments
Made Under an Incentive Payment or
Shared Savings Program
To reduce the risk that incentive or
shared savings program payments might
be used to encourage or reward referrals
to the hospital or provide incentives to
engage in other abusive practices, such
as stinting or cherry picking, we are
proposing that payments made to
physicians participating in the incentive
payment or shared savings program be
distributed on a per capita basis. We are
interested in public comments that may
outline alternate approaches to the per
capita payment model for the
distribution of incentive payments or
shared savings payments, such as
paying a physician more or less
according to whether he or she
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contributed more or less to the
achievement of the performance
measures included in the incentive
payment or shared savings program.
We believe that safeguards are
necessary to ensure that incentive
payment and shared savings programs
do not result in altered referral patterns
and to reduce the risk that programs
will become vehicles used to reward
referring physicians. To address this, we
are proposing that remuneration paid to
a participating physician or a qualified
physician organization may not include
any amount that takes into account the
provision a greater volume of Federal
health care patient procedures or
services than the volume provided by
the participating physician or qualified
physician organization during the
period of the same length immediately
preceding the commencement of the
program as that covered by the payment.
We are interested in comments
regarding whether and, if so, how to
account for volume changes due to
market forces and physician practice
growth.
We are also proposing that the
amount of the remuneration paid to the
physician or qualified physician
organization be limited in duration and
amount. With respect to duration, we
are proposing that protected programs
be no shorter than 1 year and no longer
than 3 years. With respect to a limit on
the amount of payments, we are
proposing two types of limits, which we
might adopt separately or together.
First, we are proposing a limit on
payments expressed as a set percentage
of the savings available to the hospital
as a result of the changes in clinical or
administrative practices of the
participating physicians. Although not
incorporated into the proposed
regulation text, we are specifically
considering a flat 50 percent limit on
the sharing of cost savings (regardless of
the length of the program), and are
considering whether to require ‘‘rebasing,’’ depending on the length of the
program. We are interested in comments
regarding whether this ‘‘cap’’ on
payments is appropriate, too high, or too
low. We are interested also in comments
regarding whether and, if so, how we
should limit payments under a multiyear incentive payment or shared
savings program to an amount that
would be actuarially equivalent to the
amount of the payments made under a
1-year program. We are considering also
‘‘scaled’’ limits for programs longer than
1 year. Under the scaled limits
approach, we would not require rebasing (as further described below), but
would require that payments to
physicians decrease over the course of
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the performance measure. For purposes
of calculating the actual payments to the
physician, we are proposing that cost
savings be measured by comparing the
hospital’s actual acquisition costs for
the items and supplies or costs of
delivering the specified services that are
subject to the incentive payment or
shared savings program to the hospital’s
baseline costs for the same items,
supplies or services during the 1-year
period immediately preceding the
commencement of the program.
Second, we are proposing a limit on
payments to address the risk that
physicians will continue to receive
financial rewards for already
implemented changes in clinical or
administrative practices. This second
limit would require that payments made
under an incentive payment or shared
savings program must take into account
any payments that have already been
made for performance measures already
achieved (‘‘re-basing’’). We are
considering a re-basing approach under
which, at the end of year one, the
hospital would re-base performance
measures such that available payment
would be based on the difference
between the hospital’s then-current
level for a particular performance
measure and the goal established for
that performance measure. This
approach would apply similarly to
incentive payments made exclusively
for improvements in patient care quality
that are unrelated to the achievement of
cost savings. We are soliciting
comments specifically as to whether
requiring the re-basing of ‘‘quality-only’’
payments is a necessary safeguard
against program or patient abuse, or
whether a different approach for
limiting such payments could be
implemented that would safeguard
against risk to the Medicare program or
its beneficiaries. We are also soliciting
comments on whether we should
require re-basing at all and, if so, under
what parameters and whether parties
should be free to choose the frequency
of the payment and re-basing periods
under the incentive payment or shared
savings program. In no event would a
hospital be permitted to increase the
incentive payment or shared savings
payment potentially available to
physicians as a result of the re-basing.
By way of illustration, assume that
one objective cost saving measure in the
program is to decrease from 80 percent
utilization of a specified item during a
particular surgical procedure (the
hospital’s historical utilization rate for
the item) to 20 percent utilization (the
national average for utilization of the
item). Under an approach that requires
re-basing, if, after completion of the first
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year of the program, the hospital’s
utilization of the specified item
decreased to 60 percent of surgical
procedures, for year 2 of the
arrangement, the participating
physicians could receive payment only
for any reduction below 60 percent
utilization of the specified item, that is,
the new ‘‘historical’’ baseline utilization
rate would be 60 percent and all cost
savings and waste reduction for the
upcoming year would be measured
against the new baseline utilization rate.
If, after completion of year one, the
hospital’s utilization of the specified
item increased to 90 percent, the
hospital would be prohibited from rebasing the utilization rate higher than
the initial 80 percent utilization rate
determined at the commencement of the
incentive payment or shared savings
program. The participating physicians
would, in the aggregate, be eligible to
receive as a shared savings payment the
same percentage of cost savings
throughout the term of the program.
Using the same figures, under an
approach that requires scaling of the
payments over the course of the
arrangement, the physicians
participating in the program would be
eligible for a decreasing percentage of
cost savings over the course of the
arrangement. Assume, for example, we
adopted an approach that permitted
shared savings payments of up to 50
percent for year one, up to 35 percent
for year two, and up to 20 percent for
year three. If a particular cost savings
measure generated savings of $100,000
the first year, $150,000 the second year,
and $200,000 the third year (all relative
to the historical baseline utilization rate
established at commencement of the
program), the participating physicians
would be eligible for a total of 50
percent of $100,000 (or $50,000) the first
year, a total of 35 percent of $150,000
(or $52,500) the second year, and 20
percent of $200,000 (or $40,000) the
third year. We are also considering
protecting programs in which dollar
limits are expressed as fixed dollar
amounts rather than percentages.
Each of the approaches described
above could be adopted to the exclusion
of or in concert with each other. We are
interested in comments regarding
whether the exception should include
one or more of the payment limit
alternatives, as well as comments
regarding other appropriate limitations
for the amount and nature of the
payments made under an incentive
payment or shared savings program.
Regardless of which approach we adopt,
we are proposing to require that
payments based on cost savings be
calculated on the hospital’s actual
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acquisition costs for the items at issue,
as well as the costs involved in
providing the specified services and that
they be calculated on the basis of all
patients, regardless of insurance
coverage (subject to the cap on payment
for Federal health care program
beneficiaries described above). We are
seeking comments regarding whether
these conditions are appropriate and
whether we should permit modification
under other or different circumstances.
We do not intend to protect
arrangements in which physicians
receive payments for actions taken that
result in a reduction below a
predetermined target. For example, in
the first hypothetical (under the
required re-basing approach), no
payments could be made for reductions
below 20 percent utilization. We intend
to require that the target thresholds use
objective historical and clinical
measures that are reasonably related to
the practices and the patient population
at the hospital. We are mindful that
some performance measures may not be
amendable to such utilization ‘‘floors’’
or ‘‘ceilings.’’ We are considering
including comparable safeguards for
measures that may not be readily
amenable to percentage ‘‘floors’’ and
‘‘ceilings’’, such as measures related to
product substitution and product
standardization. For example, the fact
that the substitution of one product for
another would not adversely impact
quality might need to be supported by
substantial objective medical evidence.
We are soliciting comments on what
kinds of quality controls are appropriate
for performance measures that are not
amendable to utilization ‘‘floors’’ and
‘‘ceilings.’’ We are considering whether
and, if so, how this concern can be
addressed by requiring that the parties
obtain a fully independent clinical
review by a qualified party of the
program measures prior to
implementing the program. We are
soliciting comments on appropriate
quality safeguards in such situations.
We recognize that parties might want
to structure arrangements so that
payments are made by the hospital to a
physician organization that would not
meet our proposed definition of a
qualified physician organization. This
might be the case if incentive payment
or shared savings payments are made by
a hospital to a multi-specialty physician
practice composed of participating and
non-participating physicians (for
example, a group composed of cardiac
surgeons and cardiologists, in the case
of a cardiac surgery shared savings
program). We are considering whether
to extend the proposed exception to
cover payments from a hospital to such
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physician organizations and, if so,
under what conditions we could do so
that would pose no risk of program or
patient abuse. We are concerned that
payments made to such physician
organizations may become conduits to
reward non-participating physicians for
referrals. On the other hand, we
recognize that programs structured so
that hospitals make payments to
physician organizations rather than to
individual physicians may be
administratively easier for hospitals to
operate. (We note that, in some cases,
payments from hospitals to physician
organizations that are not qualified
physician organizations might fit in the
existing exception for indirect
compensation arrangements, depending
on the circumstances.)
We are considering several options to
address this issue. First, we are
considering an approach that would
allow hospitals to make incentive
payment or shared savings payments to
individual physicians indirectly by
passing the payment through the
physician’s physician organization.
Under this approach, the total amount
of the payment earned by the physician
under the incentive payment or shared
savings program would need to be
passed through to the physician, except
amounts required for income tax and
other regular withholding. Under this
approach, the physician organization
would simply operate as a pass-through
entity. The physician organization
would be prohibited from retaining any
portion of the incentive payment or
shared savings payment (except,
potentially, for required withholdings to
be paid on behalf of the participating
physician). We are soliciting comments
about this approach and what types of
payments the physician organization
could withhold (for example, whether
the physician organization should be
permitted to withhold required
contributions to a qualified retirement
plan).
We are concerned about the difficulty
hospitals might encounter in ensuring
that the physician organization
accurately and fully passes through the
full payment to the participating
physician, and we are concerned about
the risk of fraud and abuse if the
payment mechanism were manipulated
so that the physician organization
retains a portion of the payments for its
own benefit. Such gaming of the
payment structure could result in
improper remuneration from the
hospital to the physician organization
for referrals (and would not fit in the
proposed or any other exception to
section 1877 of the Act). We are
interested in comments about how to
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craft safeguards for the exception to
prevent this type of potential abuse. In
this regard, we are considering requiring
that the physician organization
document all amounts received and
distributed to participating physicians,
as well as any income tax or regular
withholding payments made on behalf
of the participating physician. In
addition, we would require that the
physician organization’s obligations
with respect to ‘‘pass through’’
payments be included in the written
agreement between the parties and that
the physician organization be a
signatory (in addition to the hospital
and the participating physician) to the
agreement. We are soliciting comment
on these and any other safeguards
necessary to ensure that payments are
appropriately passed through to
participating physicians.
Second, we are considering whether,
without posing a risk of program or
patient abuse, we could expand the
definition of a ‘‘qualified physician
organization’’ to which protected
payments can be made to include
physician organizations comprised of
some physicians who are not
participating physicians. This approach,
if implemented, would have the effect of
protecting payments made directly to
such physician organizations (rather
than directly to individual physicians or
‘‘passed through’’ the physician
organization), provided that all other
requirements of the exception were
satisfied. We would adopt this approach
only if we could do so in a manner that
would not result in payments to
physicians whose only contributions to
the hospital’s incentive payment or
shared savings program are potential
referrals. If we expand the definition of
a qualified physician organization, we
envision a requirement that would
permit only participating physicians to
share in the incentive or shared savings
payments. Our concerns described
above about the difficulty hospitals
would experience in monitoring the
payments and the risk of manipulation
to benefit referral source physicians or
the physician organization as a whole
are heightened with this approach. If we
were to adopt this approach, we would
include the proposed safeguards
described above in connection with the
pass-through payments proposal. In any
event, we do not intend to protect
arrangements that reward passive
physicians who receive payments but
do not participate in the achievement of
the patient care quality or cost savings
measure goals.
One benefit of protecting programs
that are structured so that payments are
made from the hospital to a physician
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organization would be to avoid potential
confusion that might be caused by the
physician ‘‘stand in the shoes’’
provisions in § 411.354(c)(2) (under
which a physician is considered to have
the same compensation arrangements
with the same parties and on the same
terms as his or her physician
organization with respect to whether
remuneration is permissible under an
exception). We are interested in
comments on the relationship of the
proposed exception to the ‘‘stand in the
shoes’’ provisions. We are also
interested in comments regarding
whether the new exception, if adopted,
should be included in § 411.357, or
whether it would be preferable to
include it in § 411.355 or elsewhere in
the physician self-referral regulatory
scheme.
v. Requirements Related to the
Arrangement Between a Hospital and
the Participating Physician or Qualified
Physician Organization
We are proposing to include in the
exception certain criteria that are
common to most of the exceptions to the
physician self-referral prohibition for
compensation arrangements, namely,
that the arrangement be set out in
writing, signed by the parties, have a
minimum term of 1 year and a
maximum term of 3 years, and specify
compensation that is set in advance,
does not vary during the term of the
arrangement, and is not determined in
a manner that takes into account the
volume or value of referrals or other
business generated between the parties.
We are proposing to require that the
written agreement between the hospital
offering the program and the physicians
participating in the program document
the performance measures against
which the performance of the
participating physicians will be
measured. In addition, we are proposing
that each performance measure
(including, for example, specific cost
savings measures) and the payments
resulting from the achievement of
established targets must be delineated
separately and clearly. We believe
transparency is crucial to ensure that
the incentive payment or shared savings
program does not pose a risk of program
or patient abuse. However, we are
interested in comments regarding
whether and, if so, how total (or
‘‘global’’) savings for a particular
department or service line can be
included in the program and sufficiently
monitored, accounted for, and
distributed so as not to pose a risk of
program or patient abuse and to permit
transparency of the program.
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As in all exceptions issued using our
authority under section 1877(b)(4) of the
Act, we are proposing to include a
requirement that the arrangement does
not violate the anti-kickback statute or
any Federal or State law or regulation
governing billing or claims submission.
This is necessary to ensure that the
arrangement does not pose a risk of
program or patient abuse, the standard
for all exceptions issued using this
authority.
In order to promote transparency and
foster accountability, we are proposing
to require that the arrangement between
the parties require written disclosure to
patients affected by the program
regarding the nature of the program and
the physician’s or qualified physician
organization’s participation in the
program prior to admission to the
hospital, or, if pre-admission disclosure
is not feasible, prior to the procedure or
other treatment to which the program is
applicable. Affected patients include
those patients whose patient care at the
hospital relates to any of the measures
that are part of the program. For
example, a patient being admitted to a
hospital for cardiac surgery should
receive a disclosure if the hospital
operates an incentive payment or shared
savings program related to cardiac
surgery and his or her physician
participates in that program. We are
considering whether patients should be
permitted to opt out of a measure that
might otherwise apply to their care and
are seeking comments regarding
whether and how this would work in
practice.
Finally, we are proposing the
following additional safeguards. We are
interested in comments regarding how
to incorporate these requirements into
the regulation text. First, to guard
against cherry picking or other abuse,
the case severity, and the ages and
payers of the patient population treated
by the participating physician under the
arrangement must be monitored using
generally-accepted standards. The
monitoring could be conducted by an
independent outside party or by a
committee composed of representatives
of the hospital and participating
physicians. If there are significant
changes from the hospital’s historical
measures, the physician at issue must be
terminated from participation in the
arrangement. The monitor should also
assess these characteristics in the
aggregate across all participating
physicians; if there are significant
changes, the program should be
terminated. Second, physicians are only
eligible for payments that are related to
their own efforts, combined with the
efforts of the other physicians in their
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pool, at meeting cost savings measures
or achieving patient care quality
measures; that is, a physician is eligible
to receive only a per capita share of that
portion of an available incentive
payment or shared savings payment
attributable to the efforts of his or her
pool. Third, all measures should be
uniformly applied to all patients
including Medicare beneficiaries (that
is, the measures should not be applied
disproportionately to Medicare
beneficiaries). Procedures or treatments
subject to the incentive payment or
shared savings program should not be
performed disproportionally on Federal
health care program beneficiaries. We
are also considering and interested in
comments regarding a requirement that
the hospital offering an incentive
payment or shared savings program
audit the calculation of cost savings and
payments made under the program. To
this end, we are interested in comments
regarding the formality of such an audit;
that is, should we permit the hospital to
complete the audit internally, or should
we require an independent financial
audit of the books and records related to
the incentive payment or shared savings
program.
We would also require that incentive
payment and shared savings programs
must not involve the counseling or
promotion of a business arrangement or
other activity that violates any Federal
or State law. In addition, we are
proposing that the full range of
documentation developed and
maintained in connection with
compliance with the new exception be
retained and made available to the
Secretary upon request.
submission by program instruction or
otherwise which may include
submission of such data on Part B
claims. Section 1848(k)(3)(B) of the Act
specifies that for the purpose of the
quality reporting system, eligible
professionals include physicians, other
practitioners as described in section
1842(b)(18)(C) of the Act, physical and
occupational therapists, and qualified
speech-language pathologists. Section
101(c) of the MIEA–TRHCA, as
amended by the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (Pub.
L. 110–173) (MMSEA), authorizes
‘‘Transitional Bonus Incentive Payments
for Quality Reporting’’ in 2007 and
2008, for satisfactory reporting of
quality data, as defined by section
101(c)(2) of the MIEA–TRHCA. We have
named this quality reporting system, the
‘‘Physician Quality Reporting Initiative
(PQRI)’’ for ease of reference.
b. PQRI for 2007
For 2007, the Secretary is authorized
to pay an incentive payment equal to 1.5
percent of the estimated total allowed
charges for all covered professional
services furnished during the reporting
period. The reporting period for the
PQRI for 2007 is defined by MIEA–
TRHCA as the period beginning on July
1, 2007, and ending on December 31,
2007. For 2007, PQRI data submission
was limited to claims-based submission
based upon specifications and
instructions posted on the CMS Web
site for 74 PQRI measures.
Preliminary PQRI participation
information through November 2007
indicates that approximately 100,000
professionals, or about 16 percent, of
eligible professionals who could have
O. Physician Quality Reporting Initiative reported quality data on one or more of
the 74 2007 PQRI quality measures
(PQRI)
submitted PQRI quality data at least
[If you choose to comment on issues
once during the 2007 reporting period.
in this section, please include the
This number includes professionals
caption ‘‘PQRI’’ at the beginning of your from all 50 States, the District of
comments.]
Columbia, Puerto Rico, and the Virgin
Islands. In our regions with the highest
1. Program Background and Statutory
participation, reporting rates are
Authority
approaching 20 percent, with some
a. Division B of the Tax Relief and
States achieving reporting rates of
Health Care Act of 2006—Medicare
around 30 percent. Nationally, there
Improvements and Extension Act of
were above average rates of
2006 (MIEA–TRHCA): Requirements for participation by eligible professionals
the PQRI Program
furnishing services relevant to the
following three types of care: anesthesia
Section 101(b) of the MIEA–TRHCA
services; eye care; and emergency care.
amended section 1848 of the Act by
Participation rates have trended
adding subsection (k). Section
upwards during the 2007 reporting
1848(k)(1) of the Act requires the
Secretary to implement a system for the period. Based on expanded measures,
new reporting options and other factors,
reporting by eligible professionals of
data on quality measures as described in we anticipate that trend will continue
for 2008. Further details of the PQRI for
section 1848(k)(2) of the Act. Section
2007 are provided on the PQRI section
101(b) authorizes the Secretary to
of the CMS Web site at: https://
specify the form and manner for data
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www.cms.hhs.gov/PQRI/
33_2007_General_Info.asp#TopOfPage.
Incentive payments and access to
confidential reports on measures
reporting rates and measures
performance rates for 2007 are
scheduled to begin in mid-July 2008.
c. PQRI for 2008
Section 1848(k)(2)(B)(ii) of the Act, as
added by the MIEA–TRHCA, required
the Secretary to publish a proposed set
of quality measures for 2008 by August
15, 2007 and provide for a period of
public comment. Section
1848(k)(2)(B)(i) of the Act, as added by
the MIEA–TRHCA provides that for
purposes of reporting data on quality
measures for covered professional
services furnished in 2008, such
measures shall be measures that have
been endorsed or adopted by a
consensus organization, such as the
National Quality Forum (NQF) or the
AQA Alliance (AQA), that include
measures that have been submitted by a
physician specialty, and that the
Secretary identifies as having used a
consensus-based process for developing
such measures. In addition, the
measures shall include structural
measures, such as the use of electronic
health records (EHRs) and electronic
prescribing technology.
In the CY 2008 PFS proposed rule (72
FR 38196 through 38199), we provided
a detailed discussion of the MIEA–
TRHCA requirements and the PQRI. We
explained our interpretation of
applicable statutory and governmentwide policies relevant to defining a
consensus-based measure development
process, as well as our policy for
determining which measures meet
requirements for inclusion in PQRI for
2008.
To meet the MIEA–TRHCA
requirement to publish proposed 2008
PQRI measures by August 15, 2007, we
published 148 proposed 2008 PQRI
quality measures in the CY 2008 PFS
proposed rule (72 FR 38199 through
38202). We invited comments on the
proposed measures and on our plans to
explore mechanisms for submission of
electronic clinical performance
measurement information and summary
measure results information extracted
from EHRs and clinical data registries.
In the CY 2008 PFS final rule with
comment period (72 FR 66336 through
66359), we responded to public
comments received on the PQRI section
of the CY 2008 PFS proposed rule (72
FR 38196 through 38204) and we
finalized 119 measures that we
determined under the MIEA–TRHCA
and other applicable statutory
requirements to be appropriate for
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eligible professionals to use to submit
such data under the 2008 PQRI. In
addition, we described our plans to test
quality measures data submission
mechanisms, other than claims, based
on clinical data registries and EHRs in
2008.
The 2008 measures specifications are
available on the PQRI section of the
CMS Web site at https://
www.cms.hhs.gov/PQRI/
15_MeasuresCodes.asp#TopOfPage.
These detailed specifications include
instructions for reporting and identify
the circumstances in which each
measure is applicable.
d. Extension of and Enhancements to
the PQRI Program Authorized by the
MMSEA
The MMSEA, which was enacted on
December 29, 2007, authorizes us to
make incentive payments for
satisfactorily reporting quality measures
data on covered professional services
furnished in 2008 equal to 1.5 percent
of the estimated total allowed charges
for all covered professional services
furnished during the reporting period.
For 2008, the reporting period is defined
to mean the entire calendar year. In
addition, while MIEA–TRHCA
established a cap on incentive payments
for the 2007 PQRI, based on an average
per measure payment amount, there is
no cap on incentive payments under
MMSEA for the 2008 PQRI.
MMSEA also introduced
enhancements that result in more
opportunities for eligible professionals
to participate in the PQRI for 2008. For
2008 and 2009, section 101(c)(5)(F) of
the MIEA–TRHCA, as added by the
MMSEA, requires the Secretary to
establish alternative reporting periods
and alternative criteria for satisfactorily
submitting data on quality measures
through medical registries and for
reporting groups of measures. For 2008,
these alternative reporting periods and
reporting criteria were posted on April
16, 2008 in ‘‘2008 PQRI: Establishment
of Alternative Reporting Periods and
Reporting Criteria’’ document found on
the PQRI section of the CMS Web site
at https://www.cms.hhs.gov/PQRI/
Downloads/
2008PQRIalterrptperiods.pdf. They
supplement the single reporting period
and the reporting criteria previously set
forth in the CY 2008 PFS final rule with
comment period (72 FR 66357 through
66359) which were limited to claimsbased submission of individual 2008
PQRI measures.
For 2008, each eligible professional
who satisfactorily reports under any of
the options set forth in the ‘‘2008 PQRI:
Establishment of Alternative Reporting
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18:46 Jul 03, 2008
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Periods and Reporting Criteria’’
document or for the reporting period
and under the reporting criteria set forth
in the CY 2008 PFS final rule with
comment period will be eligible for a 1.5
percent incentive payment for services
furnished during the applicable
reporting period. An eligible
professional may potentially qualify as
satisfactorily reporting under more than
one of the reporting criteria and for
more than one reporting period.
However, this will result in only one
incentive payment for 2008, which will
be equivalent to 1.5 percent of allowed
charges for PFS covered professional
services furnished during the longest
reporting period for which the eligible
professional satisfactorily reports.
e. PQRI for 2009
Section 1848(k)(2)(B)(ii) of the Act, as
amended by the MMSEA, requires the
Secretary to publish a proposed set of
quality measures that would be
appropriate for eligible professionals to
use to submit data in 2009 in the
Federal Register by August 15, 2008.
Such measures shall be measures that
have been endorsed or adopted by a
consensus organization, such as the
NQF or the AQA, that include measures
that have been submitted by a physician
specialty, and that the Secretary
identifies as having used a consensusbased process for developing such
measures. In addition, the measures
shall include structural measures, such
as the use of EHRs and electronic
prescribing technology.
The measures proposed for the 2009
PQRI are outlined in section II.O.4. of
this proposed rule, ‘‘Proposed 2009
PQRI Quality Measures.’’ Section
1848(k)(2)(B)(iii) of the Act, as amended
by the MMSEA, requires the Secretary
to publish the final set of measures in
the Federal Register no later than
November 15, 2008. The final set of
2009 PQRI quality measures will be
identified in the CY 2009 PFS final rule
with comment period.
The MIEA–TRHCA does not
statutorily define a specific reporting
period for 2009. However, as for 2008,
the Secretary is required to establish
alternative reporting periods and
alternative reporting criteria for
reporting measures groups and for
registry-based reporting for 2009. For
the 2009 PQRI, we propose to define the
reporting period for PQRI to mean the
entire 2009 calendar year but also
propose additional reporting options for
satisfactorily reporting quality measures
data based on alternative reporting
criteria and reporting periods
authorized by MMSEA for measures
groups and registry-based reporting,
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which are described in section II.O.2. of
this proposed rule, ‘‘Satisfactory
Reporting Criteria and Reporting
Periods—Reporting Options in the 2009
PQRI.’’
Unlike 2007 and 2008, MIEA–TRHCA
does not authorize an incentive
payment for PQRI for 2009. Currently,
no legislation exists that authorizes us
to make incentive payments for
satisfactorily reporting data on quality
measures for services furnished in 2009
or beyond. Given that currently there is
no specific authorization for an
incentive payment for the 2009 PQRI,
meeting the satisfactory reporting
criteria of this proposed rule will not
result in an incentive payment for
satisfactorily reporting data for covered
professional services furnished in 2009.
2. Satisfactory Reporting Criteria and
Reporting Periods—Reporting Options
in the 2009 PQRI
For the 2009 PQRI, we propose to
define the reporting period to mean the
entire year (January 1, 2009—December
31, 2009.) We also propose to establish
two alternative reporting periods: (1)
January 1, 2009 through December 31,
2009; and (2) July 1, 2009 through
December 31, 2009 for reporting
measures groups and for registry-based
reporting. As proposed, this results in
several reporting options available to
eligible professionals that vary by the
reporting mechanism selected. We
believe that the availability of several
reporting options will increase
opportunities for eligible professionals
to satisfactorily report quality data for
the PQRI and will augment the amount
of information submitted about the
quality of care provided by eligible
professionals to Medicare beneficiaries.
The reporting mechanisms and
reporting options proposed for the 2009
PQRI are described in the following
section.
a. Claims-Based Submission of Data for
Reporting Individual Measures
Under Section 101(c)(2) of the MIEA–
TRHCA the criteria for satisfactorily
submitting data on quality measures
require the reporting of at least three
applicable measures in at least 80
percent of the cases in which the
measure is reportable. If fewer than
three measures are applicable to the
services of the professional, only data
on applicable measures are required to
be submitted.
For the 2009 PQRI, we propose to
retain these criteria for claims-based
reporting of individual measures for the
January 1, 2009—December 31, 2009
reporting period. As summarized in
Table 7, an eligible professional could
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meet the criteria for satisfactorily
reporting quality data by reporting at
least three applicable measures (or one
to two measures if fewer than three
measures apply) for at least 80 percent
of the cases in which each measure is
reportable, during January 1, 2009
through December 31, 2009.
TABLE 7:—PROPOSED 2009 PQRI CLAIMS-BASED REPORTING OPTIONS FOR INDIVIDUAL MEASURES
Reporting criteria
Claims-based reporting ......................
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Reporting mechanism
At least 3 PQRI measures, or 1–2 measures if fewer
than 3 apply to the eligible professional, for 80% of
applicable Medicare Part B FFS patients of each eligible professional.
b. Satisfactory Reporting of Data on
Quality Measures and Reporting Periods
for Measures Groups, Through ClaimsBased Reporting and Registry-Based
Reporting
Section 101(c)(5)(F) of the MIEA–
TRHCA, as added by the MMSEA,
requires that for the 2008 and 2009
PQRI the Secretary establish alternative
reporting periods and alternative criteria
for satisfactorily reporting groups of
measures. In establishing these
alternatives, CMS has labeled these
groups of measures ‘‘measures groups.’’
We define ‘‘measures groups’’ as a
subset of PQRI measures that have a
particular clinical condition or focus in
common. The denominator definition
and coding of the measures group
identifies the condition or focus that is
shared across the measures within a
particular measures group.
We believe that reporting measures
groups is an important step to advance
the PQRI program toward a more
holistic and comprehensive assessment
of patient care. By addressing several
aspects of care for a particular clinical
condition or clinical focus, measures
groups results can help assure that
patients are receiving a range of care
appropriate for a given clinical
condition or clinical focus. Because of
this, we believe that groups of measures
may often provide more meaningful
information about the care being
furnished to Medicare beneficiaries than
can individual measures in isolation.
Measures groups also allow physicians
and other eligible professionals to more
broadly demonstrate their clinical
performance for particular services and
thereby provide a better basis for
comparison among professionals.
Measures groups can also decrease
complexity of reporting by identifying
related measures applicable to the same
services furnished to the same
beneficiaries by the same professional
and highlighting a common set of
denominator codes across all the
measures of a group that help identify
those patients.
As described in the ‘‘2008 PQRI:
Establishment of Alternative Reporting
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Reporting period
Periods and Reporting Criteria’’
document (https://www.cms.hhs.gov/
PQRI/Downloads/
2008PQRIalterrptperiods.pdf ), there are
four measures groups for the 2008 PQRI:
(1) Diabetes Mellitus, (2) End-Stage
Renal Disease (ESRD), (3) Chronic
Kidney Disease (CKD), and (4)
Preventive Care. For the 2009 PQRI, we
propose to expand the available
measures groups to a total of nine, as
well as propose a variety of reporting
options for reporting on measures
groups. In addition to carrying forward
three of the four 2008 measures groups,
we propose to add six new measures
groups for the 2009 PQRI. The ESRD
Measures Group for the 2008 PQRI is
not being proposed for 2009 because
one of the measures in the group is no
longer NQF-endorsed and there are no
other ESRD measures proposed for the
2009 PQRI that could be added to this
group. We propose to retain the
remaining three measures in the 2008
ESRD measures group to be available to
be reported individually in the 2009
PQRI.
Similar to the 2008 measures groups,
we propose that the measures that make
up five of these new measures groups
could be reported either individually or
as part of a measures group. These five
new measures groups address the
following:
(1) Coronary artery bypass graft
(CABG) surgery;
(2) Coronary artery disease (CAD);
(3) Rheumatoid arthritis;
(4) Human immunodeficiency virus
(HIV)/acquired immune deficiency
syndrome (AIDS); and
(5) Perioperative care.
We also propose one new measures
group for the 2009 PQRI in which the
measures would be reportable only as a
measures group, not as individual
measures. This measures group
addresses quality of services furnished
to treat back pain. The measures
proposed for inclusion in each of the
proposed 2009 measures groups are
listed in section II.O.4. of this proposed
rule, ‘‘Proposed 2009 PQRI Quality
Measures.’’
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January 1, 2009–December 31, 2009
We welcome comments on these
proposed new measures groups,
including suggestions for other
measures groups based on individual
measures included in the proposed 2009
PQRI measure set. For the 2009 PQRI,
measures groups must contain at least 4
measures. All measures in each
measures group suggested by
commenters must be included in the
proposed measures cited in section
II.O.4. of this proposed rule, ‘‘Proposed
2009 PQRI Quality Measures.’’ The
individual measures included in the
final measures groups for the 2009 PQRI
will be limited to those which are
included in the final set of measures for
PQRI 2009, as identified in the CY 2009
PFS final rule with comment period.
As in the 2008 PQRI, we are
proposing for the 2009 PQRI that
measures groups be reported through
claims-based or registry-based
submission for the 2009 PQRI. The form
and manner of quality data submission
for 2009 measures groups will be posted
on the PQRI section of the CMS Web
site at https://www.cms.hhs.gov/pqri no
later than December 31, 2008, and will
detail specifications and specific
instructions for reporting measures
groups via claims and registry-based
reporting. Please note that detailed
measure specifications and instructions
for submitting data on those 2009
measures groups that were also
included as 2008 PQRI measures groups
may be updated or modified prior to
2009. Therefore, the 2009 PQRI measure
specifications for any given measures
group may be different from
specifications and submission
instructions for the same measures
group used for 2008. Additionally, the
specifications for measures groups will
not necessarily contain all the
specification elements of each
individual measure making up the
measures group. This is based on the
need for a common set of denominator
specifications for all the measures
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making up a measures group in order to
define the applicability of the measures
group. Therefore, the specifications and
instructions for measures groups will be
provided separately from the
specifications and instructions for the
individual 2009 PQRI measures.
For the 2009 PQRI, we are proposing
three options for satisfactorily reporting
measures groups using claims-based
reporting and three options for
satisfactorily reporting measures groups
using registry-based submission. The
proposed options for satisfactorily
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reporting on measures groups are
described in Table 8. The details of the
requirements for registries are contained
in section II.O.2.c., ‘‘Registry-Based
Submission for Reporting Individual
Measures.’’
TABLE 8.—PROPOSED 2009 PQRI REPORTING OPTIONS FOR MEASURES GROUPS
Reporting mechanism
Reporting criteria
Claims-based reporting ..............................
One Measures Group for 30 Consecutive Medicare
Part B FFS Patients.
One Measures Group for 80% of applicable Medicare
Part B FFS patients of each eligible professional
(with a minimum of 30 patients during the reporting
period).
One Measures Group for 80% of applicable Medicare
Part B FFS patients of each eligible professional
(with a minimum of 15 patients during the reporting
period).
One Measures Group for 30 Consecutive Patients. Patients may include, but may not be exclusively, nonMedicare patients.
One Measures Group for 80% of applicable Medicare
Part B FFS patients of each eligible professional
(with a minimum of 30 patients during the reporting
period).
One Measures Group for 80% of applicable Medicare
Part B FFS patients of each eligible professional
(with a minimum of 15 patients during the reporting
period).
Claims-based reporting ..............................
Claims-based reporting ..............................
Registry-based reporting ............................
Registry-based reporting ............................
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Registry-based reporting ............................
There are two basic criteria for
satisfactory reporting of measures
groups. For claims-based reporting, the
two criteria are: (1) The reporting of
quality data for 30 consecutive Medicare
Part B FFS patients for one measures
group for which the measures group is
applicable during a full-year reporting
period; or (2) the reporting of quality
data for at least 80 percent of Medicare
Part B FFS patients for whom the
measures group is applicable (with a
minimum number of patients
commensurate with the reporting period
duration). For registry-based
submission, the two criteria are: (1) The
reporting of quality measures results
and numerator and denominator data
for 30 consecutive patients for one
measures group for which the measures
group is applicable during a full-year
reporting period; or (2) the reporting of
quality measures results and numerator
and denominator data for at least 80
percent of patients for whom the
measures group is applicable (with a
minimum number of patients
commensurate with the reporting period
duration).
The 30 consecutive patients reporting
criteria apply only to the entire year
(January 1, 2009 through December 31,
2009) reporting period, but apply to
both claims-based submission and
registry-based submission mechanisms.
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Reporting period
While claims are submitted to CMS on
Medicare patients only (for claims-based
reporting), consecutive patients for
registry-based submission for the
January 1, 2009 through December 31,
2009 reporting period may include
some, but may not be exclusively, nonMedicare patients. We include this
limited option to report quality
measures results and numerator and
denominator data on quality measures
that includes non-Medicare patients for
registry-based submission because of the
desirability of assessing the overall care
provided by a professional rather than
just that provided to a certain subset of
patients, and the benefit of having a
larger number of patients on which to
assess quality.
We propose that the alternative
criteria for measures groups based on
reporting on 80 percent of patients for
which one measures group be
applicable for the January 1, 2009
through December 31, 2009 reporting
period (with a minimum of 30 patients)
and to the July 1, 2009 through
December 31, 2009 reporting periods
(with a minimum of 15 patients) and for
either claims-based or registry-based
reporting of measures groups.
We have included the reporting
option for 30 consecutive patients (for
claims-based reporting, the consecutive
patients must all be Medicare FFS
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January 1, 2009–December 31, 2009.
January 1, 2009–December 31, 2009.
July 1, 2009–December 31, 2009.
January 1, 2009–December 31, 2009.
January 1, 2009–December 31, 2009.
July 1, 2009–December 31, 2009.
patients) as a means to achieve a
reasonably valid sample of patients for
performance rate calculation yet place
an upper limit on the number of
patients on which reporting would be
required, compared to the 80 percent of
patients criteria. However, unlike 2008,
we do not propose an option for 15
consecutive patients for the 6-month
reporting period. While we do not have
the results of the 2008 reporting, we are
concerned that samples of fewer than 30
consecutive patients may be insufficient
to calculate comparable performance
rates across eligible professionals
furnishing comparable services. We
expect additional experience with PQRI
reporting to clarify optimal sample sizes
and reporting criteria for use in future
reporting periods. We invite comments
on our proposed use of the consecutive
patient reporting criteria and on the use
of 30 consecutive patients (for claimsbased reporting, the consecutive
patients must all be Medicare FFS
patients) as the required sample under
these criteria during the full-year 2009
reporting period.
c. Registry-Based Submission for
Reporting Individual Measures
Under section 1848(k)(4) of the Act,
‘‘as part of the publication of proposed
and final quality measures for 2008
under clauses (i) and (iii) of paragraph
(2)(B), the Secretary shall address a
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mechanism whereby an eligible
professional may provide data on
quality measures through an appropriate
medical registry.’’ In the CY 2008 PFS
final rule with comment period, we
described using different options to test
the receipt of data from registries in
2008 (72 FR 66350 through 66352). The
two options being tested in 2008 are
data submission options 2 and 3 as
described in the CY 2008 PFS final rule
with comment period (72 FR 66352).
This testing process is ongoing, but
submissions for the testing process are
expected to conclude by September 1,
2008. Information regarding the registry
submission testing process is available
on the CMS Web site at https://www/
cms.hhs.gov/PQRI/
20_Reporting.asp#TopOfPage.
As we indicated previously, section
101(c)(5)(F) of the MIEA–TRHCA, as
added by MMSEA, authorizes us to
establish alternative criteria for
satisfactorily reporting PQRI quality
data through medical registries for 2008
and 2009. For 2008, we have established
the requirements a registry must meet to
qualify to submit data on quality
measures on behalf of eligible
professionals seeking incentive
payments in 2008. The data to be
submitted includes the reporting and
performance rates on PQRI measures or
PQRI measures groups; and, numerators
and denominators for the reporting rates
and performance rates. The
requirements that we established for
2008 include a registry self-nomination
process. The document ‘‘2008 PQRI
Registry Requirements for Submission
Under New Options’’ describes the
requirements for a registry to qualify to
submit under the registry-based
reporting alternatives for 2008. This
document is available on the PQRI
section of the CMS Web site at https://
www/cms.hhs.gov/PQRI/
20_Reporting.asp#TopOfPage. On or
before August 31, 2008, we will
announce the names of self-nominated
registries that are determined by CMS to
meet necessary technical and other
requirements to submit quality
measures results and numerator and
denominator data on quality measures
on behalf of eligible professionals
seeking an incentive under the
alternative reporting periods and criteria
applicable to registry-based submission
for reporting quality measures on
services furnished during 2008.
For 2009, we propose that eligible
professionals would be able to report
2009 PQRI quality measures data
through a qualified clinical registry by
authorizing or instructing the registry to
submit quality measures results and
numerator and denominator data on
quality measures to CMS on their
behalf. As for 2008, the data to be
submitted for 2009 includes the
reporting and performance rates on
PQRI measures or PQRI measures
groups; and, numerators and
denominators for the reporting rates and
performance rates. To do so, eligible
professionals would need to enter into
and maintain an appropriate legal
arrangement with an eligible clinical
registry. Such arrangements would
provide for the registry’s receipt of
patient-specific data from the eligible
professional and the registry’s
disclosure of quality measures results
and numerator and denominator data on
behalf of the eligible professional to
CMS for the PQRI. Thus, the registry
would act as a HIPAA Business
Associate and agent of the eligible
professional. Such agents are referred to
as ‘‘data submission vendors.’’ Such
‘‘data submission vendors’’ would have
the requisite legal authority to provide
clinical registry data on behalf of the
eligible professional to the Quality
Reporting System developed in
accordance with the statute. The
registry, acting as such a data
submission vendor, would submit
registry-derived measures information
to the CMS designated database within
the Quality Reporting System, using a
CMS-specified record layout. The record
layout will be posted on the PQRI
section of the CMS Web site at https://
www.cms.hhs.gov/pqri as soon as
practical, and no later than April 1,
2009.
To maintain compliance with
applicable statutes and regulations,
including but not limited to the Health
Insurance Portability and
Accountability Act of 1996 (Pub. L.
104–191) (HIPAA), our program and its
data system must maintain compliance
with HIPAA requirements for
requesting, processing, storing, and
transmitting data. Eligible professionals
that conduct HIPAA covered
transactions also must maintain
compliance with the HIPAA
requirements.
For the 2009 PQRI, we propose to
continue the PQRI reporting criteria for
satisfactorily reporting through registrybased submission of 3 or more
individual PQRI quality measures data
that are described in the ‘‘2008 PQRI:
Establishment of Alternative Reporting
Periods and Reporting Criteria’’
document (https://www.cms.hhs.gov/
PQRI/Downloads/
2008PQRIalterrptperiods.pdf). That is,
we propose to accept quality measures
results and numerator and denominator
data on quality measures from registries
that qualify as data submission vendors.
We propose these criteria would be
available for each of the two alternative
reporting periods. Thus, the proposed
reporting options for registry-based
submission of at least three individual
PQRI measures are listed in Table 9.
TABLE 9.—PROPOSED 2009 PQRI REGISTRY-BASED SUBMISSION REPORTING OPTIONS FOR INDIVIDUAL MEASURES
Reporting mechanism
Reporting criteria
Registry-based reporting ............................
At least 3 PQRI measures for 80% of applicable Medi- January 1, 2009–December 31, 2009.
care Part B FFS patients of each eligible professional.
At least 3 PQRI measures for 80% of applicable Medi- July 1, 2009–December 31, 2009.
care Part B FFS patients of each eligible professional.
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Registry-based reporting ............................
As discussed in section II.O.2.b. of
this proposed rule, ‘‘Satisfactory
Reporting of Data on Quality Measures
and Reporting Periods for Measures
Groups, Through Claims-Based
Reporting and Registry-Based
Reporting,’’ we also propose the three
reporting options for registry-based
submission of quality measures results
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Reporting period
and numerator and denominator data on
PQRI measures groups summarized in
Table 8.
To submit on behalf of eligible
professionals pursuing incentive
payment for reporting clinical quality
information on services furnished
during 2008 for reporting both on
individual measures and measures
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groups, we required registries to
complete a self-nomination process and
to meet certain technical and other
requirements in order to be considered
‘‘qualified’’ to submit on behalf of
eligible professionals pursuing the 2008
PQRI incentive payment. These 2008
requirements are detailed in section (g)
of the document titled: ‘‘2008 Physician
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Quality Reporting Initiative:
Establishment of Alternative Reporting
Periods and Reporting Criteria,’’ which
is posted at https://www.cms.hhs.gov/
PQRI/Downloads/
2008PQRIalterrptperiods.pdf, and in a
further document titled ‘‘Registry
Requirements to Qualify as an
Acceptable Registry for Submission of
PQRI Data On Behalf of Eligible
Professionals Seeking Payment in
2008,’’ which is posted at https://
www.cms.hhs.gov/PQRI/Downloads/
2008PQRIRegistryRequirements.pdf).
For 2009, we propose to again require
a self-nomination process based on
meeting specific technical and other
requirements in order to qualify to
submit data on 2009 PQRI quality
measures or measures groups on behalf
of eligible professionals for services
furnished in 2009. This self-nomination
will be required regardless of whether or
not the registry participated in any way
in PQRI in 2008. As in 2008, we will
make every effort to ensure that
registries that are ‘‘qualified’’ will be
able to successfully submit quality
measures results and numerator and
denominator data on PQRI quality
measures or measures groups on behalf
of their professionals. By listing a
registry as ‘‘qualified,’’ however, we
cannot guarantee or assume
responsibility for the successful
submission of data on PQRI quality
measures or measures groups. We
propose that the 2009 registry technical
requirements will be substantially the
same as for 2008. In general, to be
considered qualified to submit
individual quality measures on behalf of
professionals wishing to report under
the 2009 PQRI, a registry must:
• Have been in existence as of
January 1, 2009.
• Be able to collect all needed data
elements and calculate results for at
least three measures in the 2009 PQRI
program (according to the posted 2009
PQRI Measure Specifications).
• Be able to calculate and submit
measure-level reporting rates by
National Provider Identifier (NPI)/
Taxpayer Identification Number (TIN).
• Be able to calculate and submit
measure-level performance rates by NPI/
TIN.
• Be able to separate out and report
on Medicare Fee For Service (Part B)
patients only.
• Provide the Registry name.
• Provide the Reporting period start
date (covers dates of services from).
• Provide the Reporting period end
date (covers dates of services through).
• Provide the PQRI Measure
Numbers.
• Provide the measure titles.
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• Report the number of eligible
instances (reporting denominator).
• Report the number of instances of
quality service performed (numerator).
• Report the number of performance
exclusions.
• Report the number of reported
instances, performance not met (eligible
professional receives credit for
reporting, not for performance).
• Be able to transmit this data in a
CMS-approved XML format.
• Comply with a secure method for
data submission.
• Submit a ‘‘validation strategy’’ to
CMS by May 31, 2009. A validation
strategy ascertains whether eligible
professionals have submitted accurately
and on at least the minimum number
(80 percent) of their eligible patients,
visits, procedures, or episodes for a
given measure. Acceptable validation
strategies often include such provisions
as the registry being able to conduct
random sampling of their participants’
data, but may also be based on other
credible means verifying the accuracy of
data content and completeness of
reporting or adherence to a required
sampling method.
• Be able to include in its overall
submission whether the results for each
NPI are validated by the registry.
• Enter into and maintain with its
participating professionals an
appropriate legal arrangement that
provides for the registry’s receipt of
patient-specific data from the eligible
professionals, as well as the registry’s
disclosure of quality measure results
and numerator and denominator data on
behalf of eligible professionals who
wish to participate in the PQRI program.
• Obtain and keep on file signed
documentation that each NPI whose
data is submitted to the registry has
authorized the registry to submit quality
measures results and numerator and
denominator data to CMS for the
purpose of PQRI participation. This
documentation must meet the standards
of applicable law, regulations, and
contractual business associate
agreements.
• Provide CMS access (if requested)
to review the Medicare beneficiary data
on which 2009 PQRI registry-based
submissions are founded.
• Provide the reporting option
(reporting period and reporting criteria)
that the eligible professional has
satisfied or chosen.
• Registries must provide CMS an
‘‘attestation statement’’ which states that
the quality measure results and
numerator and denominator data
provided to CMS are accurate and
complete.
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In addition to the above, registries
that wish to submit 2009 quality
measures information on behalf of their
participating eligible professionals
seeking to participate in the 2009 PQRI
based on satisfying the criteria
applicable to reporting of measures
groups must be able to:
• Indicate whether each eligible
professional within the registry who
wishes to submit PQRI using the
measure groups will be doing so for the
6- or 12-month period.
• Include only patients who were
cared for during the twelve-month
measurement period (reporting period)
of January through December 2009 or
the 6-month measurement period
(reporting period) of July 2009 through
December 2009.
• Agree that the registry’s data may be
inspected by CMS under our health
oversight authority if non-Medicare
patients are included in the consecutive
patient group.
• Be able to report data on all of the
measures in a given measures group and
on either 30 consecutive patients from
January 1 through December 31, 2009
(note this consecutive patient count
must include some Medicare
beneficiaries) or on 80 percent of
applicable Medicare Part B FFS patients
for each eligible professional (with a
minimum of 30 patients during the
January 1, 2009 through December 31,
2009 reporting period or a minimum of
15 patients during the July 1, 2009
through December 31, 2009 reporting
period).
• If reporting consecutive patients,
provide the beginning date of service
that initiates the count of 30 consecutive
patients.
• Be able to report the number of
Medicare Fee for Service patients and
the number of Medicare Advantage
patients that are included in the
consecutive patients reported for a given
measures group.
However, for 2009, we may modify
certain aspects of the registry technical
requirements listed above, which are
based on the 2008 registry requirements
that are described in the ‘‘Registry
Requirements to Qualify as an
Acceptable Registry for Submission of
PQRI Data On Behalf of Eligible
Professionals Seeking Payment in 2008’’
document available on the CMS Web
site at https://www.cms.hhs.gov/PQRI/
Downloads/
2008PQRIRegistryRequirements.pdf)
based on our experience during the
2008 registry testing process and any
comments received on the 2009 registry
technical requirements proposed above.
We will post the final 2009 registry
technical requirements, including the
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exact date by which registries that wish
to qualify for 2009 must submit a selfnomination letter, on the PQRI section
of the CMS Web site at https://
www.cms.hhs.gov/pqri by November 15,
2008. We anticipate that registries that
wish to self-nominate for 2009 will be
required to do so by the end of the first
quarter of 2009, but not later than the
end of the second quarter of 2009.
We invite comments on the proposed
options for registry-based PQRI
reporting of data on measures and
measures groups for services furnished
in 2009.
d. EHR-Based Submission for Reporting
Individual Measures
In addition to the testing of registrybased submission, we are currently
preparing for testing the submission of
clinical quality data extracted from
EHRs for five 2008 PQRI measures. We
anticipate this testing will begin July 1,
2008 and conclude by December 31,
2008. For the 2009 PQRI, we propose to
accept PQRI data from EHRs for a
limited subset of the proposed 2009
PQRI quality measures identified in
Tables 11 and 13 (section II.O.4.,
‘‘Proposed 2009 PQRI Quality
Measures’’), contingent upon the
successful completion of our 2008 EHR
data submission testing process and a
determination that accepting data from
EHRs on quality measures for the 2009
PQRI is practical and feasible. Provided
our 2008 EHR data submission testing
process is successful, we propose to
begin accepting submission of clinical
quality data extracted from EHRs on
January 1, 2009 or as soon thereafter as
is technically feasible. The date on
which we would begin to accept quality
data submission on services furnished
in 2009 is contingent upon when we can
have the necessary information
technology infrastructure components
and capacity in place and ready to
accept data on a scale sufficient for
national implementation of PQRI
submission through this mechanism.
(Because EHR-based data submission
need not be accomplished concurrently
with the dates services are furnished or
billed, there is some latitude to begin
accepting EHR-extracted data later than
January 1, 2009, without precluding
accepting data for the proposed 2009
PQRI reporting periods.)
The electronic specifications for the
proposed 2009 PQRI measures
identified in Tables 11 and 13 that are
under consideration for EHR-based
submission in 2009 will be posted on a
public Web site when available. We will
broadly announce the availability and
exact location of these specifications
through familiar CMS communications
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channels including the PQRI section of
the CMS Web site at https://
www.cms.hhs.gov/pqri. The posting of
the electronic specifications for any
particular measure prior to publication
of the final rule does not signify that the
measure will be necessarily selected for
the 2009 PQRI measure set, nor that
EHR-based data submission will be
accepted for that measure even if it may
otherwise be included in the 2009 PQRI.
However, by posting the specifications,
we seek to allow sufficient time for EHR
vendors to adapt their products to
support EHR-based capture and
submission of data for these measures
prior to the start of any 2009 PQRI
reporting periods.
EHR vendors that would like to
enable their customers to submit data on
PQRI that is extracted from their
customers’ EHRs to the CMS-designated
clinical warehouse should update or
otherwise assure that their EHR
products capture and can submit the
necessary data elements identified for
measure specifications and technical
specifications for EHR-based
submission. We will use Certification
Commission for Healthcare Information
Technology (CCHIT) criteria and
Secretarially-recognized Healthcare
Information Technology Standards
Panel (HITSP) interoperability standards
where possible and we encourage
vendors to do so also. These are the
specifications that will be available on
a publicly accessible Web site to be
identified by CMS.
Prior to the beginning of EHR-based
quality measures data submission for
any 2009 PQRI reporting period, we will
publish (through familiar mechanisms
such as CMS e-mail lists and the PQRI
section of the CMS Web site at https://
www.cms.hhs.gov/pqri) information on
the process eligible professionals will
need to use to actually submit to the
CMS-designated clinical data warehouse
the 2009 PQRI quality measures data
extracted from their practices’ EHRs.
The process will comply with
applicable laws, regulations, and
policies for privacy, data security, and
interoperability—including but not
limited to HIPAA requirements. The
data submission process will also
require that the persons (eligible
professionals, other practice staff, or
vendors acting on the professionals’
behalf) who actually exchange data with
the clinical warehouse system obtain
and use an account (user identification
and password) on a CMS-designated
user authentication and identity
management system. We will not charge
2008 or 2009 PQRI participants any
processing or licensing fees to obtain or
maintain the required user account.
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More details on the required account
and how to obtain it will be published
prior to January 1, 2009.
We cannot assume responsibility for
the successful submission of data from
eligible professionals’ EHRs. Any
eligible professional wishing to submit
PQRI data extracted from an EHR
should contact the EHR product’s
vendor to determine if the product has
been updated to facilitate PQRI quality
measures data submission. Such
professionals should also begin
attempting submission promptly after
CMS announces in early 2009 that the
clinical data warehouse is ready to
accept 2009 PQRI quality measures data
through the EHR mechanism in order to
assure the professional has a reasonable
period of time to work with his or her
EHR and/or its vendor to correct any
problems that may complicate or
preclude successful quality measures
data submission through that EHR.
To maintain compliance with
applicable statutes and regulations,
including but not limited to HIPAA, our
program and its data system must
comply with applicable requirements
for requesting, processing, storing, and
transmitting data. Eligible professionals
that conduct HIPAA covered
transactions also must maintain
compliance with the HIPAA
requirements.
We encourage the use of EHRs that
have been certified by the CCHIT for
data submission. CCHIT certified EHRs
must meet specific standards for
functionality, privacy, security and
interoperability. More information about
CCHIT certified EHRs can be found at
https://www.cchit.org. However, we do
recognize that there will be some
eligible professionals who are using
systems in specialties for which there
are no appropriate CCHIT certified EHR
systems, or who purchased and
implemented their EHR prior to the
availability of CCHIT certification.
These programs must be capable of
generating a medication list, generating
a problem list and entering laboratory
results as discrete searchable data
elements to be able to be used for data
submission under this reporting
mechanism option.
We propose to utilize as criteria for
satisfactory submission of data for
quality measures for covered
professional services by EHR-based
submission for the 2009 PQRI the same
criteria for successful reporting and the
same reporting period that we propose
for claims-based submission of data for
individual 2009 PQRI measures. The
reporting criteria for EHR-based
submission of individual PQRI
measures are summarized in Table 10.
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TABLE 10.—PROPOSED 2009 PQRI EHR-BASED SUBMISSION REPORTING OPTIONS FOR INDIVIDUAL MEASURES
Reporting mechanism
Reporting criteria
EHR-based reporting ..................................
At least 3 PQRI measures, or 1–2 measures if less
than 3 apply to the eligible professional, for 80% of
applicable Medicare Part B FFS patients of each eligible professional.
We do not propose any option to
report measures groups through EHRbased data submission on services
furnished during 2009. Because EHR
submission to CMS of data on quality
measures is new to PQRI, for 2009 we
propose to make available only the
criteria applicable to reporting of
individual PQRI measures. We invite
comments on the proposed use of EHRbased data submission for PQRI.
3. Statutory Requirements for Measures
Included in the 2009 PQRI
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a. Overview of Requirements for the
2009 PQRI Quality Measures
Section 1848(k)(2)(B)(ii) of the Act, as
added by the MMSEA, requires CMS to
publish in the Federal Register no later
than August 15, 2008, a proposed set of
quality measures that would be
appropriate for eligible professionals to
use to submit data in 2009. In
examining the statutory requirements of
section 1848(k)(2)(B)(i) of the Act, as
amended by the MMSEA, we believe
that the requirement that measures be
endorsed or adopted by a consensus
organization applies to each measure
that would be included in the measure
set for submitting quality data and/or
quality measures results and numerator
and denominator data on the quality
measures on covered professional
services furnished during 2009.
Likewise, the requirement for measures
to have been developed using a
consensus-based process (as identified
by the Secretary) applies to each
measure. By contrast, we do not
interpret the provision requiring
inclusion of measures submitted by a
specialty to apply to each measure.
Rather, we believe this requirement
means that in endorsing or adopting
measures, a consensus organization
must include in its consideration
process at least some measures
submitted by one physician or
organization representing a particular
specialty.
We also believe that under sections
1848(k)(2)(B)(ii) through (iii) of the Act,
as amended by the MMSEA, the
Secretary is given broad discretion to
determine which quality measures meet
the statutory requirements and are
appropriate for inclusion in the final set
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Reporting period
of measures for 2009. We do not
interpret sections 1848(k)(2)(B) of the
Act to require that all measures that
meet the basic requirements of section
1848(k)(2)(B)(i) of the Act must be
included in the 2009 set of quality
measures.
We discuss in the following section
the statutory requirements for consensus
organizations and the use of a
consensus-based process for developing
quality measures as they relate to the
requirements for the set of measures for
2009 in the context of other applicable
Federal law and policy. More
information on the measure
development process in general is
available on the CMS Web site at
https://www.cms.hhs.gov/
QualityInitiativesGenInfo. The next
section also discusses the policies used
in proposing the initial set of quality
measures for eligible professionals for
use in 2009 and the policies we are
proposing to apply in publishing the
final set.
b. Consensus Organizations and
Consensus-Based Process for
Developing Measures
Consistent with the principle that
measures used for 2009 be endorsed or
adopted by a consensus organization
and developed through the use of a
consensus-based process, but without
proposing that 2009 PQRI measures be
limited to those meeting the definition
of a voluntary consensus standard under
the National Technology Transfer and
Advancement Act of 1995 (Pub. L. 104–
113) (NTTAA), we interpret ‘‘consensusbased process for developing measures’’
as used in section 1848(k) of the Act and
amended by MMSEA to encompass not
only the basic development work of the
formal measure developer, but also to
include the achievement of consensus
among stakeholders in the health care
system. Consensus should be achieved
based on at least a level of openness,
balance of interest, and consensus
reflected in the structures and processes
of the NQF and AQA as of the date of
enactment of MIEA–TRHCA, MMSEA,
and the date of this proposed rule. More
information on the structures and
processes of the NQF and AQA can be
found on the organizations’ respective
Web sites at https://
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January 1, 2009–December 31, 2009.
www.qualityforum.org and https://
www.ambulatoryqualityalliance.org.
Based on the considerations discussed
in the CY 2008 PFS proposed rule (72
FR 38196 through 38204), we are
proposing to apply the following
policies in identifying measures that
meet the requirements for having used
a consensus-based process for
development and the requirement for
having been endorsed or adopted by a
consensus organization such as the NQF
or AQA, and that are appropriate for
inclusion as 2009 measures:
(1) We continue to interpret ‘‘a
consensus-based development process’’
as meaning that in addition to the
measure development, the measure has
achieved adoption or endorsement by a
consensus organization having at least
the basic characteristics of the AQA as
a consensus organization as of
December 2006, when the MIEA–
TRHCA incorporating reference to AQA
was passed and signed into law. Those
basic characteristics include a
comparable level of openness, balance
of interest, and consensus-based on
voting participation. As discussed above
in this section and further clarified in
points (3) and (5), we do not interpret
‘‘consensus-based development
process’’ per section 1848(k)(2)(B) of the
Act to require that the consensus
organization or process meet all of the
criteria of the NTTAA and Office of
Management and Budget Circular No.
A–119 (OMB A–119) definition of a
voluntary consensus standards body.
(2) ‘‘Voluntary consensus standard’’ is
interpreted to mean a voluntary
consensus standard that has been
endorsed as such by a consensus
organization that meets the
requirements of the NTTAA, as
implemented by OMB A–119, for a
voluntary consensus standards body.
(3) Where there are available quality
measures, and some of these measures
meet the definition of ‘‘voluntary
consensus standards’’ while others do
not, those measures that meet the
definition of ‘‘voluntary consensus
standards’’ are preferred to other
measures not meeting the requirements
of the NTTAA.
(4) In view of the preference for
voluntary consensus standards, if a
measure has been specifically
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considered by NQF for possible
endorsement, but NQF has declined to
endorse it as of August 31, 2008, we are
proposing not to include it in the final
set of 2009 PQRI Quality Measures.
(5) Although the AQA, as organized in
December 2006, does not meet the
requirements of the NTTAA for a
voluntary consensus standards body, it
is a consensus organization per section
1848(k)(2)(B) of the Act. In
circumstances where no voluntary
consensus standard (NQF-endorsed)
measure is available, a quality measure
that has been adopted by the AQA (or
another consensus organization with
comparable consensus-organization
characteristics) would meet the
requirements under the Act and we
propose that it would be appropriate for
eligible professionals to use the measure
to submit quality measures data and/or
quality measures results and numerator
and denominator data on quality
measures, as appropriate.
(6) We are unaware of other
consensus organizations that are
comparable to the NQF in terms of
meeting the formal requirements of the
NTTAA or of organizations other than
AQA that do not strictly meet the
requirements of the National Institute of
Standards and Technology Act (NISTA)
as amended by the NTTAA but that
feature the breadth of stakeholder
involvement in the consensus process
necessary to meet the intent of the Act.
However, the Act does not limit
consensus organizations to the NQF or
the AQA, nor restrict the field of
potential consensus organizations. The
Act, thereby, maintains flexibility in
potential sources of measure consensus
review, which is, like having multiple
sources of measure development, key to
maintaining a robust marketplace for
development and review of quality
measures.
(7) The basic steps for developing
measures applicable to physicians and
other eligible professionals at the
individual level may be carried out by
a variety of different organizations. We
do not interpret section 1848(k)(2)(B) of
the Act to place special restrictions on
the type or make up of the organizations
carrying out this basic development of
physician measures, such as restricting
the initial development to physiciancontrolled organizations. Any such
restriction would unduly limit the basic
development of quality measures and
the scope and utility of measures that
may be considered for endorsement as
voluntary consensus standards.
(8) The policies we are proposing are
based on the preference as articulated in
NTTAA and OMB A–119 for ‘‘voluntary
consensus standards’’ to government
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standards, and a preference for quality
measures that have achieved broad
consensus among stakeholders in the
health care system. However, the Act
does not require that quality measures
meet the NTTAA or OMB A–119
definition of ‘‘voluntary consensus
standards’’ to be used for PQRI.
4. Proposed 2009 PQRI Quality
Measures
The measures identified for use in
PQRI in 2009 will be selected from
those we propose in this rule and will
be finalized as of the date the CY 2009
PFS final rule with comment period
goes on display at the Office of the
Federal Register. No changes (that is,
additions or deletions of measures) will
be made after publication of the CY
2009 PFS final rule with comment
period. However, as was the case for
2008, we may make modifications or
refinements, such as revisions to
measures titles and code additions,
corrections, or revisions to the detailed
specifications for the 2009 measures
until the beginning of the reporting
period. Such specification modifications
may be made through the last day
preceding the beginning of the reporting
period. The 2009 measures
specifications will be available on the
PQRI section of the CMS Web site at
https://www.cms.hhs.gov/pqri when they
are sufficiently developed or finalized.
We are targeting finalization and
publication of the detailed
specifications for all 2009 PQRI
measures on the PQRI section of the
CMS Web site by November 15, 2008,
and will in no event publish these
specifications later than December 31,
2008. The detailed specifications will
include instructions for reporting and
identify the circumstances in which
each measure is applicable.
For 2009, we are proposing that final
PQRI quality measures will be selected
from the 175 measures listed in Tables
11 through 14, which fall into 4 broad
categories as set forth below in this
section. The four categories are the
following:
(1) 2008 PQRI Measures Proposed for
2009;
(2) Additional Proposed NQFendorsed Measures;
(3) Additional Proposed AQAadopted Measures; and
(4) Measures Proposed for 2009
Contingent Upon NQF Endorsement or
AQA Adoption by August 31, 2008.
Given that no legislation currently exists
that authorizes us to make incentive
payments for satisfactorily reporting
data on quality measures on services
furnished in 2009 or beyond, we invite
comments on the advisability of
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expanding the number of PQRI quality
measures beyond the 119 measures in
the 2008 PQRI quality measure set.
In addition, we propose to carry
forward three of the four measures
groups we implemented in 2008. The
measures proposed in eight of the nine
total proposed measures groups are
proposed to be available for reporting as
individual measures or within measures
groups and the measures in the ninth
measures group (Back Pain) are
proposed to be available for use in the
2009 PQRI solely within this proposed
measures group. The measures proposed
for inclusion in each of the proposed
2009 measures groups are listed in
Tables 15 through 23.
a. Considerations for Identifying
Proposed 2009 PQRI Quality Measures
We have applied several
considerations in selecting measures to
propose for the 2009 PQRI. We
considered the following with respect to
selecting the proposed measures for the
2009 PQRI:
(1) Measures that satisfy statutory
criteria for selection. For purposes of
selecting the proposed 2009 PQRI
measures, we considered those
measures that met the requirements of
section 1848(k)(2) of the Act and other
requirements discussed in section
II.O.3.b. of this proposed rule,
‘‘Consensus Organizations and
Consensus-Based Process for
Developing Measures.’’
(2) Measures that are functional,
which is to say measures that can be
technically implemented within the
capacity of the CMS infrastructure for
data collection, analysis, and
calculation of reporting and
performance rates. This leads to
preference for measures that reflect
readiness for implementation, such as
those that are currently in the 2008
PQRI program or have been through
testing. The purpose of measure testing
is to reveal the measure’s strengths and
weaknesses so that the limitations can
be addressed and the measure refined
and strengthened prior to
implementation. For new measures,
preference is given to those which can
be most efficiently implemented for data
collection and submission. For some
measures that are useful, but where data
submission is not feasible through all
otherwise available PQRI reporting
mechanisms, a measure may be
included for reporting solely through
specific reporting mechanism(s) in
which its submission is feasible.
(3) Measures that increase the scope
of applicability of measures to services
rendered to Medicare beneficiaries and
expand opportunities for eligible
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professionals to participate in PQRI (for
example, clinical topics such as skin
care, where there are no 2008 PQRI
measures). We seek to achieve broad
ability to assess the quality of care
furnished to Medicare beneficiaries, and
ultimately to compare performance
among professionals. We seek to
increase the circumstances where
eligible professionals have at least three
measures applicable to their practice
and measures that help expand the
number of measures groups with at least
4 measures in a group.
(4) Measures that support CMS and
HHS priorities for improved quality and
efficiency of care for Medicare
beneficiaries. These current and long
term priority topics include: Prevention;
chronic conditions; high cost and high
volume conditions; elimination of
health disparities; healthcare-associated
infection and other conditions;
improved care coordination; improved
efficiency; improved patient and family
experience of care; improved end-oflife/palliative care; effective
management of acute and chronic
episodes of care; reduced unwarranted
geographic variation in quality and
efficiency; and adoption and use of
interoperable Health Information
Technology (HIT).
(5) Measures that are in, or facilitate,
alignment with other Medicare,
Medicaid, and SCHIP programs in
furtherance of overarching healthcare
goals.
(6) Measures of various aspects of
clinical quality including outcome
measures, where appropriate and
feasible, process measures, structural
measures, efficiency measures and
patient experience of care.
In developing the list of proposed
2009 PQRI quality measures, we also
have reviewed and considered measure
suggestions including comments
received in response to the CY 2008 PFS
proposed rule and final rule with
comment period, and inquiries and
suggestions received through less formal
venues, such as an invitation for
measures suggestions posted on the
CMS Web site in March 2008.
We welcome comments on the
implication of including or excluding
any given measure or measures
proposed herein in the final 2009 PQRI
quality measure set and to our approach
in selecting measures. We recognize that
some commenters may also wish to
recommend additional measures for
inclusion in the 2009 PQRI measures
that we have not herein proposed.
While we welcome all constructive
comments and suggestions, and may
consider such recommended measures
for inclusion in future measure sets for
PQRI and/or other programs to which
such measures may be relevant, we will
not be able to consider such additional
measures for inclusion in the 2009
measure set.
As discussed above, section
1848(k)(2)(B)(ii) of the Act requires that
the measures proposed for use in the
2009 PQRI be published in the Federal
Register not later than August 15, 2008.
We also are required by other applicable
statutes to provide opportunity for
public comment on provisions of policy
or regulation that are established via
notice and comment rulemaking.
Measures that were not included in this
proposed rule for inclusion in the 2009
PQRI that are recommended to CMS via
comments on this proposed rule have
not been placed before the public with
opportunity for the public to comment
on them within the rulemaking process.
Even when measures have been
published in the Federal Register , but
in other contexts and not specifically
proposed as PQRI measures, such
publication does not provide true
opportunity for public comment on
those measures’ potential inclusion in
PQRI. Thus, such additional measures
recommended via comments on this
proposed rule cannot be included in the
2009 measure set. Section
1848(k)(2)(B)(iii) of the Act requires that
the measures be finalized via
publication in the Federal Register not
later than November 15, 2008. However,
38567
as discussed above, we will consider
comments and recommendations for
measures, which may not be applicable
to the final set of 2009 PQRI measures,
for purposes of identifying measures for
possible use in future years’ PQRI or
other initiatives to which those
measures may be pertinent.
b. Proposed Measures Selected From the
2008 PQRI Quality Measures Set
We are proposing to include in the
2009 PQRI quality measure set the 2008
PQRI measures identified in Table 11
contingent on NQF endorsement of each
such included measure by August 31,
2008. All 2008 PQRI measures have
been adopted by the AQA and have
been considered or are currently under
consideration for endorsement by the
NQF. Those 2008 PQRI measures that
have been specifically considered and
declined for endorsement are not
included in the list of proposed
measures for 2009. The six 2008 PQRI
measures not included in the proposed
measures for 2009 for this reason are:
Measure #74, Radiation Therapy
Recommended for Invasive Breast
Cancer Patients who have Undergone
Breast Conserving Surgery; Measure
#75, Prevention of Ventilator-Associated
Pneumonia—Head Elevation; Measure
#80, Plan of Care for ESRD Patients with
Anemia; Measure #103, Review of
Treatment Options in Patients with
Clinically Localized Prostate Cancer;
Measure #129, Universal Influenza
Vaccine Screening and Counseling; and
Measure #133 Screening for Cognitive
Impairment. Also, in some instances,
those 2008 PQRI measures intended or
requested by the measure developer to
be retired from PQRI and replaced by
new AQA-adopted or NQF-endorsed
measures are not included in the list of
proposed measures for 2009. The two
2008 PQRI measures not proposed for
this reason are: Measure #4, Screening
for Future Fall Risk; and Measure #88,
Hepatitis A and B Vaccination in
Patients with HCV.
TABLE 11.—2008 PQRI MEASURES PROPOSED FOR 2009
Measure source
1. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus* ....................................
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Measure number and title
National Committee for Quality Assurance
(NCQA).
NCQA.
NCQA.
American Medical Association-Physician Consortium for Performance Improvement
(AMA–PCPI).
AMA–PCPI.
AMA–PCPI.
2. Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus* ..................
3. Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus* ......................................
5. Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor
Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)*.
6. Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD*
7. Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI)*.
8. Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)* ...........
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AMA–PCPI.
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TABLE 11.—2008 PQRI MEASURES PROPOSED FOR 2009—Continued
Measure number and title
Measure source
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9. Major Depressive Disorder (MDD): Antidepressant Medication During Acute Phase for Patients with MDD.
10. Stroke and Stroke Rehabilitation: Computed Tomography (CT) or Magnetic Resonance Imaging (MRI) Reports.
11. Stroke and Stroke Rehabilitation: Carotid Imaging Reports .....................................................
12. Primary Open Angle Glaucoma (POAG): Optic Nerve Evaluation ...........................................
14. Age-Related Macular Degeneration (AMD): Dilated Macular Examination ..............................
18. Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and Level
of Severity of Retinopathy.
19. Diabetic Retinopathy: Communication with the Physician Managing Ongoing Diabetes Care
20. Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician .............................
21. Perioperative Care: Selection of Prophylactic Antibiotic—First OR Second Generation
Cephalosporin.
22. Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures) ....
23. Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL
Patients).
24. Osteoporosis: Communication With the Physician Managing Ongoing Care Post-Fracture ...
28. Aspirin at Arrival for Acute Myocardial Infarction (AMI) ............................................................
30. Perioperative Care: Timing of Prophylactic Antibiotics—Administering Physician ...................
31. Stroke and Stroke Rehabilitation: Deep Vein Thrombosis Prophylaxis (DVT) for Ischemic
Stroke or Intracranial Hemorrhage.
32. Stroke and Stroke Rehabilitation: Discharged on Antiplatelet Therapy ...................................
33. Stroke and Stroke Rehabilitation: Anticoagulant Therapy Prescribed for Atrial Fibrillation at
Discharge.
34. Stroke and Stroke Rehabilitation: Tissue Plasminogen Activator (t–PA) Considered .............
35. Stroke and Stroke Rehabilitation: Screening for Dysphagia ....................................................
36. Stroke and Stroke Rehabilitation: Consideration of Rehabilitation Services ............................
39. Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older ......................
40. Osteoporosis: Management Following Fracture .......................................................................
41. Osteoporosis: Pharmacologic Therapy .....................................................................................
43. Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Isolated
CABG Surgery.
44. Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in Patients with Isolated
CABG Surgery.
45. Perioperative Care: Discontinuation of Prophylactic Antibiotics (Cardiac Procedures) ...........
46. Medication Reconciliation: Reconciliation After Discharge from an Inpatient Facility ..............
47. Advance Care Plan ...................................................................................................................
48. Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in
Women Aged 65 Years and Older.
49. Urinary Incontinence: Characterization of Urinary Incontinence in Women Aged 65 Years
and Older.
50. Urinary Incontinence: Plan of Care for Urinary Incontinence in Women Aged 65 Years and
Older.
51. Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation ...............................
52. Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy ............................
53. Asthma: Pharmacologic Therapy ..............................................................................................
54. 12–Lead Electrocardiogram (ECG) Performed for Non-Traumatic Chest Pain .......................
55. 12–Lead Electrocardiogram (ECG) Performed for Syncope ....................................................
56. Community-Acquired Pneumonia (CAP): Vital Signs ...............................................................
57. Community-Acquired Pneumonia (CAP): Assessment of Oxygen Saturation .........................
58. Community-Acquired Pneumonia (CAP): Assessment of Mental Status .................................
59. Community-Acquired Pneumonia (CAP): Empiric Antibiotic .....................................................
64. Asthma: Asthma Assessment ...................................................................................................
65. Treatment for Children with Upper Respiratory Infection (URI)—Avoidance of Inappropriate
Use.
66. Appropriate Testing for Children with Pharyngitis ....................................................................
67. Myelodysplastic Syndrome (MDS) and Acute Leukemias: Baseline Cytogenetic Testing Performed on Bone Marrow.
68. Myelodysplastic Syndrome (MDS): Documentation of Iron Stores in Patients Receiving
Erythropoietin Therapy.
69. Multiple Myeloma: Treatment With Bisphosphonates ...............................................................
70. Chronic Lymphocytic Leukemia (CLL): Baseline Flow Cytometry ............................................
71. Breast Cancer: Hormonal Therapy for Stage IC-III estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer.
72. Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients .........................................
73. Cancer: Plan for Chemotherapy Documented ..........................................................................
76. Prevention of Catheter-Related Bloodstream Infections (CRBSI)—Central Venous Catheter
Insertion Protocol.
77. Gastroesophageal Reflux Disease (GERD): Assessment of GERD Symptoms in Patients
Receiving Chronic Medication for GERD.
78. End-Stage Renal Disease (ESRD): Vascular Access for Patients Undergoing Hemodialysis
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NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
The Society of Thoracic Surgeons (STS).
STS.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI.
NCQA.
NCQA.
AMA–PCPI/American Society of Hematology
(ASH).
AMA–PCPI/ASH.
AMA–PCPI/ASH.
AMA–PCPI/ASH.
AMAPCPI/American Society of Clinical Oncology (ASCO)/National Comprehensive Cancer Network (NCCN).
AMA–PCPI/ASCO/NCCN.
AMA–PCPI/ASCO.
AMA–PCPI.
AMA–PCPI/NCQA.
AMA–PCPI.
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38569
TABLE 11.—2008 PQRI MEASURES PROPOSED FOR 2009—Continued
sroberts on PROD1PC70 with PROPOSALS
Measure number and title
Measure source
79. End-Stage Renal Disease (ESRD): Influenza Vaccination in Patients with ESRD ..................
81. End-Stage Renal Disease (ESRD): Plan of Care for Inadequate Hemodialysis in ESRD Patients.
82. End-Stage Renal Disease (ESRD): Plan of Care for Inadequate Peritoneal Dialysis .............
83. Hepatitis C: Testing for Chronic Hepatitis C—Confirmation of Hepatitis C Viremia ................
84. Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment ................................
85. Hepatitis C: HCV Genotype Testing Prior to Therapy ..............................................................
86. Hepatitis C: Consideration for Antiviral Therapy in HCV Patients ............................................
87. Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week 12 of Treatment .........................
89. Hepatitis C: Counseling Regarding Risk of Alcohol Consumption ...........................................
90. Hepatitis C: Counseling of Patients Regarding Use of Contraception Prior to Starting
Antiviral Therapy.
91. Acute Otitis Externa (AOE): Topical Therapy ...........................................................................
92. Acute Otitis Externa (AOE): Pain Assessment .........................................................................
93. Acute Otitis Externa (AOE): Systemic Antimicrobial Therapy—Avoidance of Inappropriate
Use.
94. Otitis Media with Effusion (OME): Diagnostic Evaluation—Assessment of Tympanic Membrane Mobility.
95. Otitis Media with Effusion (OME): Hearing Testing ..................................................................
96. Otitis Media with Effusion (OME): Antihistamines or Decongestants—Avoidance of Inappropriate Use.
97. Otitis Media with Effusion (OME): Systemic Antimicrobials—Avoidance of Inappropriate Use
98. Otitis Media with Effusion (OME): Systemic Corticosteroids—Avoidance of Inappropriate
Use.
99. Breast Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) with Histologic Grade.
100. Colorectal Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN
Category (Regional Lymph Nodes) with Histologic Grade.
101. Prostate Cancer: Appropriate Initial Evaluation ......................................................................
102. Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low-Risk Prostate Cancer Patients.
104. Prostate Cancer: Adjuvant Hormonal Therapy for High-Risk Prostate Cancer Patients .......
105. Prostate Cancer: Three-Dimensional (3D) Radiotherapy .......................................................
106. Major Depressive Disorder (MDD): Diagnostic Evaluation .....................................................
107. Major Depressive Disorder (MDD): Suicide Risk Assessment ...............................................
108. Rheumatoid Arthritis: Disease Modifying Anti-Rheumatic Drug Therapy ...............................
109. Osteoarthritis (OA): Function and Pain Assessment ..............................................................
110. Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old .........
111. Preventive Care and Screening: Pneumonia Vaccination for Patients 65 years and Older ..
112. Preventive Care and Screening: Screening Mammography* .................................................
113. Preventive Care and Screening: Colorectal Cancer Screening* ............................................
114. Preventive Care and Screening: Inquiry Regarding Tobacco Use .........................................
115. Preventive Care and Screening: Advising Smokers to Quit ...................................................
116. Inappropriate Antibiotic Treatment for Adults with Acute Bronchitis—Avoidance of Inappropriate Use.
117. Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient* ......................................................
118. Coronary Artery Disease (CAD): Angiotensin-Converting Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker (ARB) Therapy for Patients with CAD and Diabetes and/or Left
Ventricular Systolic Dysfunction (LSVD)*.
119. Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy
in Diabetic Patients*.
120. Chronic Kidney Disease (CKD): Angiotensin-Converting Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker (ARB) Therapy.
121. Chronic Kidney Disease (CKD): Laboratory Testing (Calcium, Phosphorus, Intact Parathyroid Hormone (iPTH) and Lipid Profile).
122. Chronic Kidney Disease (CKD): Blood Pressure Management .............................................
123. Chronic Kidney Disease (CKD): Plan of Care: Elevated Hemoglobin for Patients Receiving
Erythropoiesis—Stimulating Agents (ESA).
124. Health Information Technology (HIT): Adoption/Use of Electronic Medical Records (EMR)*
125. Health Information Technology (HIT): Adoption/Use of Medication e-Prescribing* ...............
126. Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Neuropathy: Neurological
Evaluation.
127. Diabetes Mellitus: Diabetic Foot and Ankle Care, Ulcer Prevention: Evaluation of Footwear
128. Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up ............
130. Documentation and Verification of Current Medications in the Medical Record ....................
131. Pain Assessment Prior to Initiation of Patient Treatment .......................................................
132. Patient Co-Development of Treatment Plan/Plan of Care ......................................................
134. Screening for Clinical Depression ...........................................................................................
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI/College of American Pathologists
(CAP).
AMA–PCPI/CAP.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
NCQA.
AMA–PCPI.
AMA–PCPI.
NCQA.
NCQA.
NCQA.
AMA–PCPI.
NCQA.
NCQA.
NCQA.
AMA–PCPI.
NCQA.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
Quality Insights of Pennsylvania (QIP)/CMS.
QIP/CMS.
American Podiatric Medical Association APMA.
APMA.
QIP/CMS.
QIP/CMS.
QIP/CMS.
QIP/CMS.
QIP/CMS.
* This measure is one fifteen measures for which data may potentially be accepted through the EHR mechanism in 2009.
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
Please note that detailed measure
specifications for 2008 PQRI measures
may be updated or modified during the
NQF endorsement process or for other
reasons prior to 2009. The 2009 PQRI
measure specifications for any given
measure may, therefore, be different
from specifications for the same
measure used for 2008. Specifications
for all 2009 measures, whether or not
included in the 2008 PQRI program,
must be obtained from the specifications
document for 2009 measures, which
will be available on the PQRI section of
the CMS Web site on or before
December 31, 2008.
c. Additional Proposed NQF-Endorsed
Measures
We propose to include in the 2009
PQRI quality measure set a number of
measures endorsed by the NQF that
were not included in the 2008 PQRI
quality measures, which are identified
in Table 12, provided that the measure
retains NQF endorsement as of August
31, 2008 and its detailed specifications
are completed and ready for
implementation in PQRI by October 15,
2008. Besides having NQF endorsement,
the development of a measure is
considered complete for the purposes of
the 2009 PQRI if by October 15, 2008—
(1) the final, detailed specifications for
use in data collection for PQRI have
been completed and are ready for
implementation, and (2) all of the
Category II Current Procedural
Terminology (CPT II) codes required for
the measure have been established and
will be effective for CMS claims data
submission on or before January 1, 2009.
Measures designated as T### in Table
12 indicate that the measure was
included in the 2008 Measure Testing
Process. For 2008, we implemented a
measures testing process for eleven
measures that had completed consensus
adoption or endorsement but which
were not included in the final measures
for use in satisfying reporting criteria to
earn an incentive under the 2008 PQRI.
These 2008 test measures have
completed measures and specification
development, have, as of the publication
of this proposed rule, been adopted by
the AQA and/or endorsed by the NQF,
and have available CPT II codes that
permit claims-based data submission.
For the 2008 Measure Testing Process,
eligible professionals may report any of
these test measures by submitting the
quality data codes identified, and as
directed, in the test measure
specifications on Part B claims for dates
of services from July 1, 2008 through
September 30, 2008. No financial
incentive is associated with the
reporting of these test measures for
2008.
We plan to analyze the number of
quality data codes submitted for each
specific test measure and engage in
other summary analysis for the
measures. No feedback reports regarding
reporting and performance rates will be
provided to eligible professionals who
report on these test measures in 2008.
Information from the analysis of the
data submitted on the 2008 measure
testing process will be utilized in a
preliminary evaluation of the measures
for data submission. This information
can be used to inform us of a measure’s
readiness for implementation in future
CMS programs.
TABLE 12.—ADDITIONAL PROPOSED NQF-ENDORSED MEASURES
Measure title
Measure source
T142 Osteoarthritis (OA): Assessment for Use of Anti-Inflammatory or Analgesic Over-theCounter (OTC) Medications.
Use of Imaging Studies in Low Back Pain ......................................................................................
Back Pain: Initial Visit ......................................................................................................................
Back Pain: Physical Exam ..............................................................................................................
Back Pain: Advice for Normal Activities ..........................................................................................
Back Pain: Advice Against Bed Rest ..............................................................................................
Foot Exam .......................................................................................................................................
Selection of Antibiotic Administration for Cardiac Surgery Patients ...............................................
Prolonged Intubation .......................................................................................................................
Deep Sternal Wound Infection Rate ...............................................................................................
Stroke/Cerebrovascular Accident ....................................................................................................
Post-operative Renal Insufficiency ..................................................................................................
Surgical Re-exploration ...................................................................................................................
Anti-platelet Medications at Discharge ............................................................................................
Beta Blockade at Discharge ............................................................................................................
Anti-lipid Treatment at Discharge ....................................................................................................
Hemodialysis Vascular Access Decision-making by Surgeons to Maximize Placement of Autogenous Arterial Venous Fistula.
sroberts on PROD1PC70 with PROPOSALS
d. Additional Proposed AQA-Adopted
Measures
As discussed in section II.O.3.b. of
this proposed rule, Consensus
Organizations and Consensus-Based
Process for Developing Measures, in
circumstances where no NQF-endorsed
measure is available, a quality measure
that has been adopted by the AQA
would also meet the requirements of
section 1848(k)(2)(B)(i) of the Act. As
such, we propose to include in the final
2009 PQRI quality measure set measures
adopted by AQA that have not yet been
reviewed or endorsed by the NQF and
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that were not included in the final set
of 2008 PQRI quality measures.
We propose to include in the 2009
PQRI quality measures each of the AQAadopted measures identified in Table
13, provided that, as of August 31, 2008,
the measure retains AQA adoption, has
not been reviewed and declined for
endorsement by NQF, and its detailed
specifications are completed and ready
for implementation in PQRI by October
15, 2008. Besides being adopted by the
AQA, a measure is considered ready for
implementation for the purposes of the
2009 PQRI if by October 15, 2008—(1)
PO 00000
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AMA–PCPI.
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
Society for Vascular Surgeons (SVS).
the final, detailed specifications for use
of the measure in data collection for
PQRI have been completed and are
ready for implementation, and (2) all of
the CPT II codes required for the
measure have been established and will
be effective for CMS claims data
submission on or before January 1, 2009.
As explained above in section II.O.4.c.,
‘‘Additional Proposed NQF-Endorsed
Measures,’’ measures designated as
T### in Table 13 indicate that the
measure is one of eleven measures
included in the 2008 Measure Testing
Process. As also explained above in
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
section II.O.4.c., ‘‘Additional Proposed
NQF-Endorsed Measures,’’ measures in
the table below that are not designated
as T### are not part of the 2008 PQRI
measures testing activity. Such
measures may have CPT II codes
identified or specified, but those codes
may or may not be recognized as active,
38571
valid codes in the Medicare claimsprocessing system.
TABLE 13.—ADDITIONAL PROPOSED AQA-ADOPTED MEASURES
Measure title
Measure source
T135 Chronic Kidney Disease (CKD): Influenza Immunization* .....................................................
T136 Melanoma: Follow-Up Aspects of Care .................................................................................
T137 Melanoma: Continuity of Care—Recall System ....................................................................
T138 Melanoma: Coordination of Care ...........................................................................................
T139 Cataracts: Comprehensive Preoperative Assessment for Cataract Surgery with Intraocular
Lens (IOL) Placement.
T140 Age-Related Macular Degeneration (AMD): Counseling on Antioxidant Supplement ..........
T141 Primary Open-Angle Glaucoma (POAG) : Reduction of Intraocular Pressure (IOP) by
15% OR Documentation of a Plan of Care.
T143 Cancer Care: Medical and Radiation—Plan of Care for Pain ...............................................
T144 Radiology: Computed Tomography (CT) Radiation Dose Reduction ...................................
T145 Radiology: Exposure Time Reported for Procedures Using Fluoroscopy .............................
Cancer Care: Pain Intensity Quantified ...........................................................................................
Radiology: Inappropriate Use of ‘‘Probably Benign’’ Assessment Category in Mammography
Screening.
Coronary Artery Disease (CAD): Lipid Profile in Patients with CAD ..............................................
Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV) Fistula .......................................
Osteoporosis: Counseling for Vitamin D, Calcium Intake, and Exercise ........................................
Falls: Plan of Care ...........................................................................................................................
Falls: Risk Assessment ...................................................................................................................
Cancer Care: Radiation Dose Limits to Normal Tissues ................................................................
Hepatitis C: Hepatitis A Vaccination ...............................................................................................
Hepatitis C: Hepatitis B Vaccination ...............................................................................................
Cancer Care: Recording of Clinical Stage for Lung Cancer and Esophageal Cancer ..................
AMA–PCPI.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
STS.
*This measure is one fifteen measures for which data may potentially be accepted through the EHR mechanism in 2009.
e. Additional Proposed Measures
Contingent Upon NQF Endorsement or
AQA Adoption by August 31, 2008
We are proposing to include in the
2009 PQRI measure set certain measures
that are not yet NQF-endorsed or AQAadopted, provided that the measure will
be so endorsed or adopted as of August
31, 2008, and its detailed specifications
are completed and ready for
implementation in PQRI by October 15,
2008.
The measures we propose to include
in the 2009 PQRI quality measure set are
identified in Table 14. Besides being
NQF-endorsed or AQA-adopted, a
measure is considered ready for
implementation for the purposes of the
2009 PQRI if by October 15, 2008—(1)
the final, detailed specifications for use
of the measure in data collection for
PQRI have been completed and are
ready for implementation, and (2) all of
the CPT II codes required for the
measure have been established and will
be effective for CMS claims based
submission on or before January 1, 2009.
TABLE 14.—MEASURES PROPOSED FOR 2009 CONTINGENT UPON NQF ENDORSEMENT OR AQA ADOPTION BY AUGUST
31, 2008
sroberts on PROD1PC70 with PROPOSALS
Measure title
Measure source
Nuclear Medicine: Correlation with Existing Imaging Studies for all Patients Undergoing Bone
Scintigraphy.
Unhealthy Alcohol Use: Screening & Brief counseling ...................................................................
Lipid Screening ................................................................................................................................
Pediatric ESRD: Adequacy of Hemodialysis ...................................................................................
Pediatric ESRD: Influenza Immunization ........................................................................................
Rheumatoid Arthritis: Tuberculosis Screening ................................................................................
Rheumatoid Arthritis: Appropriate Use of Biologic Disease Modifying Anti-Rheumatic Drugs
(DMARDs).
Rheumatoid Arthritis: Periodic Assessment of Disease Activity .....................................................
Rheumatoid Arthritis: Functional Limitation Assessment ................................................................
Rheumatoid Arthritis: Assessment and Classification of Disease Prognosis .................................
Rheumatoid Arthritis: Glucocorticoid Management .........................................................................
Endoscopy & Polyp Surveillance: Surveillance Colonoscopy Interval in Patients with History of
Adenomatous Polyps.
Chronic Wound Care: Use of Compression System in Patients with Venous Ulcers ....................
Chronic Wound Care: Offloading of Diabetic Foot Ulcers ..............................................................
HIV/AIDS: CD4+ Cell Count or CD4+ Percentage .........................................................................
HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis .................................................
HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS who are Prescribed Potent
Antiretroviral Therapy.
HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy ............................
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AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
TABLE 14.—MEASURES PROPOSED FOR 2009 CONTINGENT UPON NQF ENDORSEMENT OR AQA ADOPTION BY AUGUST
31, 2008—Continued
Measure title
Measure source
Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Arterial Disease—Ankle Brachial
Index.
Participation by Physician or Other Clinician in a Systematic Clinical Database Registry that includes Consensus Endorsed Quality Measures.
Elder Maltreatment Screen and Follow-up Plan .............................................................................
Chiropractic Care .............................................................................................................................
Palliative Care: Dyspnea Screening and Management ..................................................................
Endarterectomy: Peri-operative Anti-platelet Therapy for Patients Undergoing Carotid
Endarterectomy (CEA).
Endarterectomy: Postoperative Stroke or Death in Asymptomatic Patient Undergoing Carotid
Endarterectomy (CEA).
Endarterectomy: Use of Patch During Conventional Endarterectomy ............................................
f. Measures Proposed for Inclusion in
2009 Measures Groups
As discussed previously in this
section, we propose to retain three of
the four 2008 PQRI measures groups for
the 2009 PQRI—(1) Diabetes Mellitus,
(2) CKD, and (3) Preventive Care. We
also are not proposing to retain all of the
measures contained in those groups as
2009 PQRI measures. In some cases, we
may propose different or additional
measures for inclusion in a particular
measures group for use in 2009,
compared to 2008. Therefore, the
composition of the Diabetes Mellitus,
CKD, and Preventive Care measures
groups may be different for the 2009
PQRI than for the 2008 PQRI. The
measures proposed for inclusion in the
2009 Diabetes Mellitus, CKD, and
Preventive Care measures groups are
listed in Tables 15 through 17.
Some measures proposed for
inclusion in a 2009 measures group are
current 2008 PQRI measures. The title of
each such measure is preceded with its
PQRI Measure Number in Tables 15
through 23. The PQRI Measure Number
is a unique identifier assigned by CMS
to all measures in the PQRI measure set.
Once a PQRI Measure Number is
assigned to a measure, it will not be
used again, even if the measure is
subsequently retired from the PQRI
measure set. Measures that are not
APMA
CMS
QIP/CMS.
QIP/CMS.
NCQA
SVS.
SVS
SVS
preceded by a number have never been
part of a PQRI measure set. As with
measures group reporting in the 2008
PQRI, each eligible professional electing
to report a group of measures for 2009
must report all measures in the group
that are applicable to each patient or
encounter to which the measures group
applies at least up to the minimum
number of patients required by
applicable reporting criteria (described
above in section II.O.2.b., Satisfactory
Reporting of Data on Quality Measures
and Reporting Periods for Measures
Groups, Through Claims-Based
Reporting and Registry-Based
Reporting’’).
TABLE 15.—MEASURES PROPOSED FOR 2009 DIABETES MELLITUS MEASURES GROUP
Measure title
Measure source
1. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus .........................................
2. Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus ........................
3. Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus ...........................................
117. Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient ..........................................................
119. Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in
Diabetic Patients.
Foot Exam ..........................................................................................................................................
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
TABLE 16.—MEASURES PROPOSED FOR 2009 CKD MEASURES GROUP
Measure title
Measure source
120. Chronic Kidney Disease (CKD): Angiotensin-Converting Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker (ARB) Therapy.
121. Chronic Kidney Disease (CKD): Laboratory Testing (Calcium, Phosphorus, Intact Parathyroid Hormone (iPTH) and Lipid Profile).
122. Chronic Kidney Disease (CKD): Blood Pressure Management .................................................
123. Chronic Kidney Disease (CKD): Plan of Care: Elevated Hemoglobin for Patients Receiving
Erythropoiesis—Stimulating Agents (ESA).
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
sroberts on PROD1PC70 with PROPOSALS
TABLE 17.—MEASURES PROPOSED FOR 2009 PREVENTIVE CARE MEASURES GROUP
Measure title
Measure source
39. Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older .........................
48. Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women
Aged 65 Years and Older.
110. Preventive Care and Screening: Influenza Immunization for Patients = 50 Years Old ............
111. Preventive Care and Screening: Pneumonia Vaccination for Patients 65 years and Older .....
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TABLE 17.—MEASURES PROPOSED FOR 2009 PREVENTIVE CARE MEASURES GROUP—Continued
Measure title
112.
113.
114.
115.
128.
Preventive
Preventive
Preventive
Preventive
Preventive
Care
Care
Care
Care
Care
and
and
and
and
and
Screening:
Screening:
Screening:
Screening:
Screening:
Measure source
Screening Mammography ......................................................
Colorectal Cancer Screening .................................................
Inquiry Regarding Tobacco Use ............................................
Advising Smokers to Quit ......................................................
Body Mass Index (BMI) Screening and Follow-Up ...............
In addition to these three measures
groups retained from 2008 with
applicable modifications, there are six
new measures groups proposed for the
2009 PQRI: (1) CABG Surgery; (2) CAD;
(3) Rheumatoid Arthritis; (4) HIV/AIDS;
(5) Perioperative Care; and (6) Back
Pain. Each of the proposed measures
groups contains at least four PQRI
measures. Except for the Back Pain
measures group, all measures included
in a measures group can be reported
individually or as part of a group.
Measures in the Back Pain measures
group will be reportable only as a part
of this measures group.
Tables 18 through 23 list the measures
proposed for inclusion in each of these
NCQA.
NCQA.
AMA–PCPI.
NCQA.
QIP/CMS.
new measures groups. The final
composition of measures groups for the
2009 PQRI will be contingent upon the
final measures for the 2009 PQRI and
will be finalized in the CY 2009 PFS
final rule with comment period. We
invite comments on the measures
proposed for inclusion in the measures
groups proposed for 2009.
TABLE 18.—MEASURES PROPOSED FOR 2009 CABG MEASURES GROUP
Measure title
Measure source
43. Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Isolated
CABG Surgery.
44. Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in Patients with Isolated
CABG Surgery.
Selection of Antibiotic Administration for Cardiac Surgery Patients ..................................................
Prolonged Intubation ..........................................................................................................................
Deep Sternal Wound Infection Rate ...................................................................................................
Stroke/Cerebrovascular Accident .......................................................................................................
Post-operative Renal Insufficiency .....................................................................................................
Surgical Re-exploration ......................................................................................................................
Anti-platelet Medications at Discharge ...............................................................................................
Beta Blockade at Discharge ...............................................................................................................
Anti-lipid Treatment at Discharge .......................................................................................................
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
TABLE 19.—MEASURES PROPOSED FOR 2009 CAD MEASURES GROUP
Measure title
Measure source
6. Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD ....
7. Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial
Infarction (MI).
18. Coronary Artery Disease (CAD): Angiotensin-Converting Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker (ARB) Therapy for Patients with CAD and Diabetes and/or Left
Ventricular Systolic Dysfunction (LSVD).
Lipid Screening ...................................................................................................................................
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
TABLE 20.—MEASURES PROPOSED FOR 2009 RHEUMATOID ARTHRITIS MEASURES GROUP
Measure title
Measure source
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108. Rheumatoid Arthritis: Disease Modifying Anti-Rheumatic Drug Therapy ..................................
Rheumatoid Arthritis: Tuberculosis Screening ...................................................................................
Rheumatoid Arthritis: Appropriate Use of Biologic Disease Modifying Anti-Rheumatic Drugs
(DMARDs).
Rheumatoid Arthritis: Periodic Assessment of Disease Activity ........................................................
Rheumatoid Arthritis: Functional Limitation Assessment ...................................................................
Rheumatoid Arthritis: Assessment and Classification of Disease Prognosis ....................................
Rheumatoid Arthritis: Glucocorticoid Management ............................................................................
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
TABLE 21.—MEASURES PROPOSED FOR 2009 HIV/AIDS MEASURES GROUP
Measure title
Measure source
HIV/AIDS: CD4+ Cell Count or CD4+ Percentage ............................................................................
HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis ....................................................
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TABLE 21.—MEASURES PROPOSED FOR 2009 HIV/AIDS MEASURES GROUP—Continued
Measure title
Measure source
HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS who are Prescribed Potent Antiretroviral
Therapy.
HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy ...............................
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
TABLE 22.—MEASURES PROPOSED FOR 2009 PERIOPERATIVE CARE MEASURES GROUP
Measure title
Measure source
20. Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician .................................
21. Perioperative Care: Selection of Prophylactic Antibiotic—First OR Second Generation
Cephalosporin.
22. Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures) .......
23. Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL
Patients).
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
TABLE 23.—MEASURES PROPOSED FOR 2009 BACK PAIN MEASURES GROUP
Measure title
Measure source
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Use of Imaging Studies in Low Back Pain .........................................................................................
Back Pain: Initial Visit .........................................................................................................................
Back Pain: Physical Exam ..................................................................................................................
Back Pain: Advice for Normal Activities .............................................................................................
Back Pain: Advice Against Bed Rest .................................................................................................
g. Quality Measures Reviewed and Not
Proposed for 2009 PQRI
In developing the list of proposed
2009 PQRI quality measures, we have
reviewed both formal and informal
measure suggestions ranging from
comments received in response to the
CY 2008 PFS proposed rule and final
rule with comment period to inquiries
and suggestions received through less
formal venues, including but not limited
to an invitation posted on the CMS Web
site in March 2008 for suggestions of
measures for consideration for potential
inclusion in PQRI. For those quality
measures reviewed but not included in
the list of proposed 2009 PQRI quality
measures, we may consider including
such measures in a 2009 Measure
Testing Process similar to the 2008
Measure Testing Process described
above.
Measures selected for inclusion in the
2009 Measure Testing Process will be
limited to measures that have completed
development, including having
achieved consensus endorsement or
adoption, and for which CPT II codes
are available by January 1, 2009. The
2009 Measure Testing Process is
planned for April 1, 2009 through June
30, 2009. We plan to analyze the
number of quality data codes submitted
for the specific test measures and engage
in other summary analysis for the
measures. No calculations will be made
at the individual or physician level.
As discussed previously, no
legislation exists that authorizes us to
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make incentive payments for
satisfactorily reporting data on quality
measures on services furnished in 2009.
No financial incentive payment will be
associated with the reporting of these
test measures for 2009. Information from
this analysis of the data submitted on
measures identified for the 2009
Measure Testing Process will be utilized
in a preliminary evaluation of the
measures. This information can be used
to inform us of a measure’s readiness for
implementation in future CMS
programs.
5. Summary of Program Considerations
for the PQRI in 2009 and Beyond
In summary, we have invited public
comment on the following areas for the
2009 PQRI through this proposed rule:
• Implications of including or
excluding any given measure from the
set of proposed 2009 quality measures
as listed in Tables 11, 12, 13, and 14.
Suggestions to include measures for the
2009 PQRI other than those we have
proposed for inclusion will not be
considered for 2009. However, any such
suggestions may be considered in future
years for use in PQRI or for other
initiatives to which those measures may
be pertinent.
• The new measures groups proposed
for 2009 including suggestions for other
measures groups based on individual
measures included in the proposed 2009
PQRI measures set.
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• The proposed use of the
consecutive patient reporting criteria for
measures groups.
• The proposed use of 30 consecutive
patients as the required sample under
the consecutive patient reporting
criteria during the full-year 2009
reporting period.
• The proposed options and planned
use of registries for registry-based
quality measures results and numerator
and denominator data on quality
measures data reporting to PQRI in
2009.
• The advisability of expanding the
number of PQRI quality measures
beyond the 119 measures in the 2008
PQRI quality measures set given that
there is no specific authorization for an
incentive payment for the 2009 PQRI
and beyond.
6. Uses of PQRI Information
On August 22, 2006, President Bush
issued an Executive Order, ‘‘Promoting
Quality and Efficient Health Care in
Federal Government Administered or
Sponsored Health Care Programs,’’
which requires the Federal Government,
to the extent permitted by law, to—
• Ensure that Federal health care
programs promote quality and efficient
delivery of health care using
interoperable health information
technology, transparency regarding
health care quality and price, and better
incentives for program beneficiaries,
enrollees, and providers.
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• Make relevant information available
to these beneficiaries, enrollees, and
providers in a readily useable manner
and in collaboration with similar
initiatives in the private sector and nonFederal public sector.
To support this mandate, the
Secretary has embraced ‘‘four
cornerstones’’ for building a valuedriven health care system:
(1) Connecting the health system
through the use of interoperable health
information technology;
(2) Measuring and publishing
information about quality;
(3) Measuring and publishing
information about price; and
(4) Using incentives to promote highquality and cost-effective care (see
https://www.hss.gov/valuedriven).
Building on these four cornerstones,
we have articulated a vision for health
care—the right care, for every person,
every time. To achieve this vision, we
seek to implement policies that will
promote the delivery of care that is safe,
effective, timely, patient-centered,
efficient, and equitable. In working to
achieve this vision, and in support of
the four cornerstones, we have launched
an initiative, of which PQRI is a part,
directed toward measuring the quality
of care for services provided to
Medicare beneficiaries and to make
such information publicly available. We
currently have Web pages at https://
www.medicare.gov for the public
reporting of quality data for hospitals
(Hospital Compare), dialysis facilities
(Dialysis Facility Compare), nursing
homes (Nursing Home Compare) and
home health facilities (Home Health
Compare). On these Web pages, we
make performance results on
standardized quality measures for the
various facilities publicly available.
This information is used by the facilities
for their own quality improvement
purposes, by the public to make
informed healthcare decisions, and, in
some cases, for our payment incentive
programs that are designed to promote
the delivery of high quality services and
to ensure high value for Medicare
beneficiaries. To date, we have not
made information on the quality of care
for services provided by physicians to
Medicare beneficiaries publicly
available. However, we are
contemplating a similar ‘‘Physician
Compare’’ Web site that would enhance
the information found on the Physician
Directory (see https://www.medicare.gov/
Physician/Home.asp?bhcp=1) to include
information about the quality of care
and value for services provided by
professionals to Medicare beneficiaries
in the future. There are a variety of data
sources that could provide quality of
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care, value, and other information for
services provided by professionals to
Medicare beneficiaries that could be
used to develop a Physician Compare
Web site.
With respect to the PQRI, the data on
PQRI quality measures is submitted at
the individual (that is, NPI) level by
physicians and other eligible
professionals. Such data could be the
basis for public reporting of quality
measurement performance results at
either the individual or group (that is,
TIN) level. Our plans with respect to
public reporting of PQRI data have been
a subject of public interest. In response
to public comments received on the
issue of public reporting of PQRI data,
we stated in the CY 2008 PFS final rule
with comment period (72 FR 66337) that
‘‘[w]e do not at this time plan to make
results publicly available in a format or
with content that would enable
identification of individual
professionals or specific practices’
specific reporting or performance
results. We have not made a
determination as to the most
appropriate venue(s) for making PQRI
evaluation information available to the
public.’’
Nevertheless, in 2007, we published a
notice of a new system of records (SOR)
under the Privacy Act entitled,
‘‘Performance Measurement and
Reporting System,’’ System No. 09–70–
0584 (72 FR 52133 through 52140) for
the public release of PQRI data. Under
the SOR we established a routine use
that would enable us to make individual
physician-level performance
measurement results information
available to Medicare beneficiaries, by
posting it on a public Web site and by
various other methods of data
dissemination, which may include
performance information that is
reported by physicians pursuant to
PQRI.
Although not required by the statute
authorizing PQRI we have, from the
beginning, regarded providing
physicians and other eligible
professionals an opportunity to review
their data on reporting rates and
performance rates on PQRI quality
measures as an important aspect of the
program. This derives from the
fundamental interest in quality
improvement that underlies the
program. Thus, we included a
confidential feedback mechanism for
physicians as part of the Physician
Voluntary Reporting Program which
preceded PQRI. We extended and
expanded the confidential feedback
mechanism for the 2007 PQRI. These
feedback reports are scheduled to be
available starting in mid-July 2008 at the
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time the incentive payments for 2007
PQRI are made. The feedback reports
will not only assist eligible
professionals in quality improvement
but will also provide us with an
important source of input for evaluation
of PQRI measures, the performance
calculation methods, and the PQRI
program. For the 2008 PQRI data that is
currently being submitted, we will
continue to provide a confidential
feedback process. For the 2008 PQRI
data, consistent with information that
we have previously provided, we do not
intend to publicly report performance
results at the individual or group level;
but we may publicly report the names
of eligible professionals who report and/
or satisfactorily report quality data
under the 2008 PQRI.
As part of our broader goal to measure
and make the quality of care for services
provided to Medicare beneficiaries
publicly available and in support of the
four cornerstones, we anticipate making
information on the quality of care for
services provided by professionals to
Medicare beneficiaries publicly
available in the future. In future years,
we will also explore using information
collected from the PQRI, including
performance results, for this purpose.
To assist us in determining the most
appropriate uses of PQRI data, we invite
comments on the following issues:
• Ways to effectively engage eligible
professionals, consumers, and other
stakeholders in the development and
evaluation of a valid and reliable public
reporting system related to professional
services provided to Medicare
beneficiaries.
• The venue and format for how PQRI
information should be made publicly
available.
• Types of data that would be most
useful and meaningful to consumers (for
example, reporting results and/or
performance results).
• Types of data that would be most
useful and meaningful for professionals.
• Level at which PQRI information
should be publicly reported (that is, at
the individual professional, or NPI,
level or the group, or TIN, level).
• Types of PQRI measures and/or
measures groups that would be most
useful and meaningful to consumers.
• Types of PQRI measures and/or
measures groups that would be most
useful and meaningful to professionals.
• Review of the data to be publicly
reported by eligible professionals.
P. Discussion of Chiropractic Services
Demonstration
[If you choose to comment on issues in
this section, please include the caption
‘‘CHIROPRACTIC SERVICES
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DEMONSTRATION’’ at the beginning of
your comments.]
In the CY 2006, CY 2007, and CY
2008 PFS final rules with comment
period (70 FR 70266, 71 FR 69707, 72
FR 66325, respectively), we included a
discussion of the 2-year chiropractic
services demonstration that ended on
March 31, 2007. This demonstration
was required by section 651 of the MMA
to evaluate the feasibility and
advisability of covering chiropractic
services under Medicare. These services
extended beyond the current coverage
for manipulation to care for
neuromusculoskeletal conditions
typical among eligible beneficiaries, and
covered diagnostic and other services
that a chiropractor was legally
authorized to perform by the State or
jurisdiction in which the treatment was
provided. The demonstration was
conducted in four sites, two rural and
two urban. The demonstration was
required to be budget neutral as the
statute requires the Secretary to ensure
that the aggregate payment made under
the Medicare program does not exceed
the amount which would be paid in the
absence of the demonstration.
Ensuring budget neutrality requires
that the Secretary develop a strategy for
recouping funds should the
demonstration result in costs higher
than those that would occur in the
absence of the demonstration. As we
stated in the CY 2006 and CY 2007 PFS
final rules with comment period, we
would make adjustments to the
chiropractor fees under the Medicare
PFS to recover aggregate payments
under the demonstration in excess of
the amount estimated to yield budget
neutrality. We will assess budget
neutrality by determining the change in
costs based on a pre- and postcomparison of aggregate payments and
the rate of change for specific diagnoses
that were treated by chiropractors and
physicians in the demonstration sites
and control sites. Because the aggregate
payments under the expanded
chiropractor services may have an
impact on other Medicare expenditures,
we will not limit our analysis to
reviewing only chiropractor claims.
Any needed reduction to chiropractor
fees under the PFS would be made in
the CY 2010 and CY 2011 physician fee
schedules as it will take approximately
2 years after the demonstration ends to
complete the claims analysis. If we
determine that the adjustment for BN is
greater than 2 percent of spending for
the chiropractor fee schedule codes
(comprised of the 3 currently covered
CPT codes 98940, 98941, and 98942),
we would implement the adjustment
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over a 2-year period. However, if the
adjustment is less than 2 percent of
spending under the chiropractor fee
schedule codes, we would implement
the adjustment over a 1-year period. We
intend to provide a detailed analysis of
budget neutrality and the proposed
offset during the CY 2010 PFS
rulemaking process.
Q. Educational Requirements for Nurse
Practitioners and Clinical Nurse
Specialists
[If you choose to comment on issues in
this section, please include the caption
‘‘EDUCATIONAL REQUIREMENTS
FOR NURSE PRACTITIONERS AND
CLINICAL NURSE SPECIALISTS’’ at the
beginning of your comments.]
We are proposing a technical
correction to the nurse practitioner (NP)
qualifications at § 410.75(b) to require
that, in order for NP services furnished
by an individual to be covered by
Medicare, a NP who obtains Medicare
billing privileges as a NP for the first
time ever on or after January 1, 2003,
must be a registered professional nurse
who is authorized by State law to
practice as a NP, must be nationally
certified as a NP, and must have a
master’s degree in nursing. The current
NP qualification standards under these
Federal regulations include progressive
requirements, but not entirely date
specific. The absence of a date
specification for each of the
qualification standards could allow
nurses who have never been enrolled
under Medicare and obtained Medicare
billing privileges as a NP an opportunity
to enroll as a NP after January 1, 2003
without a master’s degree in nursing.
Such an enrollment would be contrary
to our policy, as explained further
below.
We discussed the NP qualifications
and our intent to move progressively
toward requiring a master’s degree in
nursing as the standard for all new NPs
enrolling and participating under the
Medicare Part B benefit for NPs in our
July 22, 1999 proposed rule (64 FR
39625) and the subsequent final rule (64
FR 59411). We stated under this final
rule that, ‘‘the requirement that a NP
applying for a Medicare billing number
for the first time must have a master’s
degree in nursing as of January 1, 2003,
will provide NPs without a master’s
degree with enough time to earn such a
degree. We believe it is reasonable to
require ultimately, a master’s degree as
the minimum educational level for new
practitioners independently treating
beneficiaries and directly billing the
Medicare program.’’
We are also proposing to amend the
requirement in our regulations at
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§ 410.75(b)(4) that NPs must have a
master’s degree in nursing in order to
also recognize a Doctor of Nursing
Practice (DNP) doctoral degree (which
can be obtained without a master’s
degree in nursing). In addition, we are
proposing to amend a similar
qualification standard for clinical nurse
specialists (CNSs) at § 410.76(b)(2) that
requires advanced practice nurses
(APNs) to have a master’s degree in a
defined clinical area of nursing from an
accredited educational institution in
order to allow CNSs, alternatively, to
meet these requirements with a DNP
doctoral degree.
We are aware that some educational
institutions are offering programs to
prospective NPs and CNSs that allow
students who complete these nursing
education programs to move from a
baccalaureate degree in nursing directly
to the doctoral degree in nursing where
they earn a terminal clinical doctoral
degree titled the DNP. Therefore, some
APNs who earn the DNP degree do not
receive a master’s degree in nursing
even though they will have met all of
the educational requirements for a
master’s degree in nursing, in addition
to the preparation that merits them the
DNP degree. We note that an April 2,
2008 article in the Wall Street Journal
stated that by the year 2015, the
American Association of Colleges of
Nursing aims to make the doctoral
degree the standard for all new APNs.
We believe that it is logical for Medicare
Part B to recognize APNs with more
extensive education and training.
Therefore, we propose to permit
qualified APNs with the DNP degree to
enroll and receive Medicare Part B
payment as NPs and CNSs.
R. Portable X-Ray Issue
[If you choose to comment on issues in
this section, please include the caption
‘‘PORTABLE X-RAY ISSUE’’ at the
beginning of your comments.]
The Conditions for Coverage (CfC) for
Portable X-Ray services are authorized
by section 1861(s)(3) of the Act and
were adopted January 1969. These
requirements have, for the most part,
been subjected to minimal modification
over the years.
The current requirements in our
regulations at § 486.104 (Qualifications,
orientation, and health of technical
personnel) are inconsistent with
existing professional standards of
practice and training requirements.
Specifically, the current qualification
requirements for x-ray personnel in
§ 486.104(a)(1), (a)(2), and (a)(3) rely on
credentialing activities from the Council
on Education of the American Medical
Association (CEAMA) and the American
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Osteopathic Association (AOA) which
no longer approve formal training
programs for x-ray technology and have
not done so since 1992.
Beginning in 1976, the Joint Review
Committee on Education in Radiologic
Technology (JRCERT) worked in
collaboration with the Committee on
Allied Health Education and
Accreditation (CAHEA) of the American
Medical Association (AMA) to accredit
programs. However, the CAHEA was
dissolved by the AMA in 1992 and
JRCERT subsequently sought approval
from the United States Department of
Education (USDE) to approve and
accredit x-ray technology programs.
Approval was granted to JRCERT by the
USDE in 1992. JRCERT is now the only
accrediting entity that approves these
programs; however, JCERT is not a
recognized accrediting body under the
current regulation at § 486.104.
Before an x-ray technology program
can be approved by JRCERT, the
American Society of Radiologic
Technologists (ASRT) must approve the
program’s curriculum. Prior to 1992, the
curriculum for x-ray technology
programs was based on 24 months,
which is reflected in the current
regulations at § 486.104. ASRT no
longer bases its evaluation on program
duration, but rather on program
requirements. Thus, a program could be
less than 24 months in duration and still
be eligible for JRCERT approval and
accreditation if its curriculum was
ASRT approved. Because § 486.104(a)(1)
reflects the outdated 24-month standard,
some x-ray technicians who actually
meet community standards for
education and training do not meet
Medicare standards as they stand.
Since the current Medicare
requirements in § 486.104(a)(1) are
outdated, referring organizations that no
longer perform the stated function and
requiring a specific duration of training
that is no longer the community
standard, we are proposing to revise the
regulation to reflect the current
requirements. References to schools
approved by the CEAMA or the AOA
will be deleted, and approval by
JRCERT will be added. In addition, we
propose that the requirement for formal
training of not less than 24 months in
duration be deleted, since this criterion
is not part of the criteria established by
entities that evaluate and approve x-ray
technology programs since 1993.
We propose to retain the 24 month
criterion in § 486.104(a)(2) and (a)(3)
(affecting persons obtaining training
prior to July 1, 1966) as program
duration was one determinant of
program quality at that time. To address
those who completed their training after
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July 1, 1966 but before January 1, 1993,
the time period during which CEAMA
and the AOA were approving training
programs, we propose the addition of a
new paragraph § 486.104(a)(4) to this
section. This addition will reflect the
standards for credentialing activities
during this time frame.
S. Expiring Provisions and Related
Discussions
[If you choose to comment on issues in
this section, please include the caption
‘‘EXPIRING PROVISIONS’’ at the
beginning of your comments.]
1. Physician Fee Schedule Update
As discussed in the CY 2008 PFS final
rule with comment period, the update
formula for payment for services under
the PFS resulted in a reduction of 10.1
percent in the conversion factor (CF) for
CY 2008. Section 101 of the MMSEA
provides for a 0.5 percent increase in
the CF for the period beginning on
January 1, 2008 and ending on June 30,
2008, resulting in a CF of $38.0870. For
the remaining portion of 2008 (July 1
through December 31, 2008), under
current law the CF will reflect the
¥10.1 percent update, and the CF will
be $34.0682, as published in the CY
2008 PFS final rule with comment
period (72 FR 66222). This represents a
10.6 percent reduction from the
payments in the first half of 2008.
Section 101 of the MMSEA also
modifies the Physician Quality
Reporting System for CY 2008 and 2009.
2. Medicare Incentive Payment for
Physician Scarcity Areas
Section 1833(u) of the Act provides
for a 5 percent incentive payment to
physicians furnishing services in
physician scarcity areas (PSAs) for
physicians’ services furnished on or
after January 1, 2005, and before January
1, 2008. In the CY 2008 PFS final rule
with comment period (72 FR 66293), we
provided notification that these
incentive payments authorized by
section 1833(u) of the Act would no
longer be made for services furnished on
or after January 1, 2008. Section 102 of
the MMSEA provides for an extension
of these bonus payments through June
30, 2008. During this 6-month extension
period, the MMSEA required that we
use the primary care scarcity counties
and specialty care scarcity counties that
we were using for purposed of these
incentive payments on December 31,
2007.
Because under current law the
provisions of section 1833(u) of the Act
do not apply to services furnished after
June 30, 2008, we are providing notice
that these 5 percent incentive payments
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will no longer be made for services
furnished on or after July 1, 2008.
3. Extension of Floor for Work GPCI
As discussed in the CY 2008 PFS final
rule with comment period (72 FR
66243), section 102 of the MIEA–
TRHCA requires application of a 1.000
floor on the work GPCI in fee schedule
areas where the work GPCI is less than
1.000. This provision concerning the
work GPCI was set to expire on
December 31, 2007. Section 103 of the
MMSEA provides for an extension of
this 1.000 floor on the work GPCI
through June 30, 2008. Under current
law, the 1.000 floor on the work GPCI
will no longer be used to calculate
payment for services furnished on after
July 1, 2008.
4. Extension of Treatment of Certain
Physician Pathology Services Under
Medicare
The technical component (TC) of
physician pathology services refers to
the preparation of the slide involving
tissue or cells that a pathologist will
interpret. In contrast, the pathologist’s
interpretation of the slide is the
professional component (PC) service. If
the PC service is furnished by the
hospital pathologist for a hospital
patient, it is separately billable. If the
independent laboratory’s pathologist
furnishes the PC service, it is usually
billed with the TC service as a
combined service.
Section 542 of the Medicare,
Medicaid, and SCHIP Benefits
Improvement and Protection Act of
2000 (Pub. L. 106–554) (BIPA)
established the billing exception that
allowed certain qualified independent
laboratories to continue to bill the
carrier under the PFS for the TC of
physician pathology services furnished
to a hospital patient. In order to bill in
this manner, an independent laboratory
must have had an arrangement with a
hospital in effect as of July 22, 1999
under which the laboratory furnished
the TC physician pathology service to a
hospital patient and submitted claims to
the carrier for payment. Through
subsequent legislation (that is, section
732 of the MMA and section 104 of the
MIEA–TRHCA), this provision had been
extended through 2007. If the
independent laboratory did not qualify
under this provision, then it must
continue to bill the hospital and receive
payment from that hospital. As a result
of this provision, the TC of physician
pathology services could be reimbursed
differently depending on the status of
the laboratory.
In the CY 2008 PFS final rule with
comment period (72 FR 66355),
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consistent with section 104 of the
MIEA–TRHCA, we amended
§ 415.130(d) to reflect that for services
furnished after December 31, 2007, an
independent laboratory may not bill the
carrier for the technical component of
physician pathology services furnished
to a hospital inpatient or outpatient.
Section 104 of the MMSEA allows
independent laboratories to continue to
bill the carrier for the TC of physician
pathology services for hospital
inpatients or outpatients through June
30, 2008. We are amending § 415.130(d)
to reflect this change.
5. Therapy Cap and Extension of
Exceptions Process
Section 1833(g)(1) of the Act applies
an annual per beneficiary combined cap
beginning January 1, 1999, on outpatient
physical therapy and speech-language
pathology services, and a similar
separate cap on outpatient occupational
therapy services. These caps apply to
expenses incurred for the respective
therapy services under Medicare Part B,
with the exception of therapy services
furnished as outpatient hospital
services.
As discussed in the CY 2008 PFS final
rule with comment period (72 FR
66356), an exceptions process for the
therapy caps, which was authorized by
section 5107 of the DRA, was extended
through December 31, 2007 by section
201 of the MIEA–TRHCA. Section 105
of the MMSEA provides for a further
extension of this exceptions process
through the first 6 months of CY 2008
(that is, on or before June 30, 2008).
In accordance with the statute, we
will continue to implement therapy
caps, but the exceptions process will no
longer be applicable, for services
furnished beginning on July 1, 2008.
The dollar amount of the therapy caps
in CY 2009 will be the CY 2008 rate
($1,810) increased by the percentage
increase in the MEI as required by
section 1833(g)(2) of the Act.
6. Bonus Payment for Long
Ambulance Transports
Section 414 of the MMA added
section 1834(l)(11) of the Act which
requires that, ‘‘[i]n the case of ground
ambulance services furnished on or after
July 1, 2004, and before January 1, 2009,
regardless of where the transportation
originates, the fee schedule established
under this subsection shall provide that,
with respect to the payment rate for
mileage for a trip above 50 miles the per
mile rate otherwise established shall be
increased by 1⁄4 of the payment per mile
otherwise applicable to miles in excess
of 50 miles in such trip.’’ Section
1834(l)(11) of the Act was implemented
in § 414.610(c)(7), which states that for
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services furnished during the period
July 1, 2004 through December 31, 2008,
each loaded ambulance mile greater
than 50 miles (that is, 51 miles and
greater) for ambulance transports
originating in either urban areas or in
rural areas is paid at a rate that is 25
percent higher than otherwise would be
applicable under § 414.610.
Because the provisions of section
1834(l)(11) of the Act do not apply to
services furnished on or after January 1,
2009, we are providing a reminder that
the 25 percent bonus payments
provided under section 1834(l)(11) of
the Act, and under § 414.610(c)(7), will
no longer be paid for services furnished
on or after January 1, 2009.
7. Clinical Laboratory Fee Schedule
(CLFS) Update Factor
Outpatient clinical laboratory services
are paid under the clinical laboratory
fee schedule (CLFS) in accordance with
section 1833(h) of the Act. Under
section 1833 (a)(1)(D) of the Act,
payment is the lesser of the following:
The amount billed; the local fee for a
geographic area; or a national limit. In
accordance with the statute, the national
limits are set at a percent of the median
for all local fee schedule amounts for
each laboratory test code. While section
1833(h)(2)(A)(i) of the Act specifies that
the fees are to be updated for inflation
based on the Consumer Price Index for
All Urban Consumers (CPI–U), the
Congress modified the update to zero
percent for CY 2004 through CY 2008.
Beginning January 1, 2009, this freeze
expires. As a result, for CY 2009, the
CLFS will be updated by the percentage
increase in the CPI–U using the 12month period ending with June of the
previous year.
At this time, the CPI–U for the 12month period ending June 30, 2008 is
not available. We do not undertake
notice and comment rulemaking to
announce the CLFS update factor
because the statute specifies the
methods of computation of annual
inflation updates, and we have no
discretion in that matter. Thus, we
merely apply the update methods
specified in the statute. We will
announce the CLFS update factor via
CMS instructions by including a section
in our annual CLFS Change Request
instruction and by including the
information on the CMS Clinical
Laboratory Fee Schedule Web site in
approximately November of each year
so that the industry can remain aware of
future CLFS update factors.
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T. Other Issues
1. Physician Certification (G0180) and
Recertification (G0179) for MedicareCovered Home Health Services Under a
Home Health Plan of Care (POC) in the
Home Health Prospective Payment
System (HH PPS)
[If you choose to comment on issues in
this section, please include the caption
‘‘OTHER ISSUES—PHYSICIAN
CERTIFICATION/RECERTIFICATION’’
at the beginning of your comments.]
a. Background
Under the home health benefit, the
statute requires that the physician
review the plan of care (POC) for the
home health eligible beneficiary.
Sections 1814(a)(2)(C) and 1835(a)(2)(A)
of the Act require that a plan for
furnishing home health services to such
individuals has been established and
that plan is periodically reviewed by a
physician for Medicare payment to be
made. Section 409.43(e) more
specifically states that a home health
POC must be reviewed, signed, and
dated by the physician who reviews the
POC (as specified in § 409.42(b)) in
consultation with agency clinical staff at
least every 60 days (or more frequently
as specified in § 409.43(e)(i) through
(iii)). Additionally, § 424.22(b) states
that a recertification is required at least
every 60 days, preferably at the time the
plan is reviewed, and must be signed by
the physician who reviews the home
health POC. These schedules, for the
review of the POC and the
recertification, coordinate well with the
60-day episode payment unit under the
home health prospective payment
system (HH PPS). In implementing the
statutory requirement as well as these
regulations, we believed that these
requirements would encourage
enhanced physician involvement in the
home health POC and patient
management, and would include more
direct ‘‘in-person’’ patient encounters
(as logistically feasible).
Currently, physicians are paid for
both the certification and recertification
of the home health POC under HCPCS
codes G0180 and G0179, respectively.
The basis for the payment amounts of
these physicians’ services is the relative
resources in RVUs required to furnish
these services. We believe physician
involvement is key to maintaining
quality of care under the HH PPS and
payment for the required physician
certification and recertification of home
health POCs reflects this.
In the HH PPS proposed rule
published in the October 28, 1999
Federal Register (64 FR 58196), we had
also proposed to require the physician
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to certify the appropriate case-mix
weight/home health resource group
(HHRG) as part of the required
physician certification of the plan of
care. This reflected our belief that the
physician should be more involved in
the decentralized delivery of home
health services. However, in the final
rule published in the July 3, 2000
Federal Register (65 FR 41163), we did
not finalize that proposal and decided to
focus our attention on physician
certification and education in order to
better involve the physician in the
delivery of home health services.
b. Solicitation of Comments
It has come to our attention that there
exists a vast array of differing levels of
physician involvement in the
certification and recertification of home
health POCs. Although some physicians
do have direct contact with their
patients in the delivery of these
services, we believe a significant
number of physicians provide only a
brief, albeit thorough, review of the
home health POC, without any direct
contact with the patient. Still, other
physicians are involved to an even
lesser degree in their review of the home
health POC and/or direct contact with
the patient in the delivery of these
services. We continue to believe that the
active involvement of the physician
including ‘‘in-person’’ contact with the
patient in the certification,
recertification, and review of the home
health POC is essential for delivery of
high quality home health services to
Medicare beneficiaries.
To that end, we are exploring a couple
of different options. First, we are
considering a review of the RVUs
associated with the certification (G0180)
and recertification (G0179) of the home
health POC. As a result of that review,
the payment amounts to physicians
could be reduced based on a more
accurate determination of the actual
RVUs required to provide these services.
Because we continue to believe that the
active involvement of the physician is
important in delivering these home
health services, reducing the payment
for these services may not encourage
physicians to spend additional time
reviewing and modifying beneficiaries’
home health plans of care to assure that
the plan addresses all of the
beneficiaries’ needs. We are also
considering proposing new
requirements to ensure more active
physician involvement in the
certification and recertification of the
home health patient’s POC, for example,
a requirement for ‘‘direct’’ patient
contact with the physician. We are
specifically soliciting comments on
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these policy options in an effort to
gather more information on this issue,
and any other possible underlying
issues that may exist.
2. Prohibition Concerning Providers of
Sleep Tests
[If you choose to comment on issues
in this section, please include the
caption ‘‘OTHER ISSUES-SLEEP
TESTS’’ at the beginning of your
comments.]
a. Background
Obstructive Sleep Apnea Hypopnea
Syndrome, also known as Obstructive
Sleep Apnea (OSA), is the most
common of the three different forms of
sleep apnea (obstructive, central, or
mixed). OSA is associated with
significant morbidity and mortality,
including excessive daytime sleepiness,
concentration difficulty, cardiovascular
disease, and stroke. Untreated OSA is
associated with a ten-fold increase in
the risk of motor vehicle accidents.
Diagnostic tests for OSA are based on
detection of abnormal sleep patterns
using sleep test devices that record a
variety of cardiorespiratory and
neurophysiologic signals during sleep
time called polysomnography (PSG).
Historically, such sleep tests have been
furnished in a sleep laboratory attended
by a sleep technologist. More recently,
portable sleep test devices have been
developed for the diagnosis of OSA in
the home (either attended or
unattended). Sleep test devices are
classified into four types based
primarily on the extent of sleep pattern
data recorded. The most comprehensive
is designated Type I: attended in-facility
PSG. The remaining three types concern
portable sleep test devices developed for
the diagnosis of OSA and used both in
attended and unattended settings, often
in the home. Type II devices have a
minimum of 7 monitored channels; for
example, electroencephalogram (EEG),
electro-oculogram (EOG),
electromyogram (EMG),
electrocardiogram (EKG)-heart rate,
airflow, respiratory effort, and oxygen
saturation. Type III devices have a
minimum of 4 monitored channels
including ventilation or airflow, at least
two channels of respiratory movement
or respiratory movement and airflow,
heart rate or EKG, and oxygen
saturation. Type IV devices do not meet
the technical criteria defining the other
types, and many measure only one or
two parameters, for example, oxygen
saturation or airflow, but some Type IV
devices measure three or more
parameters. There are other technologies
that do not readily fall into the
classification above.
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Sleep testing, like other diagnostic
tests, is subject to the provisions in
§ 410.32. Thus, it must be ordered by
the physician who is treating the
beneficiary for a specific medical
problem and who uses the results in the
management of the beneficiary’s specific
medical problem. Sleep testing must be
furnished under the required level of
supervision by a physician. If the sleep
testing is furnished by an independent
diagnostic testing facility (IDTF) the
provisions of § 410.33 also apply.
A number of treatment approaches
have been recommended for persons
diagnosed with OSA, depending on
severity of the disorder and other
clinical factors. Patients with moderate
to severe OSA are usually treated at first
with continuous positive air pressure
(CPAP) devices. The regular use of a
CPAP device in these cases has been
shown to improve excessive sleepiness,
cognitive performance, and quality of
life.
A CPAP device is an item of durable
medical equipment (DME) used in the
home that typically uses air pressure to
maintain an open airway and improve
airflow to the lungs.
Medicare currently provides national
coverage of CPAP only for beneficiaries
whose diagnosis of OSA meets the
criteria described in the national
coverage determination at 240.4 of the
National Coverage Determinations
(NCD) Manual. We recently published a
revised NCD that expands coverage of
CPAP devices to beneficiaries when
OSA has been diagnosed by specified
home sleep testing. Prior Medicare
policy had covered CPAP devices only
for beneficiaries whose OSA had been
diagnosed by facility-based attended
PSG. During the process leading to the
revised policy, we received many public
comments expressing concern that
financial incentives would lead to
abusive practices that would harm
Medicare beneficiaries and threaten the
integrity of the Medicare program.
These concerns were expressed not only
with respect to home sleep tests, but
also those performed in sleep
laboratories and other facilities.
Therefore, we are proposing to
implement a provision that would limit
potential abusive practices by removing
a significant financial incentive for
those practices.
b. Regulatory proposal
Based on public comment and prior
agency experience, we believe that the
interests of beneficiaries and the
Medicare program can be harmed if the
provider of a diagnostic test has a vested
interest in the outcome of the test itself.
In the specific context of this proposed
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rule, we believe that the individual or
entity that directly or indirectly
administers the sleep test and/or
provides the sleep test device used to
administer the sleep test (referred to
hereinafter as the ‘provider of the sleep
test’) has a self-interest in the result of
that test if that provider, or its affiliate,
is also the supplier of the CPAP device.’’
This provides incentive to test more
frequently or less frequently than is
medically necessary and to interpret a
test result with a bias that favors selfinterest.
Current medical evidence
persuasively demonstrates that
treatment with a CPAP device is safe for
patients who have OSA. Similar
evidence is lacking for treatment with a
CPAP device of persons who do not in
fact have obstructive sleep apnea. A test
interpreted with bias or reported falsely
may mislead the beneficiary’s treating
physician and divert the beneficiary
from medically appropriate treatment.
Moreover, supplying a medically
unnecessary CPAP device is a waste of
Medicare trust funds.
Based on section 1871(a)(1) of the Act,
which provides the Secretary with the
authority to ‘‘prescribe such regulations
as may be necessary to carry out the
administration of the insurance
programs under this title,’’ and due to
our concerns with respect to the
potential for unnecessary utilization of
sleep tests, we are proposing to prohibit
payment to the supplier of the CPAP
device when such supplier, or its
affiliate, is directly or indirectly the
provider of the sleep test that is used to
diagnose a Medicare beneficiary with
OSA.
As alternatives we had considered
requiring pre-authorization for sleep
tests or modifying payments for the
services when they are furnished by the
same entity but believe these options
would either generate undue burden on
both the Medicare beneficiary and the
claims processing systems or be
administratively burdensome.
Therefore, we are proposing to revise
the durable medical equipment,
prosthetics, orthotics, and supplies
(DMEPOS) supplier enrollment
safeguards set forth at § 424.57 to
protect the Medicare program and its
beneficiaries from fraudulent or abusive
practices that may be related to CPAP
devices. We are proposing to add new
definitions to paragraph (a) to define
‘‘sleep test’’ and ‘‘CPAP device’’ and to
add a new paragraph (f), which would
establish a specific payment prohibition
that would not allow the supplier to
receive Medicare payment for a CPAP
device if that supplier, or its affiliate, is
directly or indirectly the provider of the
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sleep test used to diagnose a beneficiary
with OSA.
3. Beneficiary Signature for
Nonemergency Ambulance Transport
Services
[If you choose to comment on issues
in this section, please include the
caption ‘‘OTHER ISSUES–
BENEFICIARY SIGNATURE’’ at the
beginning of your comments.]
In the CY 2008 PFS final rule with
comment period, we created an
additional exception to the beneficiary
signature requirements, in
§ 424.36(b)(6), for emergency ambulance
transports (72 FR 66406). The exception
allows ambulance providers and
suppliers to sign on behalf of the
beneficiary, at the time of transport,
provided that certain documentation
requirements are met. To take advantage
of the new exception, an ambulance
provider or supplier must maintain in
its files: (1) A contemporaneous
statement, signed by an ambulance
employee who is present during the
trip, that the beneficiary was mentally
or physically incapable of signing (and
that no other authorized person was
available or willing to sign); (2)
documentation as to the date, time and
place of transport; and (3) either a
signed contemporaneous statement from
the receiving facility that documents the
name of the beneficiary and the date
and time the beneficiary was received
by that facility, or a secondary form of
verification from the facility that is
received at a later date.
In the CY 2008 PFS final rule with
comment period, we clarified that, apart
from the new exception in
§ 424.36(b)(6), where a beneficiary is
unable to sign a claim at the time the
service is rendered, ambulance
providers and suppliers are required to
use reasonable efforts to follow-up with
the beneficiary and obtain his or her
signature before submitting the claim
with a signature from one of the
individuals or entities specified in
§ 424.36(b)(1) through (b)(5) (72 FR
66324). We further clarified that only
providers of services, and not
ambulance suppliers, can take
advantage of § 424.36(b)(5), which states
that a representative of the provider or
of the nonparticipating hospital may
sign on behalf of the beneficiary if the
provider or nonparticipating hospital
was unable to have a claim signed in
accordance with § 424.36(b)(1) through
(b)(4) (72 FR 66322).
Subsequent to publication of the CY
2008 PFS final rule with comment
period, ambulance provider and
supplier stakeholders requested that we
extend the exception in § 424.36(b)(6) to
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nonemergency ambulance transports in
instances where the beneficiary is
physically or mentally incapable of
signing. These stakeholders stated that
there are many nonemergency
transports for which a beneficiary is
physically or mentally incapable of
signing a claim form. For example,
stakeholders asserted that beneficiaries
residing in long term care facilities often
need to be transported for
nonemergency medical treatment, yet
may be incapable of signing the claim
due to physical or mental ailments, such
as Alzheimer’s disease or other forms of
dementia. In these instances, there may
be no other individual who is
immediately available and authorized to
sign the claim as specified in
§ 424.36(b).
Because we anticipate that there
would be little or no increased risk of
fraud or program abuse in extending the
exception in § 424.36(b)(6) to include
nonemergency transports, we are
proposing to do so through a revision of
the language in § 424.36(b)(6) to refer
specifically to nonemergency transports.
We are also proposing to add language
to § 424.36(a) to clarify that, apart from
the use of the exception in
§ 424.36(b)(6), providers and suppliers
must make reasonable efforts to obtain
the beneficiary’s signature before relying
on one of the exceptions in § 424.36(b).
We note that § 424.36(b)(5) specifies that
a provider may not invoke the exception
to sign a claim on behalf of a beneficiary
unless it is unable to have one of the
persons specified in § 424.36(b)(1)
through (b)(4) sign the claim. Finally,
given that most claims are submitted
electronically, we are proposing to
amend § 424.36(a) to define ‘‘claim’’ for
purposes of the beneficiary signature
requirements as the claim form itself or
a form that contains adequate notice to
the beneficiary or other authorized
individual that the purpose of the
signature is to authorize a provider or
supplier to submit a claim to Medicare
for specified services furnished to the
beneficiary.
4. Solicitation of Comments and Data
Pertaining to Physician Organ Retrieval
Services
[If you choose to comment on issues
in this section, please include the
caption ‘‘OTHER ISSUES—ORGAN
RETRIEVAL’’ at the beginning of your
comments.]
Since 1987, we have limited the
amount an OPO may reimburse a
physician for cadaveric kidney donor
retrieval services. Chapter 27 of the
Provider Reimbursement Manual (CMSPub. 15–1) limits the payment to a
physician for cadaveric kidney retrieval
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to $1,250 per donor (one or two
kidneys). Although the payments made
to physicians for organ retrieval services
associated with other types of organ
transplants have increased, kidney
retrieval rates have remained at $1,250.
We have received several requests to
change the amount we pay for kidney
retrievals. To date, we do not have data
upon which to base a change in
payment.
In order to determine fair and
reasonable payment for cadaveric organ
retrieval services, we are soliciting
public comments and data that are
reflective of organ retrieval service
costs. We are not limiting our
solicitation to costs associated with
kidney retrieval services, but are
interested in receiving comments and
data pertaining to retrieval services for
all types of organs. We may use this
information to determine the extent to
which a recalculation of the payment for
cadaveric organ retrieval services
performed by a physician is warranted
and to inform any future rulemaking on
this subject. Any future rulemaking
would provide for notice and public
comment.
5. Revision to the ‘‘Appeals of CMS or
CMS Contractor Determinations When a
Provider or Supplier Fails to Meet the
Requirements for Medicare Billing
Privileges’’ Final Rule
[If you choose to comment on issues
in this section, please include the
caption ‘‘OTHER ISSUES—REVISIONS
TO APPEALS FINAL RULE’’ at the
beginning of your comments.]
In the June 27, 2008 Federal Register,
we published the ‘‘Appeals of CMS or
CMS Contractor Determinations When a
Provider or Supplier Fails to Meet the
Requirements for Medicare Billing
Privileges’’ final rule. In § 405.874(b)(2),
we stated, ‘‘The revocation of a
provider’s or supplier’s billing
privileges is effective 30 days after CMS
or the CMS contractor mails notice of its
determination to the provider or
supplier. A revocation based on Federal
exclusion or debarment is effective with
the date of the exclusion or debarment.’’
During the 30 days after CMS or our
contractor mails a revocation notice to
a provider or supplier, the provider or
supplier is afforded the opportunity to
submit a corrective action plan. A
corrective action plan gives a provider
or supplier an opportunity to provide
evidence that demonstrates that the
provider or supplier is in compliance
with Medicare requirements. Moreover,
a provider or supplier can use a
corrective action plan to correct the
deficiency without filing an appeal
under 42 CFR part 498, and remain in
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the Medicare program when the
provider demonstrates that the provider
or supplier is in compliance with
Medicare requirements and the
Medicare contractor accepts the
corrective action plan. In those
situations where a provider or supplier
submits an acceptable corrective action
plan, the provider or supplier maintains
their billing privileges and the
revocation determination is not
implemented.
We maintain that providers or
suppliers are able to provide sufficient
evidence through a corrective action
plan that demonstrates that they are in
compliance with Medicare requirements
when CMS or our contractor imposes a
revocation based on certain types of
adverse actions such as a Federal
exclusion or debarment. Accordingly,
consistent with revoking billing
privileges with the date of exclusion or
debarment, we believe that similarly
situated revocations such as felony
convictions and license suspension or
revocation do not lend themselves to a
corrective action plan and that the
revocation should be effective with the
date of the felony conviction or the
license suspension or revocation.
Moreover, we maintain that when CMS
or our contractor determines that a
provider or supplier, including a
DMEPOS supplier, is no longer
operating at the practice location
provided to Medicare on a paper or
electronic Medicare enrollment
application that the revocation should
be effective with the date that CMS or
our contractor determines that the
provider or supplier is no longer
operating at the practice location.
Further, while we do not believe that
revocations based on felony convictions,
license suspension or revocation, or a
revocation based on a provider or a
supplier no longer being operational at
a specific practice location, lend
themselves to a corrective action plan,
we believe that these providers and
suppliers should be afforded appeal
rights in 42 CFR part 498. We believe
that the appeals process will permit a
provider or supplier who believes that
CMS or our contractor has made an
incorrect decision regarding revocation
based on Federal exclusion or
debarment, felony conviction, license
suspension or revocation, or when we
have determined that the provider or
supplier is no longer operating at the
practice location, the opportunity to
have CMS or our contractor reconsider
its initial revocation determination.
Accordingly, we are proposing to
revise § 405.874(b)(2) from ‘‘The
revocation of provider’s or supplier’s
billing privileges is effective 30 days
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38581
after CMS or the CMS contractor mails
notice of its determination to the
provider or supplier. A revocation based
on Federal exclusion or debarment is
effective with the date of the exclusion
or debarment.’’ to ‘‘The revocation of a
provider’s or supplier’s billing
privileges is effective 30 days after CMS
or the CMS contractor mails notice of its
determination to the provider or
supplier, except if the revocation is
based on Federal exclusion or
debarment, felony conviction, license
suspension or revocation, or the practice
location is determined by CMS or its
contractor not to be operational. When
a revocation is based on an exclusion or
debarment, Federal exclusion or
debarment, felony conviction, license
suspension or revocation, or the practice
location is determined by CMS or its
contractor not to be operational, the
revocation is effective with the date of
exclusion or debarment, felony
conviction, license suspension or
revocation or the date that CMS or its
contractor determined that the provider
or supplier was no longer operational.’’
In addition, to ensure consistency, we
are proposing to revise § 424.535(f) from
‘‘Revocation becomes effective within
30 days of the initial revocation
notification.’’ to ‘‘Revocation becomes
effective 30 days after CMS or the CMS
contractor mails notice of its
determination to the provider or
supplier, except if the revocation is
based on Federal exclusion or
debarment, felony conviction, license
suspension or revocation, or the practice
location is determined by CMS or its
contractor not to be operational. When
a revocation is based on an exclusion or
debarment, Federal exclusion or
debarment, felony conviction, license
suspension or revocation, or the practice
location is determined by CMS or its
contractor not to be operational, the
revocation is effective with the date of
exclusion or debarment, felony
conviction, license suspension or
revocation or the date that CMS or its
contractor determined that the provider
or supplier was no longer operational.’’
We believe that these changes will
ensure that providers and suppliers are
afforded due process rights under 42
CFR part 498, but also ensure that
Medicare is not making or continuing to
make payments to providers and
suppliers who are no longer eligible to
receive payments.
We are soliciting comments on
whether we should establish an
expedited reconsideration process for
providers and suppliers for when we
issue a revocation for the following
reasons: (1) Federal debarment or
exclusion, (2) felony conviction, (3)
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
III. Potentially Misvalued Services
Under the Physician Fee Schedule
[If you choose to comment on issues
in this section, please include the
caption ‘‘POTENTIALLY MISVALUED
SERVICES UNDER THE PFS’’ at the
beginning of your comments.]
imbalance in the number of codes for
which the work RVUs are increased
rather than decreased in the three FiveYear Reviews of work RVUs.
The RUC has created the Five-Year
Review Identification Workgroup to
respond to these concerns regarding the
valuation of codes. The workgroup has
identified some potentially misvalued
codes through several vehicles, namely,
identifying codes with site of service
anomalies, high intra-service work per
unit time (IWPUT), and services with
high volume growth. We plan to address
the RUC’s recommendations from the
February and April 2008 meetings for
codes with site of service anomalies in
the CY 2009 PFS final rule in a manner
consistent with the way we address
other RUC recommendations. Each year
in the PFS final rule with comment
period, we describe the RUC’s
recommendations, state whether or not
we accept them, and provide a rationale
for our decision. The values for these
services will be published as interim
values for 2009.
We believe that there are certain steps
we can take to help address the issue of
potentially misvalued services. The
following is a summary of these
approaches:
A.Valuing Services Under the Physician
Fee Schedule
The American Medical Association’s
Relative Value System Update
Committee (RUC) provides
recommendations to CMS for the
valuation of new and revised codes, as
well as codes identified as misvalued
under the Five-Year Review of Work.
On an ongoing basis, the RUC’s Practice
Expense (PE) Subcommittee reviews
direct PE (clinical staff, medical
supplies, medical equipment) for
individual services and examines the
many broad and methodological issues
relating to the development of PE RVUs.
There has been considerable concern
expressed by the Medicare Payment
Advisory Commission (MedPAC), the
Congress, and other stakeholders in
accurate pricing under the PFS. Despite
the large increase in work RVUs for
many medical visits during the last
Five-Year Review of physician work,
there continues to be concern that the
presence of many overvalued
procedures within the physician fee
schedule disadvantages primary care
services and creates distortion in the
PFS. Critics have stated the relative
1. Updating High Cost Supplies
We are proposing to create a process
to update the prices for high cost supply
items that are paid under the PE
methodology.
The RUC and MedPAC have
recommended that we establish an
update process, at least every 5 years, to
ensure the accuracy and completeness
of the direct PE inputs. Both
organizations have suggested that an
update process for the new, higherpriced supply items should occur more
frequently because prices for these items
may decrease over time as competition
increases. The RUC specifically
requested the review of higher-price
supply items (over $200) and that the repricing be carried out on an annual
basis. In the CY 2006 and CY 2007 PFS
proposed rule and final rule with
comment period, we expressed concern
that submitting more recent and reliable
documentation for supply prices may be
burdensome to the physician specialties
involved.
Upon further review of this issue and
examination of the PE database, we
believe that the burden would be
minimal and the result would be to
sroberts on PROD1PC70 with PROPOSALS
license suspension or revocation, or (4)
when CMS or our contractor determines
that the provider is not operational at
the practice location provided to
Medicare and the provider or supplier
furnishes sufficient evidence to
demonstrate that CMS or our contractor
made a factual error when issuing the
initial revocation determination.
We believe that establishing an
expedited reconsideration process will
afford providers and suppliers with an
administrative remedy similar to a
corrective action plan, but allow CMS or
our contractor to establish an effective
date of revocation on the date of
notification. In addition, we are
soliciting comments on whether CMS or
our contractors should consider
processing expedited reconsiderations
within a specified time period such as
30 days of the date the provider or
supplier furnishes sufficient evidence to
make a reconsideration determination.
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18:46 Jul 03, 2008
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better ensure that we are paying
properly for these supplies. Therefore,
we are proposing a process to update
high cost supplies every 2 years. We
would specifically focus on the supplies
that cost $150 or more of which there
are currently 65 supplies which are
listed in Table 24. Every other year we
would identify supply items in the PE
database costing over $150 and list these
supplies in the proposed rule. We
would request that the specialty
societies or other relevant organizations
provide acceptable documentation
supporting the pricing for the supply
item during the 60-day comment period.
Since it may not be necessary to require
an annual price update for each supply
item over $150, we are proposing to
revalue the list of high cost supply items
on a biennial basis, but are interested in
receiving comments concerning this
proposed timeframe.
Pricing for these higher-priced
supplies would need to be supported by
valid, reliable documentation that
reflects the typical price in the
marketplace. For the past several years
in the proposed rule and final rule with
comment period, we have outlined
examples of acceptable documentation
which include a detailed description
(including system components),
sources, and current pricing
information, such as copies of catalog
pages, hard copies from specific web
pages, invoices, and quotes from
manufacturer, vendors or distributors.
Documentation that does not include
specific pricing information such as
phone numbers and addresses of
manufacturer, vendors or distributors;
Web site links without pricing
information would not be acceptable.
If such acceptable documentation was
not received within the 60-day comment
period for the proposed rule, we would
apply prices that we were able to obtain
through the use of searches for retail
pricing on the internet, supply catalogs
or other sources available to determine
the appropriate cost. We would use the
lowest price identified by these sources.
In future years, we may consider
initiating additional reviews of supplies
that cost less than this amount.
We would also be interested in
receiving comments on alternatives that
could be used to update pricing
information in the absence of
information provided by the specialty
societies and organizations.
E:\FR\FM\07JYP2.SGM
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38583
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
TABLE 24.—TOP 65 HIGH COST SUPPLIES OVER $150—SUPPLIES NEEDING SPECIALTY INPUT FOR PRICE UPDATE
CMS supply
code
Supply description
Unit
SA087 ...............
tray, RTS applicator
(MammoSite).
array kit, GenoSensor ....
probe, radiofrequency, 3
array (StarBurstSDE).
item ..........
$2,550
1
$2,550
19296
General Surgery.
item ..........
item ..........
2,121
1,995
0.16
1
339.36
1,995
catheter, CVA, system,
tunneled w-port, dual
(LifeSite).
stent, vascular, deployment system, Cordis
SMART.
probe, cryoablation
(Visica ICE 30 or 40).
kit, gene, MLL fusion .....
catheter, intradiscal
(spineCATH).
item ..........
1,750
2
3,500
88386
50592,
32998,
20982
36566
Independent Labs.
Diagnostic Radiology,
Urology, Interventional
Radiology.
General Surgery, Thoracic Surgery.
kit .............
1,645
1.5
2467.50
37205,
32506
item ..........
1,589
1
1,589
19105
Cardiology, Diagnostic
Radiology, Vascular
Surgery.
General Surgery.
kit .............
item ..........
1,395
1,380
0.25
1
348.75
1,380
88385
22526,
22527
plasma LDL adsorption
column (Liposorber).
probe, endometrial
cryoablation (Her Option).
kit, hysteroscopic tubal
implant for sterilization.
probe, cryoablation,
renal.
plasma antibody adsorption column (Prosorba).
kit, transurethral microwave thermotherapy.
hysteroscope, ablation
device.
kit, transurethral needle
ablation (TUNA).
kit, photopheresis procedure.
laser tip, diffuser fiber ....
item ..........
1,300
1
1,300
36516
item ..........
1,250
1
1,250
58356
Independent Labs.
Orthopedic Surgery,
Neurosurgery, Diagnostic Radiology,
Interventional Radiology.
Internal Medicine, Cardiology.
OBGYN.
kit .............
1,245
1
1,245
58565
OBGYN.
item ..........
1,175
2.5
2937.50
50593
item ..........
1,150
1
1,150
36515
kit .............
1,149
1
1,149
53850
Urology, Diagnostic Radiology.
Rheumatology, Internal
Medicine, Nephrology.
Urology.
item ..........
1,146
1
1,146
58563
OBGYN.
kit .............
1,050
1
1,050
53852
Urology.
kit .............
858
1
858
36522
item ..........
850
1
850
tray ...........
750
1
750
52647,
52648
31730
Dermatology and Pathology.
Urology.
tray ...........
727
1
727
58353
item ..........
725
1
725
36475
item ..........
719
1
719
kit .............
696
1.5
1,044
21125,
21127,
21215
22520,
22521
kit, transurethral waterkit .............
induced thermotherapy.
kit, PICC with subcut
kit .............
port.
650
1
650
53853
586
1
586
item ..........
558
1
558
SA074 ...............
fiducial screws (set of 4
uou).
kit, endovascular laser
treatment.
kit .............
519
1
519
36570,
36571,
36585
77011,
77301
36478
SA011 ...............
kit, CVA catheter, tunkit .............
neled, with subcut port.
495
1
495
SL209 ................
SD109 ...............
SA092 ...............
SD186 ...............
SD215 ...............
SA075 ...............
SD185 ...............
SA036 ...............
SD177 ...............
SA037 ...............
SA024 ...............
SF030 ................
SA091 ...............
SD018 ...............
SD155 ...............
SD191 ...............
SA039 ...............
SA038 ...............
SA025 ...............
sroberts on PROD1PC70 with PROPOSALS
SD073 ...............
VerDate Aug<31>2005
tray, scoop, fast track
system.
catheter, balloon, thermal ablation
(Thermachoice).
catheter, RF
endovenous occlusion.
plate, surgical, reconstruction, left, 5 x 16
hole.
kit, vertebroplasty (LP2,
CDO).
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Fmt 4701
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procedure
Sfmt 4702
Cost per
procedure
E:\FR\FM\07JYP2.SGM
CPT 1 code
36560,
36561,
36563,
36582,
36583
07JYP2
Medical specialties
General Surgery,
Pulmonology.
OBGYN.
General Surgery, Vascular Surgery.
Maxillofacial Surgery,
Otolaryngology, Oncology Surgery.
Diagnostic Radiology,
Interventional Radiology, Orthopedics.
Urology.
General Surgery, Diagnostic Radiology.
Diagnostic Radiology,
Otolaryngology, IDTF.
General Surgery, Vascular Surgery, Diagnostic Radiology.
General Surgery, Vascular Surgery, Diagnostic Radiology, Pediatric Medicine.
38584
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
TABLE 24.—TOP 65 HIGH COST SUPPLIES OVER $150—SUPPLIES NEEDING SPECIALTY INPUT FOR PRICE UPDATE—
Continued
CMS supply
code
Supply description
Unit
Unit price
Quantity per
procedure
Cost per
procedure
SA015 ...............
kit, for percutaneous
thrombolytic device
(Trerotola).
kit .............
487.50
1
487.50
SD058 ...............
SA093 ...............
electrode, grid ................
kit, priming, random .......
item ..........
kit .............
475
463
1
0.16
475
74.08
SA005 ...............
kit, capsule endoscopy
w-application supplies
(M2A).
kit, capsule, ESO, endoscopy w-application
supplies (ESO).
catheter, balloon, low
profile PTA.
kit .............
450
1
kit .............
450
item ..........
CPT 1 code
Medical specialties
Diagnostic Radiology,
Vascular Surgery, Cardiology, Interventional
Radiology.
450
36870,
37184,
37186,
37187,
37188
95829
88385,
88386
91110
1
450
91111
Gastroenterology.
431.50
2
863
Cardiology, Vascular
Surgery.
item ..........
389
1
389
item ..........
355
1
355
35470,
35471,
35474
21461,
21462
36565
item ..........
337.88
1
337.88
kit, pleural catheter inkit .............
sertion.
collagen, dermal implant item ..........
(2.5ml uou) (Contigen).
kit, CVA catheter, tunkit .............
neled, without portpump.
329
1
329
36217,
36247,
37210
32550
317
1
317
52330
308
1
308
36557,
36558,
36581
catheter, balloon, lacrimal.
kit, percutaneous neuro
test stimulation.
laser tip (single use) ......
item ..........
306
1
306
68816
kit .............
305
1
305
item ..........
290
1
290
kit, loop snare
(Microvena).
agent, embolic, 2 ml uou
kit .............
275
1
275
unit ...........
258
5
1,290
63610,
64561
30117,
52214,
52224,
52317
36595,
37203
37210
SD152 ...............
catheter, balloon, PTA ...
item ..........
243.50
2
487
235
1
235
SD189 ...............
stent, ureteral, witem ..........
guidewire, 3cm flexible
tip.
plate, surgical, mini-com- item ..........
pression, 4 hole.
suture device for vessel
item ..........
closure (Perclose A–T).
35472,
35473,
35475,
35476,
G0392,
G0393
52332
226
1
226
21208
225
1
225
37184,
37205
225
1
225
91035
SD151 ...............
SD193 ...............
SD020 ...............
SD154 ...............
SA077 ...............
SH079 ...............
SA010 ...............
SA022 ...............
SF028 ................
SA020 ...............
sroberts on PROD1PC70 with PROPOSALS
SD207 ...............
SD204 ...............
VerDate Aug<31>2005
plate, surgical, rigid
comminuted fracture.
catheter, CVA, tunneled,
dual (Tesio).
catheter, microcatheter
(selective 3rd order).
sensor, pH capsule
(Bravo).
18:46 Jul 03, 2008
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E:\FR\FM\07JYP2.SGM
07JYP2
General Practice.
Independent Labs, Pediatric Medicine.
Gastroenterology.
Oral Surgery, Maxillofacial Surgery.
General Surgery, Vascular Surgery.
Diagnostic Radiology,
Vascular Surgery, Cardiology.
Thoracic Surgery, Diagnostic Radiology.
Urology.
General Surgery, Interventional Radiology,
Diagnostic Radiology,
Pediatric Medicine,
Nephrology.
?
Urology, OBGYN, Anesthesiology.
Urology, Otolaryngology.
Diagnostic Radiology.
Diagnostic Radiology,
Interventional Radiology.
Cardiology, Vascular
Surgery, Diagnostic
Radiology, Nephrology.
Urology.
Plastic Surgery, Oral
Surgery.
Diagnostic Radiology,
Vascular Surgery, Cardiology.
Gastroenterology.
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
38585
TABLE 24.—TOP 65 HIGH COST SUPPLIES OVER $150—SUPPLIES NEEDING SPECIALTY INPUT FOR PRICE UPDATE—
Continued
CMS supply
code
Supply description
Unit
SD207 ...............
suture device for vessel
item ..........
closure (Perclose A–T).
SD072 ...............
eyelid weight implant,
gold.
catheter, balloon, esophageal or rectal (graded
distention test).
Mammotome probe ........
Unit price
Quantity per
procedure
Cost per
procedure
CPT 1 code
225
1
225
item ..........
217.50
1
217.50
item ..........
217
1
217
91040,
91120
item ..........
200
1
200
19103
tube, jejunostomy ...........
item ..........
195
1
195
gas, nitogen, ultra-high
purity (compressed),
grade 5.0.
catheter, enteroclysis .....
item ..........
189.87
0.03
5.58
49441,
49446,
49451,
49452
88385,
88386
item ..........
183.01
1
183.01
SD175 ...............
guidewire, steerable
(Transcend).
item ..........
180
1
180
SC085 ...............
item ..........
173.33
1
173.33
SD019 ...............
tubing set, plasma exchange.
catheter, balloon,
ureteral-GI (strictures).
item ..........
166
3
498
SD218 ...............
stent, ureteral, without
guidewire.
item ..........
162
1
162
SD205 ...............
sheath, endoscope
ultrasound balloon.
DNA stain kit (per test) ..
laser tip, bare (single
use).
item ..........
154
1
154
31620
Diagnostic Radiology,
Interventional Radiology.
Pulmonary Medicine.
item ..........
item ..........
150
150
1
1
150
150
88358
46917,
46924
Independent Labs.
Colorectal Surgery, General Surgery.
SD216 ...............
SD094 ...............
SL225 ................
SD023 ...............
sroberts on PROD1PC70 with PROPOSALS
SL055 ................
SF029 ................
1 CPT
35470,
35471,
35472,
35473,
35474,
35475,
37187,
37188,
G0392
67912
Medical specialties
74251,
74260,
89100,
89105,
89130,
89132,
89135,
89136,
89140,
89141
36217,
36247,
37205,
37206,
37210,
49440,
49441,
49442,
49446,
49450,
49451,
49452,
49460
36514
43456,
45303,
45340,
45386,
46604
50382,
50385
Cardiology, Vascular
Surgery, Diagnostic
Radiology, Nephrology, Interventional Radiology.
Ophthalmology, Otolaryngology.
Colorectal Surgery, Gastroenterology, Physician Assistants.
Diagnostic Radiology,
General Surgery.
Gastroenterology.
Independent Labs.
Cardiovascular and
Interventional Radiology, Diagnostic Radiology, Neurology,
Pulmonary, Pathology.
Diagnostic Radiology,
Interventional Radiology, Cardiology,
Vascular Surgery,
General Surgery.
Hemotology, Nephrology.
Colorectal Surgery, Gastroenterology, General
Surgery.
codes and descriptions only are copyright 2008 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
VerDate Aug<31>2005
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
2. Review of Services Often Billed
Together and the Possibility of
Expanding the Multiple Procedure
Payment Reduction (MPPR) to
Additional Non-Surgical Procedures
We have a longstanding policy of
reducing payment for multiple surgical
procedures performed on the same
patient, by the same physician, on the
same day. The policy is largely based on
the efficiencies recognized in practice
expenses for pre- and post-surgical
services. Originally, payment was made
in full for the highest priced procedure;
at 50 percent for the second highest
price procedure; and at 25 percent for
the third through fifth procedures. In
1995, the policy was revised to pay the
highest priced procedure in full and at
50 percent for the second through fifth
procedures (59 FR 32767 through 32768
and 59 FR 63423 through 63426).
In 1995, the MPPR policy was also
extended to six nuclear medicine
diagnostic procedures performed on the
same patient on the same day. Payment
is made in full for the highest priced
procedure, and at 50 percent for the
second procedure. Prior to that time, no
payment was generally made for the
second procedure. We also indicated
that we would consider applying the
multiple procedure policy to other
diagnostic tests in the future (59 FR
32769 and 59 FR 63427 through 63428).
In 2006, the policy was extended to
certain diagnostic imaging procedures
performed on contiguous areas of the
body. In such cases, most clinical labor
activities and most supplies are not
performed or furnished twice. The
payment reduction applies to 100
procedure codes within 11 families of
codes. When two or more procedures
within a family are performed on the
same patient in a single session, the TC
of the highest priced procedure is paid
at 100 percent; the TC of each
subsequent procedure is paid at 75
percent. The reduction does not apply
to the PC (70 FR 45849 through 45851
and 70 FR 70261 through 70265).
Some observers have raised concerns
that there may be inequities between
specialties in the current coding and
payment system regarding the extent to
which there are opportunities for
additional coding and payment for
services performed on the same day.
Physicians in some specialties, such as
primary care physicians, typically bill
for their services using evaluation and
management (E/M) codes that represent
a fairly broad package of services (that
include a significant amount of pre- and
post-service care, including
coordination of care). Likewise, a
significant portion of services performed
by specialties such as general or cardiac
surgeons are reported and paid through
comprehensive global surgery policies
which also include pre- and post-service
work, reducing the possibilities for
additional billings. In contrast, many
other services under the PFS are paid
for using codes that represent much
smaller units of service, and in many
cases the codes and payment amounts
might represent fairly small portions of
the total service provided on the same
day.
We plan to perform a data analysis of
non-surgical CPT codes that are often
billed together (for example, 60 to 70
percent of the time) to determine if there
are inequities in PFS payments that are
a result of variations between services in
the comprehensiveness of the codes
used to report the services or in the
payment policies applied to each (for
example, global surgery, MPPRs). As
noted above, clinical labor activities,
supplies and equipment may not be
performed or furnished twice when
multiple procedures are performed.
We invite comments and suggestions
from the RUC and others on this
important issue. As a result of reviewing
the data and any suggestions we receive
regarding these concerns, we may
consider developing proposals to either
bundle additional services or expand
the application of the MPPR to
additional procedures. Any proposed
changes will be made through
rulemaking and be subject to public
comment at a later date.
B. Requested Approaches for the RUC to
Utilize
We have also identified methods that
we are requesting the RUC undertake to
assist in identifying potentially
misvalued services including: (1)
Review the Fastest Growing Procedure
Codes; (2) Review Harvard-Valued
Codes; and (3) Review PE RVUs.
1. Review the Fastest Growing
Procedure Codes
We have identified the fastest growing
services as measured by growth in
utilization from CY 2004 through CY
2007. The codes we identified were the
following:
• Those that represent services that
had three consecutive years of 10
percent (or more) annual growth in
allowed services;
• Excluded if there was less than $1
million in 2007 allowed charges; and
• Included if still active in 2008.
This analysis has resulted in the
identification of over 100 procedure
codes, which are shown in Table 25.
Some of the identified services are new,
while others have been in the clinical
arena for a number of years. These codes
may warrant a reassessment to
determine why there has been an
increase in utilization. There may be a
clinical rationale or there may have
been changes in the relative resources
involved with furnishing the service.
We have requested that the RUC
immediately begin a review of the
fastest growing services by examining
the codes listed in Table 25, Fastest
Growing Procedure Codes. We will
work with the RUC on prioritizing the
review of these codes.
TABLE 25.—FASTEST GROWING PROCEDURE CODES
Description
10022 .....................
13121 .....................
sroberts on PROD1PC70 with PROPOSALS
CPT 1/HCPCS code
Fna w/image ................
Repair of wound or lesion.
Skin tissue rearrangement.
Skin tissue rearrangement.
Island pedicle flap graft
14021 .....................
14300 .....................
15740 .....................
VerDate Aug<31>2005
18:46 Jul 03, 2008
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Growth in
allowed
services
2004–2007
(percent)
Allowed
charges
2007
(millions)
PO 00000
Annual
growth in
allowed
services
2005
(percent)
Annual
growth in
allowed
services
2006
(percent)
Annual
growth in
allowed
services
2007
(percent)
$12
23
88
45
31
15
21
14
19
11
12
49
15
13
15
13
49
14
12
16
6
63
26
11
17
Screening criteria
used by the AMA/
RUC for codes
reviewed between
September 2007–April
2008
Frm 00086
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07JYP2
Site of Service Anomaly.
Site of Service Anomaly.
Site of Service Anomaly.
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
38587
TABLE 25.—FASTEST GROWING PROCEDURE CODES—Continued
CPT 1/HCPCS code
Description
19295 .....................
Place breast clip,
percut.
Inj tendon origin/insertion.
Removal of tissue for
graft.
Revision of lumbar
spine.
Lat lumbar spine fusion
Insert spine fixation device.
Reinsert spinal fixation
Apply spine prosth device.
Repair biceps tendon ..
Reconstruct shoulder
joint.
Transplant hand tendon
Treat hip fracture .........
Injection for knee x-ray
Shoulder arthroscopy/
surgery.
Arthroscop rotator cuff
repr.
Diagnostic laryngoscopy.
Thoracoscopy, surgical
Insertion of pulse generator.
Repair arterial blockage
Repair arterial blockage
Place catheter in artery
Apheresis, selective .....
Phleb veins extrem 10–
20.
Phleb veins extrem 20+
Laparoscopy,
lymphadenectomy.
Uppr gi scope w/
submuc inj.
Uppr gi endoscopy w/
us fn bx.
Endoscopic ultrasound
exam.
Lap colectomy part w/
ileum.
L colectomy/
coloproctostomy.
Laparoscopy, appendectomy.
Colonoscopy, submucous inj.
Incision of gallbladder ..
Laparo ablate renal
mass.
Laparo remove w/ureter.
Insert ureteral support
Urethra pressure profile
20551 .....................
20926 .....................
22214 .....................
22533 .....................
22843 .....................
22849 .....................
22851 .....................
23430 .....................
23472 .....................
26480
27245
27370
29822
.....................
.....................
.....................
.....................
29827 .....................
31579 .....................
32663 .....................
33213 .....................
35470
35474
36248
36516
37765
.....................
.....................
.....................
.....................
.....................
37766 .....................
38571 .....................
43236 .....................
43242 .....................
43259 .....................
44205 .....................
44207 .....................
44970 .....................
45381 .....................
47490 .....................
50542 .....................
50548 .....................
sroberts on PROD1PC70 with PROPOSALS
50605 .....................
51772 .....................
55866 .....................
61793 .....................
61795 .....................
63056 .....................
VerDate Aug<31>2005
Laparo radical prostatectomy.
Focus radiation beam ..
Brain surgery using
computer.
Decompress spinal
cord.
18:46 Jul 03, 2008
Jkt 214001
Growth in
allowed
services
2004–2007
(percent)
Allowed
charges
2007
(millions)
PO 00000
Annual
growth in
allowed
services
2005
(percent)
Annual
growth in
allowed
services
2006
(percent)
Annual
growth in
allowed
services
2007
(percent)
9
43
10
13
14
7
101
17
21
41
4
63
10
16
27
2
110
34
19
32
1
3
584
55
163
20
81
15
44
13
2
24
116
65
47
29
18
12
24
13
3
23
90
74
29
32
21
13
21
16
3
88
2
3
57
68
173
77
26
27
48
24
11
18
59
20
12
12
16
19
43
90
33
21
18
8
51
15
14
15
4
16
102
63
35
24
18
14
27
15
9
19
1
2
3
132
49
70
274
158
38
17
22
75
76
35
16
20
35
25
25
11
15
58
17
3
2
200
295
94
49
23
69
26
57
2
61
26
15
11
7
74
26
19
16
7
42
14
12
11
11
106
53
17
16
9
142
67
24
17
7
51
21
13
10
6
105
36
23
22
3
1
42
128
10
54
14
34
13
11
2
56
18
13
17
1
11
66
76
17
31
15
18
23
14
18
329
87
55
48
13
4
53
46
15
13
16
17
15
11
6
58
21
11
18
Screening criteria
used by the AMA/
RUC for codes
reviewed between
September 2007–April
2008
Frm 00087
Fmt 4701
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E:\FR\FM\07JYP2.SGM
07JYP2
High IWPUT.
High Volume Growth.
High Volume Growth
High Volume Growth.
Codes Reported Together.
New Technology.
38588
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
TABLE 25.—FASTEST GROWING PROCEDURE CODES—Continued
Growth in
allowed
services
2004–2007
(percent)
Allowed
charges
2007
(millions)
Annual
growth in
allowed
services
2005
(percent)
Annual
growth in
allowed
services
2006
(percent)
Annual
growth in
allowed
services
2007
(percent)
Screening criteria
used by the AMA/
RUC for codes
reviewed between
September 2007–April
2008
CPT 1/HCPCS code
Description
63650 .....................
Implant
neuroelectrodes.
Implant
neuroelectrodes.
Revise/remove
neuroelectrode.
Insrt/redo spine n generator.
N block inj, brachial
plexus.
N block inj, sciatic, sng
N block inj fem, single
N block inj fem, cont inf
9
159
47
29
37
2
106
29
23
30
2
81
29
19
17
3
125
53
24
19
6
56
22
12
15
6
5
6
75
116
232
22
57
86
22
16
35
18
19
33
Inj foramen epidural l/s
Inj foramen epidural
add-on.
Implant
neuroelectrodes.
Implant
neuroelectrodes.
Destr paravertebrl
nerve l/s.
Destr paravertebrl
nerve c/t.
Destr paravertebral n
add-on.
Ocular reconst, transplant.
Cataract surgery, complex.
Injection eye drug ........
Biopsy of external ear
Incise inner ear ............
Ct angiography, head ..
Ct angiography, neck ..
Ct thorax w/o dye ........
Ct angiography, chest
Ct neck spine w/o dye
Ct chest spine w/o dye
Ct angiograph pelv w/o
& w/dye.
Ct pelvis w/o dye .........
Ct pelvis w/o & w/dye ..
157
46
62
75
24
34
15
15
14
13
6
1498
63
135
316
3
169
15
25
86
32
89
32
24
15
High Volume Growth.
8
109
34
22
29
High Volume Growth.
7
109
35
24
25
High Volume Growth.
3
200
46
60
28
148
103
34
27
19
High IWPUT.
151
7
3
11
18
140
56
29
6
15
883
52
54
184
216
42
115
102
71
146
202
18
13
61
70
15
51
30
23
55
112
14
16
42
50
11
23
26
20
36
54
13
17
24
23
11
16
23
16
17
High Volume Growth.
135
72
40
78
13
29
12
22
11
13
6
60
22
13
17
8
58
23
12
15
2
183
58
56
15
13
57
22
15
12
27
123
50
31
13
16
251
71
66
23
High Volume Growth.
1
420
17
187
55
High Volume Growth.
28
51
20
13
11
14
81
58
94
23
35
13
22
13
17
681
111
37
25
24
63655 .....................
63660 .....................
63685 .....................
64415 .....................
64445 .....................
64447 .....................
64448 .....................
64483 .....................
64484 .....................
64555 .....................
64561 .....................
64622 .....................
64626 .....................
64627 .....................
65780 .....................
66982 .....................
67028
69100
69801
70496
70498
71250
71275
72125
72128
72191
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
72192 .....................
72194 .....................
73200 .....................
73218 .....................
73580 .....................
73700 .....................
74175 .....................
75635 .....................
sroberts on PROD1PC70 with PROPOSALS
76513 .....................
76536 .....................
76880 .....................
77301 .....................
77418 .....................
VerDate Aug<31>2005
Ct upper extremity w/o
dye.
Mri upper extremity w/o
dye.
Contrast x-ray of knee
joint.
Ct lower extremity w/o
dye.
Ct angio abdom w/o &
w/dye.
Ct angio abdominal arteries.
Echo exam of eye,
water bath.
Us exam of head and
neck.
Us exam, extremity ......
Radiotherapy dose
plan, imrt.
Radiation tx delivery,
imrt.
18:46 Jul 03, 2008
Jkt 214001
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E:\FR\FM\07JYP2.SGM
07JYP2
Site of Service Anomaly.
Site of Service Anomaly.
Site of Service Anomaly.
Site of Service Anomaly/High Volume
Growth.
High Volume Growth.
High Volume Growth.
High Volume Growth.
High Volume Growth.
Codes Reported Together.
High Volume Growth.
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
38589
TABLE 25.—FASTEST GROWING PROCEDURE CODES—Continued
CPT 1/HCPCS code
Description
77781 .....................
High intensity
brachytherapy.
High intensity
brachytherapy.
Immunization admin ....
77782 .....................
90471 .....................
92135 .....................
92136
92285
92587
92986
93308
93613
.....................
.....................
.....................
.....................
.....................
.....................
93652 .....................
93743 .....................
93922
93976
93990
94681
.....................
.....................
.....................
.....................
94762 .....................
95922 .....................
95956 .....................
96567 .....................
96920 .....................
96921 .....................
G0179 ....................
G0181 ....................
G0237 ....................
G0238 ....................
G0249 ....................
G0268 ....................
1 CPT
Annual
growth in
allowed
services
2005
(percent)
Annual
growth in
allowed
services
2006
(percent)
Annual
growth in
allowed
services
2007
(percent)
Screening criteria
used by the AMA/
RUC for codes
reviewed between
September 2007–April
2008
8
144
35
42
27
3
189
51
36
41
High Volume Growth.
20
213
77
41
25
CMS Request—Practice Expense Review.
246
104
32
23
25
57
10
2
1
6
6
78
53
64
90
45
117
34
21
22
26
17
33
17
11
14
17
11
33
14
14
18
29
11
23
2
70
17
18
23
38
139
52
29
22
43
9
3
8
53
38
111
141
21
10
35
52
13
11
26
27
12
12
24
24
6
125
46
30
19
3
247
74
48
35
4
102
50
12
21
2
3
479
137
115
16
72
50
57
36
High Volume Growth.
1
213
44
67
30
High Volume Growth.
52
59
19
19
12
31
49
15
17
11
2
264
69
64
32
High Volume Growth.
3
4
944
325
407
117
77
75
17
12
High Volume Growth.
High Volume Growth.
4
Ophth dx imaging post
seg.
Ophthalmic biometry ....
Eye photography .........
Evoked auditory test ....
Revision of aortic valve
Echo exam of heart .....
Electrophys map 3d,
add-on.
Ablate heart dysrhythm
focus.
Analyze ht pace device
dual.
Extremity study ............
Vascular study .............
Doppler flow testing .....
Exhaled air analysis,
o2/co2.
Measure blood oxygen
level.
Autonomic nerv function test.
Eeg monitoring, cable/
radio.
Photodynamic tx, skin
Laser tx, skin < 250 sq
cm.
Laser tx, skin 250–500
sq cm.
MD recertification HHA
PT.
Home health care supervision.
Therapeutic procd strg
endur.
Oth resp proc, indiv .....
Provide test material,
equipm.
Removal of impacted
wax md.
57
27
11
11
High Volume Growth.
High Volume Growth.
codes and descriptions only are copyright 2008 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
2. Review Harvard-Valued Codes
sroberts on PROD1PC70 with PROPOSALS
Growth in
allowed
services
2004–2007
(percent)
Allowed
charges
2007
(millions)
Currently, there are approximately
2900 codes that were originally valued
using Harvard data and which have not
subsequently been evaluated by the
RUC. These codes represent about $5.0
billion in annual spending under the
PFS and are still being paid on RVUs
that were determined almost 20 years
ago. Reviewing these codes will ensure
that they are valued based upon the
most up to date clinical practice and
that they are not creating inappropriate
incentives.
VerDate Aug<31>2005
18:46 Jul 03, 2008
Jkt 214001
We have requested the RUC to
undertake an ongoing (multi-year) effort
to review the Harvard-valued codes that
have not subsequently been evaluated
by the RUC. As part of our request, we
requested that the initial focus be given
to high-volume, low intensity codes. We
look forward to receiving the
recommendations from the RUC.
3. Review PE RVUs
Practice expenses represent about 44
percent of total relative values for
physicians’ services. Indirect PEs are
allocated in some measure based on
PO 00000
Frm 00089
Fmt 4701
Sfmt 4702
direct PE inputs. Thus, ensuring the
accuracy of direct PE inputs and that
they are in agreement with the clinical
aspects specific to each procedure may
aid in the identification of misvalued
services. We have requested that the
RUC continue the review of direct PE
inputs. We request that the initial focus
be given to the high-volume codes
where the PE payments are significantly
increasing during the transition to the
new PE methodology.
We recognize that the work outlined
here will require significant effort by the
RUC and specialty societies but believe
E:\FR\FM\07JYP2.SGM
07JYP2
38590
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
that this work is necessary to improve
the PFS. We expect that all reviews and
changes to RVUs would be conducted in
tandem with our established regulatory
process such as the annual review of
new/revised codes and the Five-Year
Review.
IV. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information (COI)
requirement is submitted to the Office of
Management and Budget (OMB) for
review and approval. In order to fairly
evaluate whether an information
collection should be approved by OMB,
section 3506(c)(2)(A) of the Paperwork
Reduction Act 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):
sroberts on PROD1PC70 with PROPOSALS
A. ICRs Regarding Independent
Diagnostic Testing Facility (§ 410.33)
Section 410.33(j) states that a
physician or NPP organization
furnishing diagnostic testing services,
except diagnostic mammography
services, must enroll as an IDTF for each
practice location furnishing these
services. The burden associated with
this requirement is the time and effort
for a physician group practice or clinic
to enroll each of the practice locations
in the Medicare program. To enroll in
the program, the physician or NPP
organization must complete a Medicare
enrollment application, the CMS–855B.
The burden associated with completing
and submitting this application is
currently approved under OMB control
number 0938–0685 with an expiration
date of February 28, 2011.
B. ICRs Regarding Exception to the
Referral Prohibition Related to
Compensation Arrangements
(§ 411.357)
As discussed in section II.N. of the
preamble of this proposed rule,
proposed § 411.357(x) would set forth
VerDate Aug<31>2005
18:46 Jul 03, 2008
Jkt 214001
an exception for incentive payment and
shared savings programs. The programs
would involve improvement of quality
of hospital patient care services through
changes in physician clinical or
administrative practices or actual cost
savings for the hospital resulting from
reduction of waste or changes in
physician clinical or administrative
practices, without an adverse affect or
diminution in quality of hospital patient
care services. The hospital-administered
program would be required to have
performance measures that would be
individually tracked and monitored
throughout the term of the arrangement.
In addition, the program would be
required to have at least five physicians
participating in each performance
measure and the program would be
required to undergo periodic
independent medical review (once prior
to the commencement of the program
and annually thereafter) for its impact
(or potential impact) on the quality of
patient care services provided at the
hospital. We anticipate that many
hospitals seeking to create new
incentive payment or shared savings
programs would structure those
arrangements to comply with the
requirements set forth in § 411.357(x).
We have no way of knowing for
certain the number of hospitals that
currently utilize incentive payment or
shared savings programs nor the nature
and/or type of existing programs.
However, we are aware that the Office
of the Inspector General has issued 10
advisory opinions to date approving
proposed incentive payment or shared
savings programs from entities. While
the OIG opinions were limited to
specific arrangements, they did not
afford providers any protection from the
physician self-referral regulations.
Based on information furnished by one
private industry consulting firm, we are
aware of approximately 50 incentive
payment, shared savings or related
programs currently in operation. We
have also received anecdotal
information from industry stakeholders
that the number of programs in
operation may be as high as 100.
Therefore, we estimate that there are
approximately 75 incentive payment,
shared savings or similar programs
currently in operation.
We believe that this proposed
exception, if finalized, would result in
an increase in the number of hospitals
that would create these types of
programs. We clarify that this collection
of information burden would pertain to
hospitals seeking to develop or modify
incentive payment or shared savings
programs. For purposes of this
requirement, we are estimating that 150
PO 00000
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Fmt 4701
Sfmt 4702
hospitals would avail themselves of this
proposed exception.
Proposed § 411.357(x)(1) and (2)
specifies the elements that would be
required in an incentive payment or
shared savings program, including the
determination of performance measures,
and target measures to be achieved
under the program. In addition,
proposed § 411.357(x)(11) would require
that payments made to a physician must
not be based on patient care quality
improvements or cost savings that were
achieved during a prior period of the
arrangement. To the extent that a
hospital elected to distribute payments
to physicians more frequently than the
term of the agreement (for example, a 3year arrangement that provides payment
on an annual basis), these payments
would be required to take into account
previous payments made for
performance measures already achieved.
We believe that the burden associated
with the provisions listed in
§ 411.357(x)(1) through (2) and
§ 411.357(x)(11) would involve the time
and effort each hospital would put forth
into creating its program, and would
vary greatly, depending upon the
performance measures (clinical or
administrative practices), size of the
program, the number of physicians or
other medical staff participating in the
creation of the program, and the
methods used for physician payment.
We estimate 100 burden hours for the
development of each incentive payment
or shared savings program including,
but not limited to, the professional
services of the following individuals;
attorneys, medical directors,
accountants, and database
administrators. The total burden
associated with this requirement would
be 150 hospitals × 100 hours = 15,000
burden hours.
Proposed § 411.357(x)(5) would
require independent medical review of
a hospital’s incentive payment or shared
savings program’s impact on the quality
of patient care services provided at the
hospital. In addition, corrective action
would be required in instances where
the independent medical review
indicates a diminution in the quality of
patient care services. The review would
be required to take place prior to
commencement of the program and at
least annually thereafter. The burden
associated with the requirements in
proposed § 411.357(x)(5) would be the
time and effort necessary for a hospital
to obtain, both prior to and during the
term of the program, a written
independent medical review of the
program and follow up on any
recommended corrective action. We
believe it would take 20 hours for each
E:\FR\FM\07JYP2.SGM
07JYP2
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
hospital to initially obtain independent
expert medical review. Thereafter, the
independent medical review that would
be required to be conducted periodically
is estimated to impose a burden on the
hospital of 10 hours. The total burden
associated with this requirement would
be 150 hospitals × 20 hours for the first
year of a program and 150 hospitals ×
10 hours annually thereafter = 4500
hours, assuming hospitals, on average,
implement a 2-year incentive payment
or shared savings program.
Proposed § 411.357(x)(7) would
require hospitals to provide written
disclosure to patients affected by the
program regarding the program and the
physician’s participation in the
program. The burden associated with
this requirement would be time and
effort necessary for the hospital to
provide disclosure in writing to patients
that would be affected by the program.
We believe that it would take each
hospital 1 hour to draft a standard
disclosure. In addition, we believe it
would take each hospital 1 minute to
provide the written disclosure to
potentially all patients. Based on
anecdotal accounts of the number of
patients involved historical gainsharing
programs, we estimate that each
hospital would need to provide
standard disclosure to approximately
5,000 patients. However, we recognize
that hospital size and patient volume
will vary significantly from program to
program. The total burden associated
with this requirement would be 150
hospitals × 1 hour = 150 hours to draft
a standard disclosure. We estimate the
burden of providing the disclosure to
patients to be (150 hospitals × (1
minute/60 minutes/hour) × 5,000
patients) = 12,500 hours. The total
burden associated with the
requirements contained in
§ 411.357(x)(7) is 12,650 hours.
Section 411.357(x)(8) would require
that the incentive payment or shared
savings program arrangements be set out
in writing, signed by the parties, and
specify the basis for the remuneration.
Each specific performance measure and
the resulting payment (or formula for
payment) must also be clearly and
separately identified. In addition,
§ 411.357(x)(15) would require that the
hospital maintain accurate and
contemporaneous documentation of the
incentive payment or shared savings
program and make documentation
available to the Secretary upon request.
The burden associated with the
requirements listed in § 411.357(x)(8)
through (10) and § 411.357(x)(15) would
be the time and effort necessary to draft
an arrangement with the
aforementioned information. While
these requirements are subject to the
PRA, we believe the burden associated
with drafting and maintaining written
arrangements detailing conditions of
remuneration would be part of usual
and customary business practices and
thereby exempt from the PRA under 5
CFR 1320.3(b)(2).
C. ICRs Regarding Dispute Resolution
and Process for Suspension or
Termination of Approved CAP Contract
and Termination or Physician
Participation Under Exigent
Circumstances (§ 414.917).
Section 414.917(b)(4) states that an
approved CAP vendor may appeal a
termination by requesting a
reconsideration. The burden associated
with this requirement is the time and
effort necessary to submit a
reconsideration request to CMS. While
this requirement is subject to the PRA,
the associated burden is exempt under
5 CFR 1320.4(a)(2). Information
collected as part of an administrative
action is not subject to the PRA.
D. ICRs Regarding Additional Provider
and Supplier Requirements for Enrolling
and Maintaining Active Enrollment
Status in the Medicare Program
(§ 424.516).
Section 424.516(d) discusses the
reporting requirements for physician
38591
groups/organizations, physicians and
NPPs. Specifically, the aforementioned
providers must report to CMS, within 30
days the information listed in
§ 424.516(d)(1). Additionally, all other
changes in enrollment must be reported
within 90 days.
Section 424.516(e) addresses the
reporting requirements for all other
providers and suppliers. Providers not
mentioned in § 424.516(a) through (d)
must report to CMS, within 30 days,
changes of ownership, including
changes in authorized official(s) or
delegated official(s). All other changes
in enrollment must be reported within
90 days.
The burden associated with the
requirements contained in § 424.516(d)
through (e) is the time and effort
necessary to report the applicable
information to CMS. While this
requirement is subject to the PRA, we
have no way to accurately quantify the
number of submissions. Each
submission will be reviewed on a caseby-case basis.
Section § 424.516(d) states providers
or suppliers are required to maintain
ordering and referring documentation,
including the NPI, received from a
physician or eligible NPP for 10 years
from the date of service. Physicians and
NPPs are required to maintain written
ordering and referring documentation
for 10 years from the date of service.
The burden associated with these
recordkeeping requirements is the time
and effort associated with maintaining
the aforementioned documentation for
10 years. While these requirements are
subject to the PRA, we believe the
burden is exempt because the
requirement is part of a usual and
customary business practice. As stated
in 5 CFR 1320.3(b)(2), the time, effort,
and financial resources necessary to
comply with a COI that would be
incurred by persons in the normal
course of their activities (for example, in
compiling and maintaining business
records) is not subject to the PRA.
TABLE 26.—ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN
OMB control
No.
§ 410.33 ................................................................................
§ 411.357(x)(1–2) and (x)(11) ..............................................
§ 411.357(x)(5) .....................................................................
sroberts on PROD1PC70 with PROPOSALS
Regulation section(s)
0938–0685
0938–New
0938–New
........................
0938–New
........................
400,000
150
150
150
150
150
........................
400,150
§ 411.357(x)(7) .....................................................................
Total ..............................................................................
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Respondents
Sfmt 4702
Burden per response (hours)
Total annual
burden (hours)
400,000
150
150
150
150
750,000
2.5
100
20
10
1
.01666
1,001,503
15,000
4,500
1,500
150
12,500
1,150,150
133.51666
1,035,153
Responses
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This proposed rule imposes COI
requirements as outlined in the
regulation text and specified above.
However, this proposed rule also makes
reference to several associated
information collections that are not
discussed in the regulation text. The
following is a discussion of these
collections, which have already
received OMB approval.
Part B Drug Payment
Section II.F.1 of the preamble of this
proposed rule discusses payment for
Medicare Part B drugs and biologicals
under the ASP methodology. Drug
manufacturers are required to submit
ASP data to us on a quarterly basis. The
collection of ASP data imposes a
reporting requirement on the public.
The burden associated with this
requirement is the time and effort
required by manufacturers of Medicare
Part B drugs and biologicals to calculate,
record, and submit the required data to
CMS. While the burden associated with
this requirement is subject to the PRA,
it is currently approved under OMB
control number 0938–0921, with an
expiration date of May 31, 2009.
sroberts on PROD1PC70 with PROPOSALS
Competitive Acquisition Program (CAP)
Section II.F.2. of this proposed rule
discusses the Part B CAP issues. While
we are not imposing any new burden, it
should be noted that all of the
information collection components of
the CAP have been reviewed and
approved by OMB. They are approved
under OMB control numbers, 0938–
0987, 0938–0955, and 0938–0954 with
expiration dates of April 30, 2009,
August 31, 2009, and July 31, 2008,
respectively.
Physician Quality Reporting Initiative
Section II.O. of the preamble
discusses the background of the
reporting initiative and provides
information about the measures
available to eligible professionals who
choose to participate in PQRI. Section
1848(k)(1) of the Act requires the
Secretary to implement a system for the
reporting by eligible professionals of
data on quality measures.
As stated in section II.O.1, eligible
professionals include physicians, other
practitioners as described in section
1842(b)(18)(c) of the Act, physical and
occupational therapists, and qualified
speech-language pathologists. This is a
voluntary reporting initiative. Eligible
professionals may choose whether to
participate and satisfactorily submit
data on quality measures for covered
professional services.
The burden associated with the
requirements of this voluntary reporting
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initiative is the time and effort
associated with eligible professionals
identifying applicable PQRI quality
measures for which they can report the
necessary information.
In addition, for claims-based
reporting, eligible professionals must
gather the required information, select
the appropriate quality data codes, and
include the appropriate quality data
codes on the claims they submit for
payment. The PQRI will collect qualitydata codes as additional (optional) line
items on the existing HIPAA transaction
837–P and/or CMS Form 1500. We do
not anticipate any new forms and no
modifications to the existing transaction
or form. We also do not anticipate
changes to the 837–P or CMS Form 1500
for CY 2009.
Because this is a voluntary program,
it is impossible to estimate with any
degree of accuracy how many eligible
professionals will opt to participate in
the PQRI in CY 2009. Moreover, the
time needed for an eligible professional
to review the quality measures and
other information, select measures
applicable to his or her patients and the
services he or she furnishes to them,
and incorporate the use of quality data
codes into the office work flows is
expected to vary along with the number
of measures that are potentially
applicable to a given professional’s
practice.
We estimate that the additional time
required to put quality data codes on
each claim is not a material increment
to the time required to code the claim
for payment. The total estimated annual
burden for this requirement will also
vary along with the volume of claims on
which quality data is reported.
For registry-based reporting, there
would be no additional burden for
eligible professionals to report data to a
registry as eligible professionals are not
required to report data to registries to
participate in the PQRI and more than
likely would already be reporting data
to the registry. Little, if any, additional
data would need to be reported to the
registry for purposes of participation in
the 2009 PQRI. However, eligible
professionals would need to authorize
or instruct the registry to submit quality
measures results and numerator and
denominator data on quality measures
to CMS on their behalf. We estimate that
the time and effort associated with this
would be approximately 5 minutes for
each eligible professional that wishes to
authorize or instruct the registry to
submit quality measures results and
numerator and denominator data on
quality measures to CMS on their
behalf.
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Similarly, registries are not required
to participate in this voluntary
initiative. Registries interested in
submitting quality measures results and
numerator and denominator data on
quality measures to CMS on their
participants’ behalf would need to
complete a self-nomination process in
order to be considered ‘‘qualified’’ to
submit on behalf of eligible
professionals.
The burden associated with the
registry-based submission requirements
of this voluntary reporting initiative is
the time and effort associated with the
registry calculating quality measure
results from the data submitted to the
registry by its participants and
submitting the quality measures results
and numerator and denominator data on
quality measures to CMS on behalf of
their participants. The time needed for
a registry to review the quality measures
and other information, calculate the
measures results, and submit the
measures results and numerator and
denominator data on the quality
measures on their participants behalf is
expected to vary along with the number
of eligible professionals reporting data
to the registry and the number of
applicable measures. However, we
believe that registries already perform
many of these activities for their
participants. The number of measures
that the registry intends to report to
CMS and how similar the registry’s
measures are to CMS’ PQRI measures
will determine the time burden to the
registry.
For EHR-based submission, the
eligible professional must review the
quality measures on which we will be
accepting PQRI data extracted from
EHRs, select the appropriate quality
measures, extract the necessary clinical
data from his or her EHR, and submit
the necessary data to the CMSdesignated clinical warehouse. Because
this manner of reporting quality data to
CMS is new to PQRI for 2009 and
participation in this reporting initiative
is voluntary, it is impossible to estimate
with any degree of accuracy how many
eligible professionals will opt to
participate in the PQRI through the EHR
mechanism in CY 2009. Similar to the
burden associated with claims-based
reporting of quality data, the time
needed for an eligible professional to
review the quality measures and other
information, select measures applicable
to his or her patients and the services he
or she furnishes to them, is expected to
vary along with the number of measures
that are potentially applicable to a given
professional’s practice. Once the EHR is
programmed by the vendor to allow data
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submission to CMS, the burden to the
eligible professional should be minimal.
If you comment on these information
collection and recordkeeping
requirements, please do either of the
following:
1. Submit your comments
electronically as specified in the
ADDRESSES section of this proposed rule;
or
2. Mail copies to the address specified
in the ADDRESSES section of this
proposed rule and to the Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Room 10235, New Executive Office
Building, Washington, DC 20503, Attn:
CMS Desk Officer, [CMS–1403–P], Fax
(202) 395–6974.
sroberts on PROD1PC70 with PROPOSALS
V. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
VI. Regulatory Impact Analysis
[If you choose to comment on issues
in this section, please include the
caption ‘‘IMPACT’’ at the beginning of
your comments.]
We have examined the impact of this
rule as required by Executive Order
12866 on regulatory planning and
review (September 30, 1993, as further
amended), the Regulatory Flexibility
Act (RFA) (September 19, 1980 Pub. L.
96–354), section 1102(b) of the Social
Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995
(March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Order 12866 (as amended
by Executive Order 13258 and 13422),
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 one year).
As indicated in more detail below in
this regulatory impact analysis, we
estimate that the PFS provisions
included in this proposed rule will
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redistribute more than $100 million in
1 year. We estimate that this rulemaking
is ‘‘economically significant’’ as
measured by the $100 million threshold,
and hence also a major rule under the
Congressional Review Act. Accordingly,
we have prepared a RIA that to the best
of our ability presents the costs and
benefits of the rulemaking.
The RFA requires agencies to analyze
options for regulatory relief of small
businesses and other small entities, if a
rule has a significant impact on a
substantial number of small entities. For
purposes of the RFA, we estimate that
most hospitals and most other providers
are small entities as that term is used in
the RFA (including small businesses,
nonprofit organizations, and small
governmental jurisdictions). Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of $6.5 million to $31.5 million in any
1 year (for further information, see the
Small Business Administration’s
regulation at 70 FR 72577, December 6,
2005.) Individuals and States are not
included in the definition of a small
entity. The RFA requires that we
analyze regulatory options for small
businesses and other entities. We
prepare a regulatory flexibility analysis
unless we certify that a rule would not
have a significant economic impact on
a substantial number of small entities.
The analysis must include a justification
concerning the reason action is being
taken, the kinds and number of small
entities the rule affects, and an
explanation of any meaningful options
that achieve the objectives with less
significant adverse economic impact on
the small entities.
For purposes of the RFA, physicians,
NPPs, and suppliers including IDTFs
are considered small businesses if they
generate revenues of $6.5 million or
less. Approximately 95 percent of
physicians are considered to be small
entities. There are about 980,000
physicians, other practitioners, and
medical suppliers that receive Medicare
payment under the PFS.
The CAP provides alternatives to
physicians who do not wish to purchase
drugs directly or collect coinsurance.
The impact of the CAP provisions on an
individual physician is dependent on
whether the drugs they provide to
Medicare beneficiaries are included in
the list of CAP drugs and whether the
physician chooses to obtain drugs
administered to Medicare beneficiaries
through the CAP. The proposed CAP
provisions in this proposed rule will
also have a potential impact on entities
that are involved in the dispensing or
distribution of drugs, plan to become
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38593
approved CAP vendors, or are approved
CAP vendors.
For purposes of the RFA,
approximately 80 percent of clinical
diagnostic laboratories are considered
small businesses according to the Small
Business Administration’s size
standards. These are posted on the
following Web site: https://sba.gov/idc/
groups/public/documents/
sba_homepage/serv_sstd_tablepdf.pdf .
In addition, most ESRD facilities are
considered small entities for purposes of
the RFA, either based on nonprofit
status or by having revenues of $6.5
million to $31.5 million or less in any
year. We consider a substantial number
of entities to be affected if the proposed
rule is estimated to impact more than 5
percent of the total number of small
entities. Based on our analysis of the
926 nonprofit ESRD facilities
considered small entities in accordance
with the above definitions, we estimate
that the combined impact of the
proposed changes to payment for renal
dialysis services included in this
proposed rule would have a 0.2 percent
increase in overall payments relative to
current overall payments. The majority
of small entities would experience
impacts of less than 3 percent of total
revenues. We note that although the
overall effect of the wage index changes
is budget neutral, there are increases
and decreases based on the location of
individual facilities. The analysis and
discussion provided in this section, as
well as elsewhere in this proposed rule,
complies with the RFA requirements.
For the e-prescribing provisions,
physician practices and independent
pharmacies are considered small
entities.
Because we acknowledge that many of
the affected entities are small entities,
the analysis discussed throughout the
preamble of this proposed rule
constitutes our initial regulatory
flexibility analysis for the remaining
provisions. Therefore, we are soliciting
comments on our estimates and analysis
of the impact of this proposed rule on
those small entities.
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 603 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 a metropolitan
statistical area and has fewer than 100
beds. We have determined that this
proposed rule would have minimal
impact on small hospitals located in
rural areas. Of the 196 hospital-based
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ESRD facilities located in rural areas,
only 40 are affiliated with hospitals
with fewer than 100 beds.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2008, that
threshold is approximately $130
million. This proposed rule will not
mandate any requirements for State,
local, or tribal governments. Medicare
beneficiaries are considered to be part of
the private sector for this purpose. A
discussion concerning the impact of this
rule on beneficiaries is found later in
this section.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on State and local
governments, preempts State law, or
otherwise has Federalism implications.
The e-prescribing portions of this
proposed rule present a potential
Federalism implication. No State
categorically bars e-prescribing, but the
scope and substance of State laws varies
widely among the States. In recent
years, many States have more actively
legislated in this area. Should a State
law be contrary to the Part D eprescribing standards, or should it
restrict the ability to carry out the
Medicare Part D e-prescribing program,
the MMA provides for preemption of
that State law at section 1860D–4(e)(5)
of the Act. It provides:
(5) Relation to State Laws. The standards
promulgated under the subsection shall
supersede any State law or regulation that—
(A) Is contrary to the standards or restricts
the ability to carry out this part; and
(B) Pertains to the electronic transmission
of medication history and of information on
eligibility, benefits, and prescriptions with
respect to covered part D drugs under this
part.
sroberts on PROD1PC70 with PROPOSALS
For the reasons given above, we have
determined that States would not incur
any direct costs as a result of this
proposed rule. However, as mandated
by section 1860D–4(e) of the Act, and
under Executive Order 13132, we are
required to minimize the extent of
preemption, consistent with achieving
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the objectives of the Federal statute, and
to meet certain other conditions. We
believe that, taken as a whole, this
proposed rule would meet these
requirements.
We have prepared the following
analysis, which, together with the
information provided in the rest of this
preamble, meets all assessment
requirements. The analysis explains the
rationale for and purposes of this
proposed rule; details the costs and
benefits of the rule; analyzes
alternatives; and presents the measures
we propose to use to minimize the
burden on small entities. As indicated
elsewhere in this proposed rule, we
propose a variety of changes to our
regulations, payments, or payment
policies to ensure that our payment
systems reflect changes in medical
practice and the relative value of
services. We provide information for
each of the policy changes in the
relevant sections of this proposed rule.
We are unaware of any relevant Federal
rules that duplicate, overlap or conflict
with this proposed rule. The relevant
sections of this proposed rule contain a
description of significant alternatives if
applicable.
A. RVU Impacts
1. Resource-Based Work and PE RVUs
Section 1848(c)(2)(B)(ii) of the Act
requires that increases or decreases in
RVUs may not cause the amount of
expenditures for the year to differ by
more than $20 million from what
expenditures would have been in the
absence of these changes. If this
threshold is exceeded, we make
adjustments to preserve budget
neutrality (BN). In the CY 2007 PFS
final rule with comment period, the $4
billion impact of changes in work RVUs
resulting from the 5-Year Review
required that a BN adjustment be made.
As stated in the CY 2007 PFS final
rule with comment period, the work
adjustor for 2008, was approximately
0.8806. Since there are no additional
work RVU changes associated with the
5-Year Review of work RVUs, the work
adjustor will remain at 0.8806. Table 27
shows the specialty-level impact of the
work and PE RVU changes. This rule
proposes the PE RVUs for CY 2009
which is the third year of a four-year
transition to fully implemented resource
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based PE RVUs. There are no changes in
work RVUs proposed in this rule. The
process for changes in work RVUs is to
publish these changes as interim final in
the final rule with comment published
later in the year.
Our estimates of changes in Medicare
revenues for PFS services compare
payment rates for CY 2008 with
proposed payment rates for CY 2009
using CY 2007 Medicare utilization for
all years. We are using CY 2007
Medicare claims processed and paid
through March 30, 2008, that we
estimate are 98 percent complete. To the
extent that there are year-to-year
changes in the volume and mix of
services provided by physicians, the
actual impact on total Medicare
revenues will be different than those
shown in Table 27. The payment
impacts reflect averages for each
specialty based on Medicare utilization.
The payment impact for an individual
physician would be different from the
average, based on the mix of services the
physician provides. The average change
in total revenues would be less than the
impact displayed here because
physicians furnish services to both
Medicare and non-Medicare patients
and specialties may receive substantial
Medicare revenues for services that are
not paid under the PFS. For instance,
independent laboratories receive
approximately 80 percent of their
Medicare revenues from clinical
laboratory services that are not paid
under the PFS.
Table 27 shows only the payment
impact on PFS services. The following
is an explanation of the information
presented in Table 27.
• Specialty: The physician specialty
or type of practitioner/supplier.
• Allowed Charges: Allowed charges
are the Medicare Fee Schedule amounts
for covered services and include
coinsurance and deductibles (which are
the financial responsibility of the
beneficiary). These amounts have been
summed across all services provided by
physicians, practitioners, or suppliers
within a specialty to arrive at the total
allowed charges for the specialty.
• Impact of PE RVU changes. The
impact is shown for both 2009, which
is the third year of the 4-year transition
using the new methodology, and the
fully implemented 2010 PE RVUs.
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TABLE 27.—TOTAL ALLOWED CHARGE IMPACT FOR PRACTICE EXPENSE RVU CHANGES
Impact of PE RVU changes
Allowed
charges (mil)
Specialty
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
TOTAL ....................................................................................................................................
ALLERGY/IMMUNOLOGY .....................................................................................................
ANESTHESIOLOGY ..............................................................................................................
CARDIAC SURGERY ............................................................................................................
CARDIOLOGY .......................................................................................................................
COLON AND RECTAL SURGERY .......................................................................................
CRITICAL CARE ....................................................................................................................
DERMATOLOGY ...................................................................................................................
EMERGENCY MEDICINE .....................................................................................................
ENDOCRINOLOGY .............................................................................................................
FAMILY PRACTICE .............................................................................................................
GASTROENTEROLOGY .....................................................................................................
GENERAL PRACTICE .........................................................................................................
GENERAL SURGERY .........................................................................................................
GERIATRICS .......................................................................................................................
HAND SURGERY ................................................................................................................
HEMATOLOGY/ONCOLOGY ..............................................................................................
INFECTIOUS DISEASE .......................................................................................................
INTERNAL MEDICINE .........................................................................................................
INTERVENTIONAL RADIOLOGY ........................................................................................
NEPHROLOGY ....................................................................................................................
NEUROLOGY ......................................................................................................................
NEUROSURGERY ...............................................................................................................
NUCLEAR MEDICINE .........................................................................................................
OBSTETRICS/GYNECOLOGY ............................................................................................
OPHTHALMOLOGY .............................................................................................................
ORTHOPEDIC SURGERY ..................................................................................................
OTOLARYNGOLOGY ..........................................................................................................
PATHOLOGY .......................................................................................................................
PEDIATRICS ........................................................................................................................
PHYSICAL MEDICINE .........................................................................................................
PLASTIC SURGERY ...........................................................................................................
PSYCHIATRY ......................................................................................................................
PULMONARY DISEASE ......................................................................................................
RADIATION ONCOLOGY ....................................................................................................
RADIOLOGY ........................................................................................................................
RHEUMATOLOGY ...............................................................................................................
THORACIC SURGERY ........................................................................................................
UROLOGY ...........................................................................................................................
VASCULAR SURGERY .......................................................................................................
AUDIOLOGIST .....................................................................................................................
CHIROPRACTOR ................................................................................................................
CLINICAL PSYCHOLOGIST ................................................................................................
CLINICAL SOCIAL WORKER .............................................................................................
NURSE ANESTHETIST .......................................................................................................
NURSE PRACTITIONER .....................................................................................................
OPTOMETRY .......................................................................................................................
ORAL/MAXILLOFACIAL SURGERY ...................................................................................
PHYSICAL/OCCUPATIONAL THERAPY ............................................................................
PHYSICIAN ASSISTANT .....................................................................................................
PODIATRY ...........................................................................................................................
DIAGNOSTIC TESTING FACILITY .....................................................................................
INDEPENDENT LABORATORY ..........................................................................................
PORTABLE X-RAY SUPPLIER ...........................................................................................
$68,076
157
1,579
327
6,535
112
181
2,159
1,962
317
4,396
1,545
692
1,974
142
73
1,709
455
8,727
196
1,510
1,231
510
66
520
4,202
2,877
824
833
59
697
236
927
1,496
1,591
4,697
439
353
1,804
575
28
620
456
301
670
781
719
31
1,458
580
1,433
1,029
754
51
2009 (PE
trans. year 3)
(percent)
0
1
¥1
¥1
¥1
1
0
3
0
0
0
1
0
0
0
¥1
0
1
0
¥1
¥1
0
¥1
0
0
¥1
0
¥1
0
0
¥1
0
1
0
¥1
0
0
¥1
0
0
¥10
¥1
¥2
¥2
0
0
0
1
1
0
2
¥1
5
2
2010 (PE full
implement.)
(percent)
0
2
¥2
¥1
¥2
2
¥1
5
0
0
1
3
0
0
0
¥2
¥1
1
0
¥2
¥3
0
¥1
¥1
0
¥1
¥1
¥1
¥1
1
¥1
1
1
1
¥1
1
¥1
¥1
0
0
¥20
¥2
¥4
¥3
0
1
0
3
3
1
4
¥1
11
5
*Components may not sum to total due to rounding.
sroberts on PROD1PC70 with PROPOSALS
2. Adjustments for Payments for
Imaging Services
Section 5102 of the Deficit Reduction
Act of 2005 (Pub. L. 109–171) (DRA)
exempts the estimated savings from the
application of the OPPS-based payment
limitation on the TC for PFS imaging
services from the PFS BN requirement.
We estimate that the combined impact
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Jkt 214001
of the current BN exemptions instituted
by section 5102 of the DRA, the
proposed addition of 10 services and the
removal of 1 deleted service from the
list of services subject to the MPPR for
diagnostic imaging services, and the
proposed payment revisions to OPPS
payment amounts (which serve as a cap
on the TCs under the PFS) would result
PO 00000
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Fmt 4701
Sfmt 4702
in no measurable changes in the
specialty specific impacts for 2009. In
addition, while the MPPR was
implemented administratively, section
5102 of the Deficit Reduction Act of
2005 subsequently provided for the
exemption of reduced expenditures
resulting from this policy from the
statutory BN requirement. We would
E:\FR\FM\07JYP2.SGM
07JYP2
38596
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
exempt from budget neutrality the
reduced expenditures resulting from the
additional 10 services proposed to be
added and the 1 service proposed to be
removed from the list of services subject
to the MPPR list. See Table 3 in Section
E.2. of this proposed rule for a listing of
those services which are being added
and removed from the list of services
subject to the MPPR.
3. Combined Impact
Table 28 shows the specialty-level
impact of the proposed work and PE
RVU changes, and our most recent
estimate (¥5.4 percent) of the CY 2009
Medicare PFS update.
As indicated in Table 28, our
estimates of changes in Medicare
revenues for PFS services compare
payment rates for CY 2008 with
proposed payment rates for CY 2009
using CY 2007 Medicare utilization
crosswalked to 2008 services. To the
extent that there are year-to-year
changes in the volume and mix of
services provided by physicians, the
actual impact on total Medicare
revenues will be different than those
shown in Table 28. The payment
impacts reflect averages for each
specialty based on Medicare utilization.
The payment impact for an individual
physician would be different from the
average, based on the mix of services the
physician provides.
Table 28 shows only the payment
impact on PFS services. The following
is an explanation of the information
represented in Table 28.
• Specialty: The physician specialty
or type of practitioner/supplier.
• Allowed Charges: Allowed charges
are the Medicare Fee Schedule amounts
for covered services and include
copayments and deductibles (which are
the financial responsibility of the
beneficiary). These amounts have been
summed across all services provided by
physicians, practitioners, or suppliers
with a specialty to arrive at the total
allowed charges for the specialty.
• Impact of the 2009 Work RVU
(including the proposed addition of 10
services and deletion of 1 service from
the list of services subject to the
multiple procedure payment reduction
for diagnostic imaging services)and PE
RVU proposed changes using the
methodology finalized in the CY 2007
PFS final rule with comment period and
the revised data sources discussed in
this proposed rule.
• CY 2009 Update: The percentage
decrease in allowed charges attributed
to the estimated CY 2009 PFS
conversion factor update (¥5.4
percent).
• Combined impact with CY 2009
update: The CY 2009 percentage
decrease in allowed charges attributed
to the impact of the work and PE RVU
changes and the CY 2009 update.
TABLE 28.—COMBINED CY 2009 MEDICARE PHYSICIAN FEE SCHEDULE TOTAL ALLOWED CHARGE IMPACT
Allowed
charges
(mil)
sroberts on PROD1PC70 with PROPOSALS
Specialty
1. TOTAL .........................................................................................................................
2. ALLERGY/IMMUNOLOGY ..........................................................................................
3. ANESTHESIOLOGY ....................................................................................................
4. CARDIAC SURGERY ..................................................................................................
5. CARDIOLOGY .............................................................................................................
6. COLON AND RECTAL SURGERY .............................................................................
7. CRITICAL CARE .........................................................................................................
8. DERMATOLOGY .........................................................................................................
9. EMERGENCY MEDICINE ...........................................................................................
10. ENDOCRINOLOGY ...................................................................................................
11. FAMILY PRACTICE ..................................................................................................
12. GASTROENTEROLOGY ...........................................................................................
13. GENERAL PRACTICE ..............................................................................................
14. GENERAL SURGERY ...............................................................................................
15. GERIATRICS .............................................................................................................
16. HAND SURGERY ......................................................................................................
17. HEMATOLOGY/ONCOLOGY ....................................................................................
18. INFECTIOUS DISEASE ............................................................................................
19. INTERNAL MEDICINE ..............................................................................................
20. INTERVENTIONAL RADIOLOGY .............................................................................
21. NEPHROLOGY .........................................................................................................
22. NEUROLOGY ............................................................................................................
23. NEUROSURGERY ....................................................................................................
24. NUCLEAR MEDICINE ...............................................................................................
25. OBSTETRICS/GYNECOLOGY .................................................................................
26. OPHTHALMOLOGY ..................................................................................................
27. ORTHOPEDIC SURGERY ........................................................................................
28. OTOLARYNGOLOGY ...............................................................................................
29. PATHOLOGY ............................................................................................................
30. PEDIATRICS .............................................................................................................
31. PHYSICAL MEDICINE ..............................................................................................
32. PLASTIC SURGERY .................................................................................................
33. PSYCHIATRY ............................................................................................................
34. PULMONARY DISEASE ...........................................................................................
35. RADIATION ONCOLOGY .........................................................................................
36. RADIOLOGY .............................................................................................................
37. RHEUMATOLOGY ....................................................................................................
38. THORACIC SURGERY .............................................................................................
39. UROLOGY .................................................................................................................
40. VASCULAR SURGERY ............................................................................................
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Impact of
work and
PE RVU
changes*
(percent)
$68,076
157
1,579
327
6,535
112
181
2,159
1,962
317
4,396
1,545
692
1,974
142
73
1,709
455
8,727
196
1,510
1,231
510
66
520
4,202
2,877
824
833
59
697
236
927
1,496
1,591
4,697
439
353
1,804
575
E:\FR\FM\07JYP2.SGM
0
1
¥1
¥1
¥1
1
0
3
0
0
0
1
0
0
0
¥1
0
1
0
¥1
¥1
0
¥1
0
0
¥1
0
¥1
0
0
¥1
0
1
0
¥1
0
0
¥1
0
0
07JYP2
2009 Update (Cur.
Law)**
(percent)
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
Combined
impact with
CY 2009
update***
(percent)
¥5
¥4
¥6
¥6
¥7
¥5
¥6
¥3
¥6
¥5
¥5
¥4
¥5
¥5
¥5
¥6
¥6
¥5
¥5
¥6
¥7
¥6
¥6
¥6
¥6
¥6
¥6
¥6
¥6
¥5
¥6
¥5
¥5
¥5
¥6
¥5
¥6
¥6
¥5
¥5
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed Rules
TABLE 28.—COMBINED CY 2009 MEDICARE PHYSICIAN FEE SCHEDULE TOTAL ALLOWED CHARGE IMPACT—Continued
Specialty
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
Impact of
work and
PE RVU
changes*
(percent)
Allowed
charges
(mil)
AUDIOLOGIST ..........................................................................................................
CHIROPRACTOR ......................................................................................................
CLINICAL PSYCHOLOGIST .....................................................................................
CLINICAL SOCIAL WORKER ...................................................................................
NURSE ANESTHETIST ............................................................................................
NURSE PRACTITIONER ..........................................................................................
OPTOMETRY ............................................................................................................
ORAL/MAXILLOFACIAL SURGERY .........................................................................
PHYSICAL/OCCUPATIONAL THERAPY .................................................................
PHYSICIAN ASSISTANT ..........................................................................................
PODIATRY ................................................................................................................
DIAGNOSTIC TESTING FACILITY ...........................................................................
INDEPENDENT LABORATORY ...............................................................................
PORTABLE X¥RAY SUPPLIER ..............................................................................
28
620
456
301
670
781
719
31
1,458
580
1,433
1,029
754
51
2009 Update (Cur.
Law)**
(percent)
¥10
¥1
¥2
¥2
0
0
0
1
1
0
2
¥1
5
2
Combined
impact with
CY 2009
update***
(percent)
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥5
¥16
¥6
¥7
¥7
¥6
¥5
¥6
¥4
¥4
¥5
¥4
¥6
0
¥3
*PE changes are CY 2009 third year transition changes. For fully implemented CY 2010 PE changes see Table 27.
**Under current law, the payment rates will decrease by ¥10.6 on July 1, 2008, in addition to the ¥5.4 CY 2009 update.
***Components may not sum to total due to rounding. Impacts as of May 20, 2008.
Table 29 shows the estimated impact
on total payments for selected highvolume procedures of all of the changes
discussed previously. We selected these
procedures because they are the most
commonly provided by a broad
spectrum of physician specialties. There
are separate columns that show the
change in the facility rates and the
nonfacility rates. For an explanation of
facility and nonfacility PE refer to
Addendum A of this proposed rule.
TABLE 29.—IMPACT OF PROPOSED RULE AND ESTIMATED PHYSICIAN UPDATE ON PROPOSED 2009 PAYMENT FOR
SELECTED PROCEDURES
Facility
CPT 1/HCPCS
MOD
Description
2008 2
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
........
........
........
........
........
........
........
........
66821 .....................
........
66984 .....................
........
67210 .....................
........
71010 .....................
71010 .....................
77056 .....................
........
26
........
77056 .....................
26
77057 .....................
77057 .....................
77427 .....................
........
26
........
78465 .....................
88305 .....................
sroberts on PROD1PC70 with PROPOSALS
11721
17000
27130
27244
27447
33533
35301
43239
26
26
90801 .....................
90862 .....................
90935 .....................
........
........
........
92012 .....................
92014 .....................
92980 .....................
........
........
........
VerDate Aug<31>2005
18:46 Jul 03, 2008
Debride nail, 6 or more ...
Destruct premalg lesion ..
Total hip arthroplasty ......
Treat thigh fracture ..........
Total knee arthroplasty ...
CABG, arterial, single .....
Rechanneling of artery ....
Upper GI endoscopy, biopsy.
After cataract laser surgery.
Cataract surg w/iol, 1
stage.
Treatment of retinal lesion.
Chest x-ray ......................
Chest x-ray ......................
Mammogram, both
breasts.
Mammogram, both
breasts.
Mammogram, screening
Mammogram, screening
Radiation tx management, x5.
Heart image (3d), multiple
Tissue exam by pathologist.
Psy dx interview ..............
Medication management
Hemodialysis, one evaluation.
Eye exam established pat
Eye exam & treatment ....
Insert intracoronary stent
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Nonfacility
Proposed 3
2009
Percent
change
Proposed 3
2009
2008 2
Percent
change
$24.53
41.56
1,195.11
963.45
1,283.69
1,659.12
934.83
140.36
$22.88
40.93
1,118.97
898.53
1,198.90
1,537.94
870.17
136.33
¥7
¥2
¥6
¥7
¥7
¥7
¥7
¥3
$35.43
60.30
NA
NA
NA
NA
NA
294.35
$34.48
60.59
NA
NA
NA
NA
NA
282.00
¥3
0
NA
NA
NA
NA
NA
¥4
223.15
210.45
¥6
238.14
223.99
¥6
560.08
525.00
¥6
NA
NA
NA
488.20
460.22
¥6
507.96
477.30
¥6
NA
7.84
NA
NA
7.41
NA
NA
¥5
NA
22.83
7.84
93.69
20.95
7.41
93.78
¥8
¥5
0
37.48
36.10
¥4
37.48
36.10
¥4
NA
30.32
158.42
NA
29.01
151.47
NA
¥4
¥4
73.93
30.32
158.42
70.58
29.01
151.47
¥5
¥4
¥4
66.43
32.36
64.78
29.97
¥2
¥7
66.43
32.36
64.78
29.97
¥2
¥7
112.08
39.18
58.26
103.45
36.74
54.14
¥8
¥6
¥7
131.50
46.67
NA
126.98
46.09
NA
¥3
¥1
NA
38.50
59.28
721.22
36.74
56.40
699.36
¥5
¥5
¥3
62.69
90.96
NA
59.30
86.05
NA
¥5
¥5
NA
Fmt 4701
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E:\FR\FM\07JYP2.SGM
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38598
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TABLE 29.—IMPACT OF PROPOSED RULE AND ESTIMATED PHYSICIAN UPDATE ON PROPOSED 2009 PAYMENT FOR
SELECTED PROCEDURES—Continued
Facility
CPT 1/HCPCS
MOD
Description
2008 2
93000 .....................
........
93010
93015
93307
93510
98941
99203
.....................
.....................
.....................
.....................
.....................
.....................
........
........
26
26
........
........
99213 .....................
99214 .....................
99222 .....................
99223 .....................
99231 .....................
99232 .....................
99233 .....................
99236 .....................
99239 .....................
99243 .....................
99244 .....................
99253 .....................
99254 .....................
99283 .....................
99284 .....................
99291 .....................
99292 .....................
99348 .....................
99350 .....................
G0008 ....................
G0317 ....................
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
Electrocardiogram, complete.
Electrocardiogram report
Cardiovascular stress test
Echo exam of heart .........
Left heart catheterization
Chiropractic manipulation
Office/outpatient visit,
new.
Office/outpatient visit, est
Office/outpatient visit, est
Initial hospital care ..........
Initial hospital care ..........
Subsequent hospital care
Subsequent hospital care
Subsequent hospital care
Observ/hosp same date ..
Hospital discharge day ....
Office consultation ...........
Office consultation ...........
Inpatient consultation ......
Inpatient consultation ......
Emergency dept visit .......
Emergency dept visit .......
Critical care, first hour .....
Critical care, add’l 30 min
Home visit, est patient ....
Home visit, est patient ....
Admin influenza virus vac
ESRD related svs 4+mo
20+yrs.
Nonfacility
Proposed 3
2009
Percent
change
2008 2
Proposed 3
2009
Percent
change
20.78
18.37
¥12
20.78
18.37
¥12
7.50
93.01
42.24
215.65
25.55
58.60
7.41
89.27
40.93
204.97
24.17
55.11
¥1
¥4
¥3
¥5
¥5
¥6
7.50
93.01
42.24
215.65
29.64
81.42
7.41
89.27
40.93
204.97
27.72
77.03
¥1
¥4
¥3
¥5
¥6
¥5
37.48
58.60
104.59
153.65
31.68
56.55
81.08
179.20
83.13
83.13
130.14
97.09
140.02
52.81
97.44
182.61
91.64
NA
NA
NA
245.63
35.77
55.76
98.94
145.67
30.29
53.82
77.35
167.91
78.32
78.96
124.40
92.82
134.39
49.31
92.17
171.13
85.73
NA
NA
NA
227.21
¥5
¥5
¥5
¥5
¥4
¥5
¥5
¥6
¥6
¥5
¥4
¥4
¥4
¥7
¥5
¥6
¥6
NA
NA
NA
¥7
53.49
80.40
NA
NA
NA
NA
NA
NA
NA
109.36
160.12
NA
NA
NA
NA
224.51
100.16
68.14
139.34
18.40
245.63
51.24
77.03
NA
NA
NA
NA
NA
NA
NA
104.10
152.44
NA
NA
NA
NA
209.81
93.46
64.46
130.53
18.37
227.21
¥4
¥4
NA
NA
NA
NA
NA
NA
NA
¥5
¥5
NA
NA
NA
NA
¥7
¥7
¥5
¥6
0
¥7
1 CPT
codes and descriptions are copyright 2008 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
on CF of 34.0682 published in the CY 2008 PFS Final rule with comment period (72 FR 66222). Used for PFS payment for services
beginning July 1, 2008 through December 31, 2008.
3 Based upon proposed ¥5.4 percent reduction in Conversion Factor.
2 Based
sroberts on PROD1PC70 with PROPOSALS
B. Telehealth
In section II.D. of this proposed rule,
we are proposing to create HCPCS codes
specific to the telehealth delivery of
follow up inpatient consultations. The
new HCPCS codes will be limited to the
range of services included in the scope
of deleted CPT codes previously
approved for telehealth, with the
descriptions modified to limit the use of
such services for telehealth. Utilization
of these codes would allow us to
provide payment for follow-up inpatient
telehealth consultations, as well as
enable us to monitor whether the codes
are used appropriately.
The total annual Medicare payment
amount for telehealth services
(including the originating site facility
fee) is approximately $2 million.
Previous additions to the list of
Medicare telehealth services have not
resulted in a significant increase in
Medicare program expenditures. While
we believe that the addition of followup inpatient telehealth consultation
services to the approved telehealth
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18:46 Jul 03, 2008
Jkt 214001
service list will enable more
beneficiaries to access to these services,
we do not anticipate that this proposed
change will have a significant budgetary
impact on the Medicare program.
C. Payment for Covered Outpatient
Drugs and Biologicals
1. ASP Issues
The proposed changes discussed in
section II.F.1. of this proposed rule with
respect to payment for covered
outpatient drugs and biologicals, are
estimated to have no impact on
Medicare expenditures.
2. CAP Issues
This proposed rule contains proposals
and seeks comment on certain aspects of
the CAP, specifically the annual CAP
payment amount update mechanism,
the definition of a CAP physician,
easing the restriction on physician
transport of CAP drugs between practice
locations, and the dispute resolution
process. Several of these minor
refinements may improve compliance,
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Fmt 4701
Sfmt 4702
promote program flexibility, improve
the quality and potentially the number
of services for participating CAP
physicians, and increase available
choices for participating CAP
physicians. We anticipate that these
changes associated with the CAP will
not result in significant additional cost
savings or increases relative to the ASP
payment system.
D. Application of the HPSA Bonus
Payment
As discussed in section II.G. of this
proposed rule, there are no program cost
savings or increased expenditures
associated with this change; however,
we expect that the regulation will
increase the number of physicians who
receive the bonus automatically, while
decreasing the number of physicians
required to use modifier in order to
receive the payment. It will also provide
assurance to physicians and eligible
recipients, for example health care
facilities that bill under the CAH II
method, in qualified areas that they will
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receive the HPSA bonus payment
throughout the calendar year.
F. Provisions Related to Payment for
Renal Dialysis Services Furnished by
End-Stage Renal Disease (ESRD)
Facilities
The ESRD-related provisions in this
proposed rule are discussed in section
II.H. of this proposed rule. To
understand the impact of the proposed
changes affecting payments to different
categories of ESRD facilities, it is
necessary to compare estimated
payments under the current year (CY
2008 payments) to estimated payments
under the revisions to the composite
rate payment system (CY 2009
payments) as discussed in section II.H.
of this proposed rule. To estimate the
impact among various classes of ESRD
facilities, it is imperative that the
estimates of current payments and
proposed payments contain similar
inputs. Therefore, we simulated
payments only for those ESRD facilities
that we are able to calculate both
current 2008 payments and proposed
2009 payments.
ESRD providers were grouped into the
categories based on characteristics
provided in the Online Survey and
Certification and Reporting (OSCAR)
file and the most recent cost report data
from the Healthcare Cost Report
Information System (HCRIS). We also
used the December 2007 update of CY
2007 National Claims History file as a
basis for Medicare dialysis treatments
and separately billable drugs and
biologicals. While the December 2007
update of the 2007 claims is not
complete, we wanted to use the most
recent data available, and plan to use an
updated version of the 2007 claims file
for the final rule. Due to data
limitations, we are unable to estimate
current and proposed payments for 80
of the 4866 ESRD facilities that bill for
ESRD dialysis treatments.
Table 30 shows the impact of this
year’s proposed changes to CY 2009
payments to hospital-based and
independent ESRD facilities. The first
column of Table 30 identifies the type
of ESRD provider, the second column
indicates the number of ESRD facilities
for each type, and the third column
indicates the number of dialysis
treatments.
The fourth column shows the effect of
the proposed change to the wage index
floor as it affects the composite rate
payments to ESRD facilities for CY
2009. The fourth column compares
aggregate ESRD wage adjusted
composite rate payments in the fourth
year of the transition (CY 2009) using
the CY 2009 wage index with a 0.75
floor compared to aggregate ESRD wage
adjusted composite rate payments in the
fourth year of the transition (CY 2009)
using the CY 2009 wage index with a
0.70 floor. Note that the fourth column
only includes the effect of the proposed
change to the wage index floor and does
not include the effects of other wage
index changes, such as, moving from the
third to fourth year of the transition and
updated wage index values from CY
2008 to CY 2009.
The fifth column shows the effect of
all proposed changes to the ESRD wage
index for CY 2009 as it affects the
composite rate payments to ESRD
facilities. It is inclusive of the changes
in the fourth column. The fifth column
compares aggregate ESRD wage adjusted
composite rate payments in the fourth
year of the transition (CY 2009) to
aggregate ESRD wage adjusted
composite rate payments in the third
year of the transition (CY 2008). In the
fourth year of the transition (CY 2009),
ESRD facilities receive 100 percent of
the CBSA wage adjusted composite rate
and 0 percent of the MSA wage adjusted
composite rate. In the third year of the
transition, ESRD facilities receive 75
percent of the CBSA wage adjusted
composite rate and 25 percent of the
MSA wage adjusted composite rate. The
overall effect to all ESRD providers in
aggregate is zero because the proposed
CY 2009 ESRD wage index has been
multiplied by a BN adjustment factor to
comply with the statutory requirement
that any wage index revisions be done
in a manner that results in the same
aggregate amount of expenditures as
would have been made without any
changes in the wage index.
The sixth column shows the overall
effect of the proposed changes in
composite rate payments to ESRD
providers. The overall effect is
measured as the difference between the
proposed CY 2009 payment with all
changes as proposed in this rule and
current CY 2008 payment. This payment
amount is computed by multiplying the
wage adjusted composite rate with the
drug add-on for each provider times the
number of dialysis treatments from the
CY 2007 claims. The CY 2009 proposed
payment is the transition year 4 wageadjusted composite rate for each
provider (with the 15.5 percent drug
add-on) times dialysis treatments from
CY 2007 claims. The CY 2008 current
payment is the transition year 3 wageadjusted composite rate for each
provider (with the current 15.5 percent
drug add-on) times dialysis treatments
from CY 2007 claims.
The overall impact to ESRD providers
in aggregate is 0.0 percent. This zero
update corresponds to the proposed 0.0
percent update to the drug add-on. The
variation shown in column 6 is due to
variation in changes in the wage index
(column 5). All provider types receive
the same 0.0 percent increase to the
drug add-on.
TABLE 30.—IMPACT OF CY 2009 PROPOSED CHANGES IN PAYMENTS TO HOSPITAL-BASED AND INDEPENDENT ESRD
FACILITIES
[Percent change in composite rate payments to ESRD facilities (both program and beneficiaries)]
sroberts on PROD1PC70 with PROPOSALS
Number of
facilities
All Providers ...................................................................................
Independent ............................................................................
Hospital Based ........................................................................
By Facility Size:
Less than 5000 treatments .....................................................
5000 to 9999 treatments ........................................................
Greater than 9999 treatments ................................................
Type of Ownership:
Profit ........................................................................................
Nonprofit .................................................................................
By Geographic Location:
Rural .......................................................................................
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Number of
dialysis
treatments
(in millions)
Effect of
changes in
floor only 1
Effect of
changes in
wage index 2
Overall
effect 3
4,786
4,231
555
32.7
29.4
3.2
0.0
0.0
0.0
0.0
0.0
0.3
0.0
0.0
0.3
1,941
1,905
940
5.7
13.7
13.2
0.0
0.0
0.0
¥0.1
0.0
0.0
¥0.1
0.0
0.0
3,860
926
26.8
5.9
0.0
0.0
¥0.1
0.2
¥0.1
0.2
1,298
6.8
0.0
¥0.4
¥0.4
Sfmt 4702
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TABLE 30.—IMPACT OF CY 2009 PROPOSED CHANGES IN PAYMENTS TO HOSPITAL-BASED AND INDEPENDENT ESRD
FACILITIES—Continued
[Percent change in composite rate payments to ESRD facilities (both program and beneficiaries)]
Number of
facilities
Urban ......................................................................................
By Region:
New England ..........................................................................
Middle Atlantic ........................................................................
East North Central ..................................................................
West North Central .................................................................
South Atlantic ..........................................................................
East South Central .................................................................
West South Central ................................................................
Mountain .................................................................................
Pacific .....................................................................................
Puerto Rico .............................................................................
Number of
dialysis
treatments
(in millions)
Effect of
changes in
floor only 1
Effect of
changes in
wage index 2
Overall
effect 3
3,488
25.8
0.0
0.1
0.1
153
556
756
362
1090
375
664
255
541
34
1.1
4.1
5.2
1.8
7.5
2.5
4.7
1.5
4.1
0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
¥3.1
1.2
0.1
¥1.0
0.0
¥0.1
¥1.0
¥0.5
0.0
2.1
¥4.6
1.2
0.1
¥1.0
0.0
¥0.1
¥1.0
¥0.5
0.0
2.1
¥4.6
sroberts on PROD1PC70 with PROPOSALS
1 This column only shows the effect of the proposed wage index floor changes on ESRD providers for CY2009. Composite rate payments computed using the CY2009 wage index with a 0.75 floor are compared to composite rate payments using the CY2009 wage index with a 0.70 floor.
2 This column shows the overall effect of wage index changes on ESRD providers. Composite rate payments computed using the current wage
index are compared to composite rate payments using the CY2009 wage index changes.
3 This column shows the percent change between CY2009 and CY2008 composite rate payments to ESRD facilities. The CY2009 payments
include the CY2009 wage adjusted composite rate, and the 15.5 percent drug add-on times treatments. The CY2008 payments to ESRD facilities
includes the CY2008 wage adjusted composite rate and the 15.5 percent drug add-on times treatments.
G. IDTF Issues
We believe that our proposals
regarding IDTFs as discussed in Section
II.I. of this proposed rule would have
minimal budgetary impact. However,
we believe that these changes are
necessary to ensure that only IDTFs
enrolled in the Medicare program are
billing for the services provided and
that the services are provided by
properly qualified individuals.
Additionally, the provisions in this rule
would require physicians, NPPs, and
physician or NPP groups to enroll as an
IDTF when they are performing
diagnostic testing procedures. This
requirement would help ensure that
properly qualified individuals are
performing these diagnostic testing
procedures. Also, we believe that the
proposed IDTF provisions contained in
this rule will help ensure that
beneficiaries receive quality care
regardless of the setting in which they
are provided. We are unable to
determine the extent that IDTFS and
physicians, NPPs, and physician or NPP
groups currently providing diagnostic
testing procedures will be unable to
meet these requirements and therefore
have their billing privileges revoked or
be denied enrollment into the Medicare
program. However, we do not believe
that beneficiary access to these services
will be affected.
H. Physician and Nonphysician
Practitioner Enrollment Issues
We believe that our proposals
regarding physicians, NPPs, and
physician and nonphysician groups as
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discussed in section II.J. of this
proposed rule would have minimal
budgetary impact.
As a result of currently not having
quantifiable data, we cannot effectively
derive an estimate of the monetary
impacts of these provisions.
Accordingly, we are seeking public
comment so that the public may provide
any data available that provides a
calculable impact or any alternative to
the proposed provisions.
I. Proposed Amendment to the
Exemption for Computer-Generated
Facsimile Transmissions From the
NCPDP SCRIPT Standard for
Transmitting Prescription and Certain
Prescription-Related Information for
Part D-Covered Drugs Prescribed to Part
D Eligible Individuals
The amendment to the exemption for
computer-generated facsimiles from the
NCPDP SCRIPT Standard under the
Medicare Part D e-prescribing
provisions is discussed in section II.K.
of this rule. E-prescribing Part D covered
drugs to Part D eligible individuals is
voluntary for providers and dispensers.
The MMA only requires that if
prescribers and dispensers choose to
e-prescribe, that they use the standards
adopted by the Secretary for those
specific e-prescribing transactions. The
proposed amendment to the exemption
for computer-generated faxing from the
NCPDP SCRIPT standard only affects
pharmacies that already conduct
e-prescribing using products that
generate facsimiles.
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This proposed amendment of the
exemption for computer-generated
facsimiles to include prescription refill
requests sent from dispensers to
providers who do not possess the
capability to conduct electronic refill
request transactions using the NCPDP
SCRIPT standard will not affect nonNCPDP SCRIPT enabled prescribers.
Prescribers that currently e-prescribe
using NCPDP SCRIPT would continue
to receive refill requests electronically.
Prescribers that currently e-prescribe
with computer-generated faxes using a
system that can utilize the NCPDP
SCRIPT standard will simply turn that
function on, and receive refill request
transactions using the NCPDP SCRIPT
standard in place of the computergenerated facsimiles that they used to
receive. Prescribers that do not have the
capacity to use NCPDP SCRIPT standard
would continue to receive computergenerated facsimiles. Moreover, the
proposed amendment would not impose
costs on dispensers, as they would be
permitted to continue using computergenerated facsimiles with partners that
cannot conduct electronic refill request
transactions using the NCPDP SCRIPT
standard. The proposed amendment
will have direct benefits for dispensers.
One national drug store chain estimated
that its stores generate 150,000 non-EDI
prescription refill requests each day. If
the computer-generated facsimile
exemption were not modified as
proposed here these dispensers would
have to revert to paper/phone calls in
instances in which a provider is not able
to accept electronic refill requests
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utilizing the NCPDP SCRIPT standard.
One chain pharmacy has relayed that
moving forward with the scheduled
elimination of the computer-generated
faxing exception to the NCPDP SCRIPT
standard in all instances other than
transmission failures and similar
communication problems of temporary
or transient nature would result in
approximately 105,000 initial paper
facsimiles and 45,000 initial phone
calls/oral scripts per day. They also
consider a 2 percent facsimile failure
rate that translates into phone calls, or
approximately 2,100 additional phone
calls per day. Ten percent of all phone
calls require a second call back, or 4,710
call backs per day. Therefore, without
further modification of computergenerated facsimiles exception, as of
January 1, 2009 this national drug store
chain would have to make a total of
51,810 additional phone calls for
prescription refill requests per day.
They estimate the cost of reverting to
paper facsimiles, including purchasing
fax machines, labor, paper, printing,
hardware and service costs at over $12.5
million a year. They also estimate the
cost per year of phone calls, including
an average of 4 minutes per call, labor
and telecommunication costs, at more
than $78 million per year, for a total
cost for faxes and phone calls of $88.8
million per year.2
Another national drug store chain
offered a similar analysis. They
estimated that a prescription refill
request undertaken by telephone takes
1.43 minutes longer to complete than
one initiated by computer-generated
facsimile. Without further modification
of the computer-generated facsimile
exception, as of January 1, 2009 this
national drug store chain would have to
replace the more than 123 million
computer-generated facsimile refill
requests that are made each year with
phone calls or paper faxes. They
estimate that this would result in 9.2
lost hours of staff time per store per
week, resulting in $88 million in
additional costs, based on a blended
payroll rate of pharmacists and staff.
Extrapolating this cost across the entire
pharmacy industry based on this
commenter’s market share, they
estimated an impending pharmacy
industry loss of at least $520 million
unless the computer-generated facsimile
exception is further modified.3
2 CVS/Caremark Discussion Points on E-Fax
Ruling Exceptions, January 3, 2007.
3 December 22, 2007 correspondence from
Walgreen’s to CMS re: CMS–1385–FC, Final Rule
with Comment Period: Amendment of the EPrescribing Exemption for Computer-Generated
Facsimile Transmissions.
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According to industry reports in 2006
approximately 3.309 billion
prescriptions 4 were filled by retail
dispensers, and according to CMS data,
in 2006, approximately 825,000,000 Part
D claims (prescription drug events) were
finalized and accepted for payment,5 or
approximately 25 percent of the total
prescriptions filled that year. Thus,
$130 million of the $520 million total
loss estimated above would be
attributable to Medicare Part D claims.
We invite comments on these savings
and loss assumptions estimates and
assumptions.
We also assume that expanding the
computer-generated facsimile exception
to allow for computer-generated faxing
in instances in which the provider is
incapable of receiving electronic refill
request transactions using the NCPDP
SCRIPT standard would result in
improved patient satisfaction through
timely prescription refill request
authorizations from prescribers, and
maintenance of existing workflows at
both the prescriber and dispenser ends.
J. CORF Issues
The revisions to the CORF regulations
discussed in section II.L. of this
proposed rule update the regulations for
consistency with the PFS payment rules
and make additional changes to the
conditions of participation to reflect
industry standards. These revisions will
help to clarify payment and operational
requirements for CORF services and are
expected to have minimal impact on
Medicare expenditures.
K. Therapy Issues
The revisions to the therapy
regulations discussed in section II.M. of
this proposed rule make technical
corrections and update the regulations
and are expected to have minimal
impact on Medicare expenditures.
L. Physician Self-Referral Provisions
1. Incentive Payment and Shared
Savings Programs
Our proposal in section II.N. of this
proposed rule would provide an
exception to the physician self-referral
statute to permit incentive payments
between physicians and entities
furnishing designated health services
(DHS), provided that certain conditions
are satisfied. We are not proposing to
implement new incentive payment and
shared savings programs, but merely are
proposing an exception in § 411.357(x)
that would allow for remuneration
provided by a hospital to a physician or
4 https://www.statehealthfacts.org.
5 CMS, November 16, 2007 Proposed Rule, 72 FR
64913.
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38601
to a qualified physician organization
under an incentive payment or shared
savings program that satisfies certain
conditions. We believe that this
exception would remove a barrier to
participation in certain incentive
payment and shared savings programs
that may exist currently. We recognize
the potential for an indirect,
unquantifiable increase in the number
of incentive payment and shared
savings programs that, as a result of this
exception, will be permitted to function
as originally intended. However,
because the purpose of incentive
payment and shared savings programs is
to increase quality while decreasing
cost, we do not believe that our proposal
would have a budgetary impact.
2. Anti-Markup Provisions
We anticipate that our proposal in
section II.N. of this proposed rule
concerning the anti-markup provisions
in § 414.50 would result in savings to
the program by reducing overutilization
and anti-competitive business
arrangements. We cannot gauge with
any certainty the extent of these savings
to the Medicare program.
M. Physician Quality Reporting
Initiative
As discussed section II.O. of this
proposed rule, the proposed 2009 PQRI
measures satisfy the requirement of
section 1848(k)(2)(B)(ii) of the Act that
the Secretary publish in the Federal
Register by August 15, 2008 a proposed
set of measures that the Secretary
determines would be appropriate for
eligible professionals to use to submit
data to the Secretary in 2009. As
discussed in section II.O. of this
proposed rule, we are also offering
options in 2009 for reporting some of
the 2009 PQRI measures via submission
of data to a clinical registry, options for
reporting some of the 2009 PQRI
measures via EHR-based submission,
and options for reporting on measures
groups rather than individual measures.
Although there may be some cost
incurred for maintaining the measures
and their associated code sets, and for
expanding an existing clinical data
warehouse to accommodate registrybased data submission, we do not
anticipate a significant cost impact on
the Medicare program.
N. Educational Requirements for Nurse
Practitioners and Clinical Nurse
Specialists
We anticipate that there are no
program cost savings or increased
expenditures associated with the
proposed changes discussed in section
II.Q. of this proposed rule. However, we
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expect that the technical correction to
the NP qualifications will make the
regulations comport with the agency’s
intent to require a master’s degree in
nursing as the minimum educational
level for new practitioners
independently treating beneficiaries and
directly billing the Medicare program.
Also, the proposed changes to the NP
and CNS educational requirement to
include the DNP doctoral degree will
help to eliminate any concern or
confusion for contractors and the
nursing industry about whether APNs
with doctoral degrees in nursing (but
without a master’s degree in nursing)
meet our program qualifications.
O. Portable X-Ray Personnel
Qualifications
We anticipate that there are no
program cost savings or increased
expenditures associated with the
proposed changes discussed in section
II.R. of this proposed rule; however, we
expect that the revisions to the
regulations will have a positive impact
on patient care.
P. Prohibition Concerning Providers of
Sleep Tests
The proposal contained in section
II.T.2 of this proposed rule will reduce
Medicare Trust Fund vulnerability to
fraud and abuse and protect Medicare
Beneficiaries from the burden of
unnecessary sleep testing and
unnecessary exposure to a medical
device. This prohibition will have no
effect on most providers as most
providers are not DMEPOS suppliers
who would be supplying CPAP devices.
Only providers or other entities that
perform both sleep testing and supply
CPAP machines to beneficiaries they
have tested will be impacted.
Q. Beneficiary Signature Requirements
for Nonemergency Ambulance Services
sroberts on PROD1PC70 with PROPOSALS
We believe that our proposal in
section II.T.3. of this proposed rule for
allowing the ambulance provider or
supplier to sign the claim on behalf of
the beneficiary with respect to
nonemergency transport services,
provided that certain conditions are
satisfied, would have no budgetary
impact.
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R. Revision to the ‘‘Appeals of CMS or
CMS Contractor Determinations When a
Provider or Supplier Fails to Meet the
Requirements for Medicare Billing
Privileges’’ Final Rule
We expect that the proposal in section
II.T.5. of this proposed rule will have an
impact on an unknown number of
persons and entities; however, we
believe that this provision will impact
only a small number of providers and
suppliers whose billing privileges are
revoked due to felony convictions,
license suspensions or revocation, or
because the provider or supplier is no
longer operating at a practice location
provided to Medicare. We also believe
that while this provision changes the
effective date of revocation for certain
providers and supplier that are no
longer in compliance with Medicare
enrollment requirements, this provision
does not expand or change our
revocation authority.
As a result of not having quantifiable
data for the providers and suppliers that
meet the proposed criteria for
immediate revocation, we cannot
effectively derive an estimate of the
monetary impacts of this provision.
Accordingly, we are seeking public
comment so that the public may provide
any data available that provides a
calculable impact or any alternative to
the proposed provision.
S. Alternatives Considered
This proposed rule contains a range of
policies, including some provisions
related to specific MMA provisions. The
preamble provides descriptions of the
statutory provisions that are addressed,
identifies those policies when discretion
has been exercised, presents rationale
for our decisions and, where relevant,
alternatives that were considered.
T. Impact on Beneficiaries
There are a number of changes made
in this proposed rule that would have
an effect on beneficiaries. In general, we
believe these changes, including the
refinements of the PQRI with its focus
on measuring, submitting, and
analyzing quality data, the
modifications to personnel
qualifications and the application of
certain IDTF standards to physician and
NPPs office practices will have a
positive impact and improve the quality
and value of care provided to Medicare
beneficiaries.
We do not believe that beneficiaries
will experience drug access issues as a
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Frm 00102
Fmt 4701
Sfmt 4702
result of the proposed changes with
respect to Part B drugs and CAP and
discontinuation of payment for
preadministration services associated
with IVIG.
As explained in more detail
subsequently in this section, the
regulatory provisions may affect
beneficiary liability in some cases. Most
changes in aggregate beneficiary liability
from a particular provision would be a
function of the coinsurance (20 percent
if applicable for the particular provision
after the beneficiary has met the
deductible) and the effect of the
aggregate cost (savings) of the provision
on the standard calculation of the
Medicare Part B premium rate (generally
25 percent of the provision’s cost or
savings). In 2009, total cost sharing
(coinsurance and deductible) per Part B
enrollee associated with physician fee
schedule services is estimated to be
$558. In addition, the portion of the
2009 standard monthly Part B premium
attributable to PFS services is estimated
to be $32.50.
To illustrate this point, as shown in
Table 26, the 2008 national payment
amount in the nonfacility setting for
CPT code 99203 (Office/outpatient visit,
new), is $81.42 which means that
currently (July 1 through December 31)
a beneficiary is responsible for 20
percent of this amount, or 16.28. Based
on this proposed rule, the 2009 national
payment amount in the nonfacility
setting for CPT code 99203, as shown in
Table 29, is $77.03 which means that, in
2009, the beneficiary coinsurance for
this service would be $15.41.
Proposed policies discussed in this
rule that do affect overall spending,
such as the proposed additions to the
list of codes that are subject to the
multiple procedure payment reduction
for diagnostic imaging, would similarly
impact beneficiaries’ coinsurance.
U. Accounting Statement
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars/
a004/a-4.pdf), in Table 31, we have
prepared an accounting statement
showing the classification of the
expenditures associated with this
proposed rule. This estimate includes
the incurred benefit impact associated
with the estimated CY 2009 PFS update,
shown in this proposed rule, based on
the 2008 Trustees Report baseline. All
estimated impacts are classified as
transfers.
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TABLE 31.—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES FROM CY 2008 TO CY 2009
[In billions]
Category
Transfers
Annualized Monetized Transfers .......................................
From Whom To Whom? ....................................................
Estimated decrease in expenditures of $5.9 billion.
Federal Government to physicians, other practitioners and suppliers who receive
payment under the Medicare Physician Fee Schedule; ESRD Medicare Providers;
and Medicare suppliers billing for Part B drugs and for Medicare Part D.
In accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
List of Subjects
42 CFR Part 405
Administrative practice and
procedure, Health facilities, Health
professions, Kidney diseases, Medical
devices, Medicare, Reporting and
recordkeeping requirements, Rural
areas, X-rays.
42 CFR Part 409
Health facilities, Medicare.
42 CFR Part 410
Health facilities, Health professions,
Kidney diseases, Laboratories,
Medicare, Reporting and recordkeeping
requirements, Rural areas, X-rays.
42 CFR Part 411
Kidney diseases, Medicare, Physician
referral, Reporting and recordkeeping
requirements.
42 CFR Part 414
Administrative practice and
procedure, Health facilities, Health
professions, Kidney diseases, Medicare,
Reporting and recordkeeping
requirements.
42 CFR Part 415
Health facilities, Health professions,
Medicare, Reporting and recordkeeping
requirements.
42 CFR Part 424
Emergency medical services, Health
facilities, Health professions, Medicare,
Reporting and recordkeeping
requirements.
sroberts on PROD1PC70 with PROPOSALS
42 CFR Part 485
Grant programs—health, Health
facilities, Medicaid, Medicare,
Reporting and recordkeeping
requirements.
42 CFR Part 486
Grant programs—health, Health
facilities, Medicare, Reporting and
recordkeeping requirements, X-rays.
For the reasons set forth in the
preamble, the Centers for Medicare &
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Medicaid Services proposes to amend
42 CFR chapter IV as set forth below:
PART 405—FEDERAL HEALTH
INSURANCE FOR THE AGED AND
DISABLED
1. The authority citation for part 405
continues to read as follows:
Authority: Secs. 1102, 1861, 1862(a), 1871,
1874, 1881, and 1886(k) of the Social
Security Act (42 U.S.C. 1302, 1395x,
1395y(a), 1395hh, 1395kk, 1395rr and
1395ww(k)), and sec. 353 of the Public
Health Service Act (42 U.S.C. 263a).
Subpart H—Appeals Under the
Medicare Part B Program
2. Section 405.874, as amended on
June 27, 2008 (73 FR 36448) is amended
by revising paragraph (b)(2) to read as
follows:
§ 405.874 Appeals of CMS or a CMS
contractor.
*
*
*
*
*
(b) * * *
(2) Effective date of revocation. The
revocation of a provider’s or supplier’s
billing privileges is effective 30 days
after CMS or the CMS contractor mails
notice of its determination to the
provider or supplier, except if the
revocation is based on a Federal
exclusion or debarment, felony
conviction, license suspension or
revocation, or the practice location is
determined by CMS or its contractor not
to be operational. When a revocation is
based on a Federal exclusion or
debarment, felony conviction, license
suspension or revocation, or the practice
location is determined by CMS or its
contractor not to be operational, the
revocation is effective with the date of
exclusion or debarment, felony
conviction, license suspension or
revocation or the date that CMS or its
contractor determined that the provider
or supplier was no longer operational.
*
*
*
*
*
PART 409—HOSPITAL INSURANCE
BENEFITS
3. The authority citation for part 409
continues to read as follows:
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Sfmt 4702
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
Subpart B—Inpatient Hospital Services
and Inpatient Critical Access Hospital
Services
4. Section 409.17 is amended by
revising paragraph (a)(1) to read as
follows:
§ 409.17 Physical therapy, occupational
therapy, and speech-language pathology
services.
(a) * * *
(1) Except as specified in this section,
physical therapy, occupational therapy,
or speech-language pathology services
must be furnished by qualified physical
therapists, physical therapist assistants,
occupational therapists, occupational
therapy assistants, or speech-language
pathologists who meet the requirements
specified in part 484 of this chapter.
*
*
*
*
*
Subpart C—Posthospital SNF Care
5. Section 409.23 is amended by
revising the section heading to read as
follows:
§ 409.23 Physical therapy, occupational
therapy and speech-language pathology.
*
*
*
*
*
PART 410—SUPPLEMENTARY
MEDICAL INSURANCE (SMI)
BENEFITS
6. The authority citation for part 410
continues to read as follows:
Authority: Secs. 1102, 1834, 1871, and
1893 of the Social Security Act (42 U.S.C.
1302, 1395m, 1395hh, and 1395ddd).
Subpart B—Medical and Other Health
Services
7. Section 410.33 is amended by
adding paragraphs (a)(3), (g)(16), and (j)
to read as follows:
§ 410.33
facility.
Independent diagnostic testing
(a) * * *
(3) Advanced diagnostic testing
procedures. Advanced diagnostic testing
procedures include diagnostic magnetic
resonance imaging, computed
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tomography, nuclear medicine
(including positron emission
tomography), and other such diagnostic
testing procedures described in section
1848(b)(4)(B) of the Act (excluding Xray, ultrasound, and fluoroscopy).
*
*
*
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*
(g) * * *
(16) Enrolls and bills Medicare for all
mobile diagnostic services that it
furnishes, regardless of whether the
services are furnished in a mobile or
fixed base location, including a
physician office or fixed-based IDTF.
*
*
*
*
*
(j) A physician or nonphysician
practitioner organization (as defined in
§ 424.502) furnishing diagnostic testing
services, except diagnostic
mammography services:
(1) Must enroll as an IDTF for each
practice location furnishing these
services; and
(2) Is subject to the provisions in
§ 410.33, except for § 410.33(g)(6),
§ 410.33(g)(8), § 410.33(g)(9),
§ 410.33(g)(14)(ii), and § 410.33(g)(15)(i).
8. Section 410.75 is amended by
revising paragraph (b) to read as follows:
§ 410.75
Nurse practitioners’ services.
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(b) Qualifications. For Medicare Part
B coverage of his or her services, a nurse
practitioner must be a registered
professional nurse who is authorized by
the State in which the services are
furnished to practice as a nurse
practitioner in accordance with State
law, and must meet one of the
following—
(1) Obtained Medicare billing
privileges as a nurse practitioner for the
first time on or after January 1, 2003 and
meets the following requirements:
(i) Be certified as a nurse practitioner
by a recognized national certifying body
that has established standards for nurse
practitioners.
(ii) Possess a master’s degree in
nursing or a Doctor of Nursing Practice
(DNP) doctoral degree.
(2) Obtained Medicare billing
privileges as a nurse practitioner for the
first time before January 1, 2003, and
meets the standards in paragraph
(b)(1)(i) of this section.
(3) Obtained Medicare billing
privileges as a nurse practitioner for the
first time before January 1, 2001.
*
*
*
*
*
9. Section 410.76 is amended by
revising paragraph (b)(2) to read as
follows:
§ 410.76 Clinical nurse specialists’
services.
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(b) * * *
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(2) Have a master’s degree in a
defined clinical area of nursing from an
accredited educational institution or a
Doctor of Nursing Practice (DNP)
doctoral degree; and
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10. Section 410.78 is amended by
revising the introductory text of
paragraph (b) to read as follows:
§ 410.78
Telehealth services.
*
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*
(b) General rule. Medicare Part B pays
for office and other outpatient visits,
professional consultation, psychiatric
diagnostic interview examination,
individual psychotherapy,
pharmacologic management, end-stage
renal disease-related services included
in the monthly capitation payment
(except for one visit per month to
examine the access site), individual
medical nutrition therapy, the
neurobehavioral status exam, and
follow-up telehealth consultations
furnished by an interactive
telecommunications system if the
following conditions are met:
*
*
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*
*
Subpart D—Comprehensive Outpatient
Rehabilitation Facility (CORF) Services
11. Section 410.100 is amended by
revising paragraphs (e)(1) and (h) to read
as follows:
§ 410.100
Included services.
*
*
*
*
*
(e) * * *
(1) Respiratory therapy services are
services provided by a respiratory
therapist for the assessment, treatment,
and monitoring of patients with
deficiencies or abnormalities of
cardiopulmonary function.
*
*
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*
(h) Social and psychological services.
Social and psychological services
include the assessment of an
individual’s mental and emotional
functioning, and the individual’s
response and rate of progress as they
relate to the individual’s rehabilitation
plan of treatment, including physical
therapy services, occupational therapy
services, speech-language pathology
services and respiratory therapy
services.
*
*
*
*
*
Subpart I—Payment of SMI Benefits
12. Section 410.155 is amended by—
A. Revising paragraph (b)(1).
B. Adding paragraph (b)(2)(vi).
The revisions and additions are to
read as follows:
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§ 410.155 Outpatient mental health
treatment limitation.
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(b) Application of the limitation.
(1) Services subject to the limitation.
Except as specified in paragraph (b)(2)
of this section, the services furnished by
physicians and other practitioners,
whether furnished directly or as an
incident to those practitioners’ services
are subject to the limitation if they are
furnished in connection with the
treatment of a mental, psychoneurotic,
or personality disorder (that is, any
condition identified by a diagnosis code
within the range of 290 through 319)
and are furnished to an individual who
is not an inpatient of a hospital.
(2) * * *
(vi) CORF social and psychological
services (as defined at § 410.100(h) of
this subpart) furnished by a CORF.
*
*
*
*
*
PART 411—EXCLUSIONS FROM
MEDICARE AND LIMITATIONS ON
MEDICARE PAYMENT
13. The authority citation for part 411
continues to read as follows:
Authority: Secs. 1102, 1860D–1 through
1860D–42, 1871, and 1877 of the Social
Security Act (42 U.S.C. 1302, 1395w–101
through 1395w–152, 1395hh, and 1395nn).
Subpart J—Financial Relationships
Between Physicians and Entities
Furnishing Designated Health Services
14. Section 411.351 is amended by
adding the following definition in
alphabetical order:
§ 411.351
Definitions.
*
*
*
*
*
Qualified physician organization
means a physician organization
comprised entirely of physicians
participating in the same incentive
payment or shared savings program.
*
*
*
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*
15. Section 411.357 is revised by
adding paragraph (x) to read as follows:
§ 411.357 Exceptions to the referral
prohibition related to compensation
arrangements.
*
*
*
*
*
(x) Incentive Payment and Shared
Savings Programs. Remuneration in the
form of cash or cash equivalent
payments, but not including
nonmonetary remuneration, provided
by a hospital to a physician on the
hospital’s medical staff or to a qualified
physician organization (as defined at
§ 411.351) pursuant to an arrangement
between the hospital and the physician
or qualified physician organization, if
all of the following conditions are met:
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(1) The remuneration is provided as
part of a documented incentive payment
or shared savings program to achieve—
(i) The improvement of quality of
hospital patient care services through
changes in physician clinical or
administrative practices; or
(ii) Actual cost savings for the
hospital resulting from the reduction of
waste or changes in physician clinical
or administrative practices, without an
adverse effect on or diminution in the
quality of hospital patient care services.
(2) The incentive payment or shared
savings program identifies patient care
quality measures or cost saving
measures (for purposes of this
paragraph, collectively, ‘‘performance
measures’’) or both that—
(i) Use an objective methodology, are
verifiable, are supported by credible
medical evidence, and are individually
tracked;
(ii) Are reasonably related to the
hospital’s or comparable hospitals’
practices and patient population;
(iii) With respect to patient care
quality measures, are listed in CMS’
Specification Manual for National
Hospital Quality Measures; and
(iv) Are monitored throughout the
term of the arrangement to protect
against inappropriate reductions or
limitations in patient care services.
(3) The incentive payment or shared
savings program establishes—
(i) Baseline levels for the performance
measures using the hospital’s historical
and clinical data; and
(ii) Target levels for the performance
measures that are developed by
comparing historical data for the
hospital’s practices and patient
population to national or regional data
for comparable hospitals’ practices and
patient populations; and
(iii) Thresholds above or below which
no payments will accrue to physicians.
(4) At least five physicians participate
in each performance measure (the
‘‘participating physician pool’’).
Physicians participating in the incentive
payment or shared savings program
(‘‘participating physicians’’) must be on
the medical staff of the hospital at the
commencement of the program, and
may not be selected in a manner that
takes into account the volume or value
of referrals or other business generated
between the parties. A hospital may
elect to make an incentive payment or
shared savings program available to
physicians in a particular department or
specialty, provided that the hospital
offers the opportunity to participate in
the incentive payment or shared savings
program to all physicians in the
department or specialty on the same
terms and conditions.
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(5) The incentive payment or shared
savings program requires independent
medical review of the program’s impact
on the quality of patient care services
provided at the hospital and corrective
action if the independent medical
review indicates a diminution in the
quality of hospital patient care services.
The independent medical review must
be completed prior to the
commencement of the incentive
payment or shared savings program
(with respect to the program’s potential
impact on the quality of patient care
services provided at the hospital) and at
least annually thereafter. For purposes
of this paragraph, ‘‘independent medical
review,’’ means written review by an
individual or organization that is—
(i) Not affiliated with the hospital;
(ii) Not affiliated with any
participating physician or any physician
organization to which any participating
physician belongs; and
(iii) At the time of the review, not
participating in any incentive payment
or shared savings program at the
hospital.
(6) Under the incentive payment or
shared savings program—
(i) Physicians must have access to the
same selection of items, supplies or
devices as was available at the hospital
prior to the commencement of the
program, and must not be restricted in
their ability to make medically
appropriate decisions for their patients,
including, but not limited to, decisions
about tests, treatments, procedures,
services, supplies or discharge;
(ii) The hospital may not make a
payment to a participating physician or
a qualified physician organization for
the use of an item, supply or device if
the physician or qualified physician
organization has an ownership or
investment interest in, or a
compensation arrangement with, the
manufacturer, distributor or group
purchasing organization that arranges
for the purchase of the item, supply or
device; and
(iii) The hospital may not limit the
availability of new technology that—
(A) Is linked through objective
evidence to improved outcomes and is
clinically appropriate for a particular
patient; and
(B) Meets the same Federal regulatory
standards as technology available under
the incentive payment or shared savings
program (for example, approval by the
Food and Drug Administration and
Medicare or Medicaid coverage
decisions).
(7) The hospital provides effective
prior written notice to patients affected
by the incentive payment or shared
savings program that—
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(i) Identifies the physicians
participating in the program;
(ii) Discloses that participating
physicians receive payments for
meeting targets for performance
measures; and
(iii) Describes the performance
measures in a manner reasonably
designed to inform patients about the
program.
(8) The arrangement is set out in
writing, is signed by the parties, and
specifies the remuneration (or a formula
for the remuneration) in detail sufficient
to be independently verified, including
a comprehensive description of the
incentive payment or shared savings
program in which the physician is
participating, the applicable baseline
measures, and the targets for
performance measures to be achieved by
the participating physician. To satisfy
this requirement, each specific
performance measure and the resulting
payment (or a formula for the resulting
payment) to the participating physician
or qualified physician organization must
be clearly and separately identified.
(9) The performance measures
provided for under the arrangement do
not involve the counseling or promotion
of a business arrangement or other
activity that violates any Federal or
State law and, in the aggregate, are
reasonable and necessary for the
legitimate business purposes of the
arrangement.
(10) The term of the arrangement is
for no less than 1 year and no more than
3 years.
(11) Payments must take into account
previous payments made for
performance measures already achieved
to ensure that the participating
physician or qualified physician
organization does not receive payment
related to patient care quality
improvements or cost savings that were
achieved during a prior period of the
arrangement. No payment may be made
for the achievement of cost savings that
results in a diminution in hospital
patient care quality with respect to that
performance measure.
(12) Payments are limited in duration
and amount. For purposes of calculating
the actual payments to the physician,
cost savings are measured by comparing
the hospital’s actual acquisition costs
for the items and supplies or costs of
providing the specified services that are
subject to the shared savings program to
the hospital’s baseline costs for the same
items, supplies or services during the 1year period immediately preceding the
commencement of the program.
(13) The remuneration to be paid over
the term of the arrangement (or the
formula for the remuneration) is—
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(i) Set in advance, does not vary
during the term of the arrangement, and
is not determined in a manner that takes
into account the volume or value of
referrals or other business generated
between the parties;
(ii) Not based in whole or in part on
a reduction in the length of stay for a
particular patient or in the aggregate for
the hospital;
(iii) Distributed to the physicians in
each participating physician pool or in
each qualified physician organization if
the qualified physician organization
consists of at least five participating
physicians on a per capita basis with
respect to each performance measure;
and
(iv) Paid directly to participating
physicians or qualified physician
organizations.
(14) The remuneration paid to a
participating physician or qualified
physician organization may not include
any amount that takes into account the
provision of a greater volume of Federal
health care patient procedures or
services than the volume provided by
the participating physician or qualified
physician organization during the
period of the same length immediately
preceding the commencement of the
program as that covered by the payment.
(15) The hospital maintains accurate
and contemporaneous documentation of
the incentive payment or shared savings
program and makes such documentation
available to the Secretary upon request,
including, but not limited to, the
following:
(i) The written agreement between the
parties;
(ii) The basis for the selection of the
performance measures;
(iii) The selection and qualifications
of the individual or organization
designated as the independent medical
reviewer;
(iv) The written findings of the
independent medical reviewer;
(v) Corrective actions taken by the
hospital based on the written findings of
the independent medical reviewer (or
any other review indicating that
corrective action was needed);
(vi) The amount and calculation of
payments made under the incentive
payment or shared savings program,
including the hospital’s projected and
actual acquisition costs where relevant;
(vii) The re-basing of performance
measures; and
(viii) The written notification
provided to hospital patients.
(16) The arrangement does not violate
the anti-kickback statute (section
1128B(b) of the Social Security Act) or
any Federal or State law or regulation
governing billing or claims submission.
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PART 414—PAYMENT FOR PART B
MEDICAL AND OTHER HEALTH
SERVICES
16. The authority citation for part 414
continues to read as follows:
Authority: Secs. 1102, 1871, and 1881(b)(l)
of the Social Security Act (42 U.S.C. 1302,
1395hh, and 1395rr(b)(l)).
Subpart B—Physicians and Other
Practitioners
17. Section 414.22 is amended by
revising paragraphs (b)(5)(i)(A) and (B)
to read as follows:
§ 414.22
Relative value units (RVUs).
*
*
*
*
*
(b) * * *
(5) * * *
(i) * * *
(A) Facility practice expense RVUs.
The facility practice expense RVUs
apply to services furnished to patients
in the hospital, skilled nursing facility,
community mental health center, or in
an ambulatory surgical center.
(B) Nonfacility practice expense
RVUs. The nonfacility practice expense
RVUs apply to services performed in a
physician’s office, a patient’s home, a
nursing facility, or a facility or
institution other than a hospital or
skilled nursing facility, community
mental health center, or ASC.
*
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*
18. Section 414.50 is amended by—
A. Revising paragraph (a) introductory
text.
B. Revising paragraphs (a)(1)(i),
(a)(2)(ii) and (iii).
C. Redesignating paragraph (b) as
paragraph (c).
D. Adding new paragraphs (a)(2)(iv)
and (b).
The revisions and additions read as
follows:
§ 414.50 Physician or other supplier billing
for diagnostic tests performed or
interpreted by an outside supplier or at a
site other than the office of the billing
physician or other supplier.
(a) General rules. Except as provided
for in paragraph (b) of this section, for
services covered under section
1861(s)(3) of the Act—
(1) * * *
(i) The performing supplier’s net
charge to the billing physician or other
supplier’s actual charge. For purposes of
this paragraph (a)(1) only, with respect
to the TC, the performing supplier is the
physician who supervised the TC, and
with respect to the PC, the performing
supplier is the physician who
performed the PC.
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*
*
(2) * * *
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(ii) An ‘‘outside supplier’’ does not
include a physician who is an employee
or independent contractor of the billing
physician or other supplier and who
furnishes the test or interpretation to the
billing physician or other supplier
under a reassignment that meets the
requirements of § 424.80 of this
subchapter;
(iii) The TC of a diagnostic test is not
subject to paragraph (a) if the TC is both
conducted and supervised within the
office of the billing physician or other
supplier and the supervising physician
is an employee or independent
contractor of the billing physician or
other supplier.
(iv) The ‘‘office of the billing
physician or other supplier’’ is any
medical office space, regardless of
number of locations, in which the
ordering physician or other ordering
supplier regularly furnishes patient
care, and includes space where the
billing physician or other supplier
furnishes diagnostic testing, if the space
is located in the same building (as
defined in § 411.351) in which the
ordering physician or other ordering
supplier regularly furnishes patient
care. With respect to a billing physician
or other supplier that is a physician
organization (as defined in § 411.351 of
this chapter), the ‘‘office of the billing
physician or other supplier’’ is space in
which the ordering physician provides
substantially the full range of patient
care services that the ordering physician
provides generally.
(b) Exception. Except with respect to
the purchase of a TC from an outside
supplier, the requirements of paragraph
(a) of this section do not apply to
diagnostic tests ordered by a physician
in a physician organization that does
not have any owners who have the right
to receive profit distributions.
*
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*
*
19. Section 414.65 is amended by
revising paragraph (a)(1) to read as
follows:
§ 414.65
Payment for telehealth services.
(a) * * *
(1) The Medicare payment amount for
office or other outpatient visits,
consultation, individual psychotherapy,
psychiatric diagnostic interview
examination, pharmacologic
management, end-stage renal disease
related services included in the monthly
capitation payment (except for one visit
per month to examine the access site),
and individual medical nutrition
therapy furnished via an interactive
telecommunications system is equal to
the current fee schedule amount
applicable for the service of the
physician or practitioner. The Medicare
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payment amount for follow-up inpatient
telehealth consultations furnished via
an interactive telecommunications
system is equal to the current fee
schedule amount applicable to
subsequent hospital care provided by a
physician or practitioner.
*
*
*
*
*
20. Section 414.67 is amended by
adding paragraph (d) to read as follows:
§ 414.67 Incentive payments for Health
Professional Shortage Areas.
*
*
*
*
*
(d) HPSA bonuses are payable for
services furnished by physicians in
areas designated as HPSAs as of
December 31 of the prior year.
Physicians furnishing services in areas
that are designated as HPSAs prior to
the beginning of the year but not
included on the published list of zip
codes for which automated HPSA bonus
payments are made should use the AQ
modifier to receive the HPSA bonus
payment.
Subpart K—Payment for Drugs and
Biologicals Under Part B
21. Section 414.904 is amended by
revising paragraphs (b)(2), (c)(2), (d)(3),
and (e)(1) to read as follows:
§ 414.904 Average sales price as the basis
for payment.
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(b) * * *
(2) Calculation of the average sales
price.
(i) For dates of service before April 1,
2008, the average sales price is
determined by—
(A) Computing the sum of the
products (for each National Drug Code
assigned to the drug products) of the
manufacturer’s average sales price and
the total number of units sold; and
(B) Dividing that sum by the sum of
the total number of units sold for all
NDCs assigned to the drug products.
(ii) For dates of service on or after
April 1, 2008, the average sales price is
determined by—
(A) Computing the sum of the
products (for each National Drug Code
assigned to such drug products) of the
manufacturer’s average sales price,
determined by the Secretary without
dividing such price by the total number
of billing units for the National Drug
Code for the billing and payment code
and the total number of units sold; and
(B) Dividing the sum determined
under clause (A) by the sum of the
products (for each National Drug Code
assigned to such drug products) of the
total number of units sold and the total
number of billing units for the National
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Drug Code for the billing and payment
code.
(iii) For purposes of this subsection
and subsection (c), the term billing unit
means the identifiable quantity
associated with a billing and payment
code, as established by CMS.
(c) * * *
(2) Calculation of the average sales
price.
(i) For dates of service before April 1,
2008, the average sales price is
determined by—
(A) Computing the sum of the
products (for each National Drug Code
assigned to the drug product) of the
manufacturer’s average sales price and
the total number of units sold; and
(B) Dividing that sum by the sum of
the total number of units sold for all
NDCs assigned to the drug product.
(ii) For dates of service on or after
April 1, 2008, the average sales price is
determined by—
(A) Computing the sum of the
products (for each National Drug Code
assigned to such drug products) of the
manufacturer’s average sales price,
determined by the Secretary without
dividing such price by the total number
of billing units for the National Drug
Code for the billing and payment code
and the total number of units sold; and
(B) Dividing the sum determined
under clause (A) by the sum of the
products (for each National Drug Code
assigned to such drug products) of the
total number of units sold and the total
number of billing units for the National
Drug Code for the billing and payment
code.
(d) * * *
(3) Widely available market price and
average manufacturer price. If the
Inspector General finds that the average
sales price exceeds the widely available
market price or the average
manufacturer price by 5 percent or more
in CYs 2005, 2006, 2007, 2008 and 2009,
the payment limit in the quarter
following the transmittal of this
information to the Secretary is the lesser
of the widely available market price or
103 percent of the average manufacturer
price.
(e) * * *
(1) * * *
(i) Treatment of Certain Drugs.
Beginning with April 1, 2008, the
payment amount for—
(A) Each single source drug or
biological described in section
1842(o)(1)(G) that is treated as a
multiple source drug because of the
application of section 1847A(c)(6)(C)(ii)
is the lower of—
(1) The payment amount that would
be determined for such drug or
biological applying section
1847A(c)(6)(C)(ii); or
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(2) The payment amount that would
have been determined for such drug or
biological if section 1847A(c)(6)(C)(ii)
were not applied.
(B) A multiple source drug described
in section 1842(o)(1)(G) (excluding a
drug or biological that is treated as a
multiple source drug because of the
application of section 1847A(c)(6)(C)(ii))
is the lower of—
(1) The payment amount that would
be determined for such drug or
biological taking into account the
application of section 1847A(c)(6)(C)(ii);
or
(2) The payment amount that would
have been determined for such drug or
biological if section 1847A(c)(6)(C)(ii)
were not applied.
*
*
*
*
*
22. Section 414.908 is amended by
revising paragraph (a)(3)(xii) to read as
follows:
§ 414.908
program.
Competitive acquisition
(a) * * *
(3) * * *
(xii) Agrees not to transport CAP
drugs from one practice location or
place of service to another location
except in accordance with a written
agreement between the participating
CAP physician and the approved CAP
vendor that requires that drugs are not
subjected to conditions that will
jeopardize their integrity, stability, and/
or sterility while being transported.
*
*
*
*
*
23. Section 414.914 is amended by
revising paragraph (f)(12) to read as
follows:
§ 414.914
Terms of contract.
*
*
*
*
*
(f) * * *
(12) Supply CAP drugs upon receipt
of a prescription order to all
participating CAP physicians who have
selected the approved CAP vendor,
except when the conditions of
paragraph (h) of this section or
§ 414.916(b) are met;
*
*
*
*
*
24. Section 414.916 is amended by—
A. Redesignating paragraph (b)(4) as
(b)(5).
B. Adding new paragraph (b)(4).
The addition reads as follows:
§ 414.916 Dispute resolution for vendors
and beneficiaries.
*
*
*
*
*
(b) * * *
(4) Upon notification from CMS of a
participating CAP physician’s
suspension from the program, the
approved CAP vendor shall cease
delivery of CAP drugs to the suspended
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participating CAP physician until the
suspension has been lifted.
*
*
*
*
*
25. Section 414.917 is amended by
revising paragraph (b)(4) to read as
follows:
§ 414.917 Dispute resolution and process
for suspension or termination of approved
CAP contract and termination of physician
participation under exigent circumstances.
*
*
*
*
*
(b) * * *
(4) The approved CAP vendor may
appeal that termination by requesting a
reconsideration. A determination must
be made as to whether the approved
CAP vendor has been meeting the
service and quality obligations of its
CAP contract. The approved CAP
vendor’s contract will remain
suspended during the reconsideration
process.
*
*
*
*
*
reasonable efforts to obtain the signature
of the beneficiary. For purposes of this
section, ‘‘the claim’’ includes the actual
claim form or such other form that
contains adequate notice to the
beneficiary or other authorized
individual that the purpose of the
signature is to authorize a provider or
supplier to submit a claim to Medicare
for specified services furnished to the
beneficiary.
(b) * * *
(6) An ambulance provider or
supplier with respect to emergency or
non-emergency ambulance transport
services, if the following conditions and
documentation requirements are met.
*
*
*
*
*
30. Section 424.44 is amended by
adding paragraph (a)(3) to read as
follows:
§ 424.44
Time limits for filing claims.
26. The authority citation for part 415
continues to read as follows:
(a) * * *
(3) Within 30 calendar days of the
effective date of a revocation of
Medicare billing privileges as defined in
§ 424.535 for physician or nonphysician
practitioner organizations, physicians,
nonphysician practitioners or
independent diagnostic testing facilities.
*
*
*
*
*
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
Subpart D—To Whom Payment Is
Ordinarily Made
PART 415—SERVICES FURNISHED BY
PHYSICIANS IN PROVIDERS,
SUPERVISING PHYSICIANS IN
TEACHING SETTINGS, AND
RESIDENTS IN CERTAIN SETTINGS
Subpart C—Part B Carrier Payments
for Physician Services to Beneficiaries
in Providers
§ 415.130
[Amended]
27. In § 415.130(d), the phrase
‘‘December 31, 2007’’ is removed and
the phrase ‘‘June 30, 2008’’ is added in
its place.
PART 424—CONDITIONS FOR
MEDICARE PAYMENT
28. The authority citation for part 424
continues to read as follows:
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
Subpart C—Claims for Payment
29. Section 424.36 is amended by
revising paragraphs (a) and (b)(6)
introductory text to read as follows:
sroberts on PROD1PC70 with PROPOSALS
§ 424.36
Signature requirements.
(a) General rule. The beneficiary’s
own signature is required on the claim
unless the beneficiary has died or the
provisions of paragraphs (b), (c), or (d)
of this section apply. In order to utilize
one of the provisions of paragraph (b)(1)
through (b)(5), the provider, or where
applicable, the supplier, must make
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31. Section 424.57 is amended by—
A. Amending paragraph (a) by adding
the definitions of ‘‘Continuous positive
airway pressure (CPAP)’’ and ‘‘Sleep
test’’ in alphabetical order.
B. Adding new paragraph (f).
The revisions and additions read as
follows:
§ 424.57 Special payment rules for items
furnished by DMEPOS suppliers and
issuance of DMEPOS supplier billing
privileges.
(a) * * *
Continuous positive airway pressure
(CPAP) device means a machine that
introduces air into the breathing
passages at pressures high enough to
overcome obstructions in the airway in
order to improve airflow. The airway
pressure delivered into the upper
airway is continuous during both
inspiration and expiration.
*
*
*
*
*
Sleep test means an attended or
unattended diagnostic clinical test
whether performed in or out of a sleep
laboratory. The ‘‘provider of the sleep
test’’ is the individual or entity that
directly or indirectly administers the
sleep test and/or provides the sleep test
device used to administer the sleep test.
*
*
*
*
*
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(f) Payment prohibition. A supplier
cannot receive Medicare payment for a
CPAP device if that supplier, or its
affiliate, is directly or indirectly the
provider of the sleep test used to
diagnose a beneficiary with obstructive
sleep apnea.
Subpart P—Requirements for
Establishing and Maintaining Medicare
Billing Privileges
32. Section 424.502 is amended by
adding the definition ‘‘Physician or
nonphysician practitioner organization’’
in alphabetical order to read as follows:
§ 424.502
Definitions.
*
*
*
*
*
Physician or nonphysician
practitioner organization means any
physician or nonphysician practitioner
entity that enrolls in the Medicare
program as a sole proprietorship or
organizational entity such as clinic or
group practice.
*
*
*
*
*
§ 424.510
[Amended]
33. In § 424.510, paragraph (d)(8) is
removed.
34. Section 424.516 is added to read
as follows:
§ 424.516 Additional provider and supplier
requirements for enrolling and maintaining
active enrollment status in the Medicare
program.
(a) Certifying compliance. CMS
enrolls and maintains an active
enrollment status for a provider or
supplier when that provider or supplier
certifies that it meets, and continues to
meet, and CMS verifies that it meets,
and continues to meet, all of the
following requirements:
(1) Compliance with title XVIII of the
Act and applicable Medicare
regulations.
(2) Compliance with Federal and State
licensure, certification, and regulatory
requirements, as required, based on the
type of services or supplies the provider
or supplier type will furnish and bill
Medicare.
(3) Not employing or contracting with
individuals or entities that meet either
of the following conditions:
(i) Excluded from participation in any
Federal health care programs, for the
provision of items and services covered
under the programs, in violation of
section 1128A(a)(6) of the Act.
(ii) Debarred by the General Services
Administration (GSA) from any other
Executive Branch procurement or
nonprocurement programs or activities,
in accordance with the Federal
Acquisition and Streamlining Act of
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1994, and with the HHS Common Rule
at 45 CFR part 76.
(b) Reporting requirements
Independent Diagnostic Testing
Facilities (IDTFs). IDTF reporting
requirements are specified in
§ 410.33(g)(2) of this part.
(c) Reporting requirements DMEPOS
suppliers. DMEPOS reporting
requirements are specified in
§ 424.57(c)(2).
(d) Reporting requirements for
physician and nonphysician
practitioner organizations (NPP),
physicians and nonphysician
practitioners. Physician groups/
organizations, physicians and
nonphysician practitioners must report
to CMS the following information
within the specified timeframes:
(1) Within 30 days—
(i) A change of ownership;
(ii) Any adverse legal action; or
(iii) Change in practice location.
(2) All other changes in enrollment
must be reported within 90 days.
(e) Reporting requirements for all
other providers and suppliers. Provider
and suppliers not identified in
paragraphs (a) through (d) of this
section, must report to CMS the
following information within the
specified timeframes:
(1) Within 30 days for a change of
ownership, including changes in
authorized official(s) or delegated
official(s);
(2) All other changes to enrollment
must be reported within 90 days.
(f) Maintaining documentation. A
provider or supplier is required to
maintain ordering and referring
documentation, including the NPI,
received from a physician or eligible
nonphysician practitioner for 10 years
from the date of service. Physicians and
nonphysician practitioners are required
to maintain written ordering and
referring documentation for 10 years
from the date of service.
35. Section 424.517 is added to read
as follows:
sroberts on PROD1PC70 with PROPOSALS
§ 424.517
Onsite review.
(a) CMS reserves the right, when
deemed necessary, to perform onsite
review of a provider or supplier to
verify that the enrollment information
submitted to CMS or its agents is
accurate and to determine compliance
with Medicare enrollment requirements.
Site visits for enrollment purposes do
not affect those site visits performed for
establishing compliance with conditions
of participation. Based upon the results
of CMS’s onsite review, the provider
may be subject to denial or revocation
of Medicare billing privileges as
specified in § 424.530 or § 424.535 of
this part.
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(1) Medicare Part A providers. CMS
determines, upon on-site review, that
the provider meets either of the
following conditions:
(i) Is unable to furnish Medicarecovered items or services.
(ii) Has failed to satisfy any of the
Medicare enrollment requirements.
(2) Medicare Part B providers. CMS
determines, upon review, that the
supplier meets any of the following
conditions:
(i) Is unable to furnish Medicarecovered items or services.
(ii) Has failed to satisfy any or all of
the Medicare enrollment requirements.
(iii) Has failed to furnish Medicare
covered items or services as required by
the statute or regulations.
(b) [Reserved]
36. Section 424.520 is revised to read
as follows:
§ 424.520 Effective date of Medicare billing
privileges.
(a) Surveyed, certified or accredited
providers and suppliers. The effective
date for billing privileges for providers
and suppliers requiring State survey,
certification or accreditation is specified
in § 489.13 of this chapter. If a provider
or supplier is seeking accreditation from
a CMS-approved accreditation
organization, the effective date is
specified in § 489.13(d).
(b) Independent Diagnostic Testing
Facilities. The effective date for billing
privileges for IDTFS is specified in
§ 410.33(i) of this part.
(c) DMEPOS suppliers. The effective
date for billing privileges for DMEPOS
suppliers is specified in § 424.57(b) of
this subpart and section 1834(j)(1)(A) of
the Act.
37. Section 424.530 is amended by—
A. Revising the section heading as set
forth below.
B. Adding paragraphs (a)(6) and (a)(7).
The revision and additions read as
follows:
§ 424.530 Denial of enrollment in the
Medicare program.
(a) * * *
(6) Overpayment. The current owner
(as defined in § 424.502), physician or
nonphysician practitioner has an
existing overpayment at the time of
filing of an enrollment application.
(7) Payment suspension. The current
owner (as defined in § 424.502),
physician or nonphysician practitioner
has been placed under a Medicare
payment suspension as defined in
§ 405.370 through § 405.372 of this
subchapter.
*
*
*
*
*
38. Section 424.535 is amended by—
A. Reserving paragraph (a)(8).
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38609
B. Adding paragraphs (a)(9), (a)(10),
and (g).
C. Revising paragraph (f).
The additions and revision read as
follows:
§ 424.535 Revocation of enrollment and
billing privileges in the Medicare program.
(a) * * *
(8) [Reserved]
(9) Failure to report. The provider or
supplier did not comply with the
reporting requirements specified in
§ 424.516(d)(1)(ii) and (iii) of this
subpart.
(10) Failure to document. The
provider or supplier did not comply
with the documentation requirements
specified in § 424.516(f) of this subpart.
*
*
*
*
*
(f) Effective date of revocation.
Revocation becomes effective 30 days
after CMS or the CMS contractor mails
notice of its determination to the
provider or supplier, except if the
revocation is based on Federal exclusion
or debarment, felony conviction, license
suspension or revocation, or the practice
location is determined by CMS or its
contractor not to be operational. When
a revocation is based on a Federal
exclusion or debarment, felony
conviction, license suspension or
revocation, or the practice location is
determined by CMS or its contractor not
to be operational, the revocation is
effective with the date of exclusion or
debarment, felony conviction, license
suspension or revocation or the date
that CMS or its contractor determined
that the provider or supplier was no
longer operational.
(g) Submission of claims for services
furnished before revocation. A
physician organization, physician,
nonphysician practitioner or
independent diagnostic testing facility
must submit all claims for items and
services furnished within 30 calendar
days of the effective date of revocation.
39. Section 424.565 is added to read
as follows:
§ 424.565
Overpayment.
Failure to report. A physician or
nonphysician practitioner organization,
physician or nonphysician practitioner
that does not comply with the reporting
requirements specified in
§ 424.516(d)(1)(ii) and (iii) of this
subpart is assessed an overpayment
back to the date of the adverse legal
action or change in practice location.
Overpayments are processed in
accordance with Part 405, Subpart C of
this chapter.
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PART 485—CONDITIONS OF
PARTICIPATION: SPECIALIZED
PROVIDERS
40. The authority citation for part 485
continues to read as follows:
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395(hh)).
Subpart B—Conditions of
Participation: Comprehensive
Outpatient Rehabilitation Facilities
41. Section 485.58 is amended by
revising the introductory text and
paragraphs (a)(1)(i), and (e)(2) to read as
follows:
§ 485.58 Condition of participation:
Comprehensive rehabilitation program.
sroberts on PROD1PC70 with PROPOSALS
These services must be furnished by
personnel that meet the qualifications
set forth in § 485.70 and must be
consistent with the plan of treatment
and the results of comprehensive
patient assessments.
(a) * * *
(1) * * *
(i) Provide, in accordance with
accepted principles of medical practice,
medical direction, medical care
services, consultation, and medical
supervision of nonphysician staff;
*
*
*
*
*
(e) * * *
(2) Exceptions. Physical therapy,
occupational therapy, and speechlanguage pathology services may be
furnished away from the premises of the
CORF including the individual’s home
when payment is not otherwise made
under Title XVIII of the Act. In addition,
a single home environment evaluation is
covered if there is a need to evaluate the
potential impact of the home
environment on the rehabilitation goals.
The single home environment
evaluation requires the presence of the
patient and the physical therapist,
occupational therapist, or speechlanguage pathologist, as appropriate.
*
*
*
*
*
42. Section 485.70 is amended by—
A. Revising paragraphs (c), (e), and (j).
B. Removing paragraph (k).
C. Redesignating paragraphs (l) and
(m) as paragraphs (k) and (l),
respectively.
The revision reads as follows:
§ 485.70
Personnel qualifications.
*
*
*
*
*
(c) An occupational therapist and an
occupational therapy assistant must
meet the qualifications in § 484.4 of this
chapter.
*
*
*
*
*
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(e) A physical therapist and a physical
therapist assistant must meet the
qualifications in § 484.4 of this chapter.
*
*
*
*
*
(j) A registered respiratory therapist
must—
(1) Be licensed by the State in which
practicing, if applicable; and
(2) Must meet one of the following
requirements:
(i) Has successfully completed the
requirements of the Commission on the
Accreditation of Allied Health
Education Programs (CAAHEP) for the
Advanced Level Therapist and the
registry examinations administered by
the National Board for Respiratory Care.
(ii) Has successfully completed the
requirements of the Commission on the
Accreditation of Allied Health
Education Programs (CAAHEP) for the
Advanced Level Therapist and is
eligible to take the registry examination
for registered respiratory therapists
administered by the National Board for
Respiratory Therapy, Inc.
(iii) Has equivalent training and
experience as determined by the
National Board for Respiratory Therapy,
Inc. and be eligible to take the registry
examination for registered respiratory
therapists administered by the National
Board for Respiratory Therapy, Inc.
*
*
*
*
*
Subpart H—Conditions of Participation
for Clinics, Rehabilitation Agencies,
and Public Health Agencies as
Providers of Outpatient Physical
Therapy and Speech-Language
Pathology Services
43. Section 485.703 is amended by—
A. Adding the definition, ‘‘Extension
location,’’ in alphabetical order.
B. Revising paragraph (2) of the
definition of ‘‘rehabilitation agency.’’
The addition and revision read as
follows:
§ 485.703
Definitions.
*
*
*
*
*
Extension location. A location or site
from which a rehabilitation agency
provides services within a portion of the
total geographic area served by the
primary site. The extension location is
part of the rehabilitation agency. The
extension location is located sufficiently
close to share administration,
supervision, and services in a manner
that renders it unnecessary for the
extension location to independently
meet the conditions of participation as
a rehabilitation agency.
*
*
*
*
*
Rehabilitation agency. An agency
that—
*
*
*
*
*
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(2) Provides at least physical therapy
or speech-language pathology services.
*
*
*
*
*
44. Section 485.711 is amended by
revising paragraphs (b)(3) and (c) to read
as follows:
§ 485.711 Condition of participation: Plan
of care and physician involvement.
*
*
*
*
*
(b) * * *
(3) The plan of care and results of
treatment are reviewed by the physician
or by the individual who established the
plan at least as often as the patient’s
condition requires, and the indicated
action is taken. (For Medicare patients,
the plan must be reviewed by a
physician, nurse practitioner, clinical
nurse specialist, or physician assistant
at least every 30 days.)
*
*
*
*
*
(c) Standard: Emergency care. The
established procedures to be followed
by personnel in an emergency cover
immediate care of the patient, persons
to be notified, and reports to be
prepared.
45. Section 485.717 is revised to read
as follows:
§ 485.717 Condition of participation:
Rehabilitation program.
This condition and standards apply
only to a rehabilitation agency’s own
patients, not to patients of hospitals,
skilled nursing facilities (SNFs), or
Medicaid nursing facilities (NFs) to
whom the agency furnishes services.
The hospital, SNF, or NF is responsible
for ensuring that qualified staff furnish
services for which they arrange or
contract for their patients. The
rehabilitation agency provides physical
therapy and speech-language pathology
services to all of its patients who need
them.
(a) Standard: Qualification of staff.
The agency’s therapy services are
furnished by qualified individuals as
direct services and services provided
under contract.
(b) Standard: Arrangements for
services. If services are provided under
contract, the contract must specify all of
the following:
(1) Term of the contract.
(2) The manner of termination or
renewal.
(3) Provisions stating that the agency
retains responsibility for the control and
supervision of the services.
PART 486—CONDITIONS FOR
COVERAGE OF SPECIALIZED
SERVICES FURNISHED BY
SUPPLIERS
46. The authority citation for part 486
continues to read as follows:
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Authority: Secs. 1102, 1138, and 1871 of
the Social Security Act (42 U.S.C. 1302,
1320b–8, and 1395hh) and section 371 of the
Public Health Service Act (42 U.S.C 273).
Subpart C—Conditions for Coverage:
Portable X-Ray Services
47. Section 486.104 is amended by—
A. Revising the introductory text of
paragraph (a).
B. Revising paragraph (a)(1).
C. Adding paragraph (a)(4).
The revision and addition read as
follows:
§ 486.104 Condition for coverage:
Qualifications, orientation and health of
technical personnel.
*
*
*
*
*
(a) Standard-qualifications of
technologists. All operators of the
portable X-ray equipment meet the
requirements of paragraph (a)(1) or (4) of
this section:
(1) Successful completion of a
program of formal training in X-ray
technology in a school approved by the
Joint Review Committee on Education
in Radiologic Technology (JRCERT), or
have earned a bachelor’s or associate
degree in radiologic technology from an
accredited college or university.
*
*
*
*
*
(4) For those whose training was
completed prior to January 1, 1993,
successful completion of a program of
formal training in X-ray technology in a
school approved by the Council on
Education of the American Medical
Association, or by the American
Osteopathic Association is acceptable.
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
Dated: June 9, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: June 23, 2008.
Michael O. Leavitt,
Secretary.
Note: These addenda will not appear in the
Code of Federal Regulations.
sroberts on PROD1PC70 with PROPOSALS
Addendum A: Explanation and Use of
Addenda B
The addenda on the following pages
provide various data pertaining to the
Medicare fee schedule for physicians’
services furnished in 2009. Addendum B
contains the RVUs for work, non-facility PE,
facility PE, and malpractice expense, and
other information for all services included in
the PFS.
In previous years, we have listed many
services in Addendum B that are not paid
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under the PFS. To avoid publishing as many
pages of codes for these services, we are not
including clinical laboratory codes or the
alpha-numeric codes (Healthcare Common
Procedure Coding System (HCPCS) codes not
included in CPT) not paid under the PFS in
Addendum B.
Addendum B—2009 Relative Value Units
and Related Information Used in Determining
Medicare Payments for 2009
This addendum contains the following
information for each CPT code and alphanumeric HCPCS code, except for: Alphanumeric codes beginning with B (enteral and
parenteral therapy), E (durable medical
equipment), K (temporary codes for
nonphysicians’ services or items), or L
(orthotics); and codes for anesthesiology.
Please also note the following:
• An ‘‘NA’’ in the ‘‘Non-facility PE RVUs’’
column of Addendum B means that CMS has
not developed a PE RVU in the non-facility
setting for the service because it is typically
performed in the hospital (for example, an
open heart surgery is generally performed in
the hospital setting and not a physician’s
office). If there is an ‘‘NA’’ in the non-facility
PE RVU column, and the contractor
determines that this service can be performed
in the non-facility setting, the service will be
paid at the facility PE RVU rate.
• Services that have an ‘‘NA’’ in the
‘‘Facility PE RVUs’’ column of Addendum B
are typically not paid using the PFS when
provided in a facility setting. These services
(which include ‘‘incident to’’ services and
the technical portion of diagnostic tests) are
generally paid under either the outpatient
hospital prospective payment system or
bundled into the hospital inpatient
prospective payment system payment.
1. CPT/HCPCS code. This is the CPT or
alpha-numeric HCPCS number for the
service. Alpha-numeric HCPCS codes are
included at the end of this addendum.
2. Modifier. A modifier is shown if there
is a technical component (modifier TC) and
a professional component (PC) (modifier–26)
for the service. If there is a PC and a TC for
the service, Addendum B contains three
entries for the code. A code for: The global
values (both professional and technical);
modifier–26 (PC); and, modifier TC. The
global service is not designated by a modifier,
and physicians must bill using the code
without a modifier if the physician furnishes
both the PC and the TC of the service.
Modifier–53 is shown for a discontinued
procedure, for example a colonoscopy that is
not completed. There will be RVUs for a code
with this modifier.
3. Status indicator. This indicator shows
whether the CPT/HCPCS code is in the PFS
and whether it is separately payable if the
service is covered.
A = Active code. These codes are
separately payable under the PFS if covered.
There will be RVUs for codes with this
status. The presence of an ‘‘A’’ indicator does
not mean that Medicare has made a national
coverage determination regarding the service.
Carriers remain responsible for coverage
decisions in the absence of a national
Medicare policy.
B = Bundled code. Payments for covered
services are always bundled into payment for
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38611
other services not specified. If RVUs are
shown, they are not used for Medicare
payment. If these services are covered,
payment for them is subsumed by the
payment for the services to which they are
incident (an example is a telephone call from
a hospital nurse regarding care of a patient).
C = Carriers price the code. Carriers will
establish RVUs and payment amounts for
these services, generally on an individual
case basis following review of
documentation, such as an operative report.
D* = Deleted/discontinued code.
E = Excluded from the PFS by regulation.
These codes are for items and services that
CMS chose to exclude from the fee schedule
payment by regulation. No RVUs are shown,
and no payment may be made under the PFS
for these codes. Payment for them, when
covered, continues under reasonable charge
procedures.
F = Deleted/discontinued codes. (Code not
subject to a 90-day grace period.) These codes
are deleted effective with the beginning of
the year and are never subject to a grace
period. This indicator is no longer effective
beginning with the 2005 fee schedule as of
January 1, 2005.
G = Code not valid for Medicare purposes.
Medicare uses another code for reporting of,
and payment for, these services. (Codes
subject to a 90-day grace period.) This
indicator is no longer effective with the 2005
PFS as of January 1, 2005.
H* = Deleted modifier. For 2000 and later
years, either the TC or PC shown for the code
has been deleted and the deleted component
is shown in the database with the H status
indicator.
I = Not valid for Medicare purposes.
Medicare uses another code for the reporting
of, and the payment for these services. (Codes
not subject to a 90-day grace period.)
L = Local codes. Carriers will apply this
status to all local codes in effect on January
1, 1998 or subsequently approved by central
office for use. Carriers will complete the
RVUs and payment amounts for these codes.
M = Measurement codes, used for reporting
purposes only. There are no RVUs and no
payment amounts for these codes. Medicare
uses them to aid with performance
measurement. No separate payment is made.
These codes should be billed with a zero
(($0.00) charge and are denied) on the
MPFSDB.
N = Non-covered service. These codes are
noncovered services. Medicare payment may
not be made for these codes. If RVUs are
shown, they are not used for Medicare
payment.
R = Restricted coverage. Special coverage
instructions apply. If the service is covered
and no RVUs are shown, it is carrier-priced.
T = There are RVUs for these services, but
they are only paid if there are no other
services payable under the PFS billed on the
same date by the same provider. If any other
services payable under the PFS are billed on
the same date by the same provider, these
services are bundled into the service(s) for
which payment is made.
X = Statutory exclusion. These codes
represent an item or service that is not within
the statutory definition of ‘‘physicians’
services’’ for PFS payment purposes. No
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RVUs are shown for these codes, and no
payment may be made under the PFS.
(Examples are ambulance services and
clinical diagnostic laboratory services.)
4. Description of code. This is an
abbreviated version of the narrative
description of the code.
5. Physician work RVUs. These are the
RVUs for the physician work for this service
in 2009. Note: The separate BN adjustor is
not reflected in these physician work RVUs.
6. Fully implemented non-facility practice
expense RVUs. These are the fully
implemented resource-based PE RVUs for
non-facility settings.
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7. Transitional Non-facility practice
expense RVUs. These are the 2009 resourcebased PE RVUs for non-facility settings.
8. Fully implemented facility practice
expense RVUs. These are the fully
implemented resource-based PE RVUs for
facility settings.
9. Transitional facility practice expense
RVUs. These are the 2009 resource-based PE
RVUs for facility settings.
10. Malpractice expense RVUs. These are
the RVUs for the malpractice expense for the
service for 2009.
11. Global period. This indicator shows the
number of days in the global period for the
code (0, 10, or 90 days). An explanation of
the alpha codes follows:
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MMM = Code describes a service furnished
in uncomplicated maternity cases including
antepartum care, delivery, and postpartum
care. The usual global surgical concept does
not apply. See the 1999 Physicians’ Current
Procedural Terminology for specific
definitions.
XXX = The global concept does not apply.
YYY = The global period is to be set by the
carrier (for example, unlisted surgery codes).
ZZZ = Code related to another service that
is always included in the global period of the
other service. (Note: Physician work and PE
are associated with intra service time and in
some instances in the post service time.
*Codes with these indicators had a 90-day
grace period before January 1, 2005.
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BILLING CODE 4120–01–C
Agencies
[Federal Register Volume 73, Number 130 (Monday, July 7, 2008)]
[Proposed Rules]
[Pages 38502-38881]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-14949]
[[Page 38501]]
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Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 409, 410 et al.
Medicare Program; Revisions to Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2009; and Revisions to
the Amendment of the E-Prescribing Exemption for Computer Generated
Facsimile Transmissions; Proposed Rule
Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Proposed
Rules
[[Page 38502]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 409, 410, 411, 414, 415, 424, 485, and 486
[CMS-1403-P]
RIN 0938-AP18
Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule and Other Revisions to Part B for CY 2009; and
Revisions to the Amendment of the E-Prescribing Exemption for Computer
Generated Facsimile Transmissions; Proposed Rule
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would address proposed changes to Medicare
Part B payment policy. We are proposing these changes to ensure that
our payment systems are updated to reflect changes in medical practice
and the relative value of services. This proposed rule also discusses
refinements to resource-based practice expense (PE) relative value
units (RVUs); geographic practice cost indices (GPCI) changes;
malpractice RVUs; requests for additions to the list of telehealth
services; several coding issues; payment for covered outpatient drugs
and biologicals; the competitive acquisition program (CAP); application
of health professional shortage area (HPSA) bonus payments; payment for
renal dialysis services; performance standards for mobile independent
diagnostic testing facilities; and physician and nonphysician
practitioners furnishing diagnostic testing services; a solicitation
for comments regarding the use of the Federal Payment Levy Program to
recover delinquent Federal tax debts; a proposed amendment to the
exemption for computer-generated facsimile transmissions from the
National Council for Prescription Drug Programs (NCPDP) SCRIPT standard
for transmitting prescription and certain prescription-related
information for Part D covered drugs prescribed for Part D eligible
individuals; conforming and clarifying changes for comprehensive
outpatient rehabilitation facilities (CORFs); revisions for
rehabilitation agencies; therapy-related technical corrections; the
physician quality reporting initiative; physician self-referral issues
and anti-markup; beneficiary signature for nonemergency ambulance
transport; the chiropractic services demonstration; educational
requirements for nurse practitioners and clinical nurse specialists;
qualifications of portable x-ray supplier personnel; the expiration of
provisions of the Medicare, Medicaid, and SCHIP Extension Act of 2007;
bonus payments for long ambulance transports; the annual update for
clinical laboratory fees under the clinical laboratory fee schedule;
physician certification/recertification for home health services; a
prohibition concerning providers of sleep tests; organ retrieval; a
revision to the ``Appeals of CMS or CMS contractor Determinations When
a Provider or Supplier Fails to Meet the Requirements for Medicare
Billing Privileges'' final rule; and, potentially misvalued services
under the physician fee schedule.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than August 29, 2008.
ADDRESSES: In commenting, please refer to file code CMS-1403-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on this
regulation to Follow the instructions for ``Comment or Submission'' and
enter the filecode to find the document accepting comments.
2. By regular mail. You may mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-1403-P, P.O. Box 8013, Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1403-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to either of the following addresses:
a. Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
b. 7500 Security Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by mailing your
comments to the addresses provided at the end of the ``Collection of
Information Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Pam West, (410) 786-2302, for issues related to practice expense.
Rick Ensor, (410) 786-5617, for issues related to practice expense
methodology.
Stephanie Monroe, (410) 786-6864, for issues related to malpractice
RVUs.
Esther Markowitz, (410) 786-4595, for issues related to telehealth
services.
Craig Dobyski, (410) 786-4584, for issues related to geographic
practice cost indices.
Ken Marsalek, (410) 786-4502, for issues related to the multiple
procedure payment reduction for diagnostic imaging.
Catherine Jansto, (410) 786-7762, or Cheryl Gilbreath, (410) 786-
5919, for issues related to payment for covered outpatient drugs and
biologicals.
Edmund Kasaitis, (410) 786-0477, or Bonny Dahm (410) 786-4006, for
issues related to the Competitive Acquisition Program (CAP) for Part B
drugs.
Corrine Axelrod, (410) 786-5620, for issues related to Health
Professional Shortage Area Bonus Payments.
[[Page 38503]]
Henry Richter, (410) 786-4562, for issues related to payments for
end-stage renal disease facilities.
August Nemec, (410) 786-0612, for issues related to independent
diagnostic testing facilities and enrollment issues; and the revision
to the ``Appeals of CMS or CMS contractor Determinations When a
Provider or Supplier Fails to Meet the Requirements for Medicare
Billing Privileges'' final rule.
Lisa Ohrin, (410) 786-4565, for issues related to incentive payment
and shared saving programs.
Don Romano, (410) 786-1401, for issues related to anti-markup
provisions.
Diane Stern, (410) 786-1133, for issues related to the quality
reporting system for physician payment for CY 2009.
Andrew Morgan, (410) 786-2543, for issues related to the e-
prescribing exemption for computer generated fax transmissions.
Terri Harris, (410) 786-6830, for issues related to payment for
comprehensive outpatient rehabilitation facilities (CORFs).
Lauren Oviatt, (410) 786-4683, for issues related to CORF
conditions of coverage.
Trisha Brooks, (410) 786-4561, for issues related to personnel
standards for portable x-ray suppliers.
David Walczak, (410) 786-4475, for issues related to beneficiary
signature for non-emergency ambulance transport services.
Jean Stiller, (410) 786-0708, for issues related to the prohibition
concerning providers of sleep tests
Mark Horney, (410) 786-4554, for issues related to the solicitation
for comments and data pertaining to physician organ retrieval services.
Diane Milstead, (410) 786-3355, or Gaysha Brooks, (410) 786-9649,
for all other issues.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
[CMS-1403-P] and the specific ``issue identifier'' that precedes the
section on which you choose to comment.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: https://
www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Table of Contents
To assist readers in referencing sections contained in this
preamble, we are providing a table of contents. Some of the issues
discussed in this preamble affect the payment policies, but do not
require changes to the regulations in the Code of Federal Regulations
(CFR). Information on the regulation's impact appears throughout the
preamble, and therefore, is not exclusively in section VI. of this
proposed rule.
I. Background
A. Development of the Relative Value System
1. Work RVUs
2. Practice Expense Relative Value Units (PE RVUs)
3. Resource-Based Malpractice RVUs
4. Refinements to the RVUs
5. Adjustments to RVUs are Budget Neutral
B. Components of the Fee Schedule Payment Amounts
C. Most Recent Changes to the Fee Schedule
II. Provisions of the Proposed Regulation
A. Resource-Based Practice Expense (PE) Relative Value Units
(RVUs)
1. Current Methodology
2. PE Proposals for CY 2009
B. Geographic Practice Cost Indices (GPCIs): Locality Discussion
C. Malpractice RVUs (TC/PC issue)
D. Medicare Telehealth Services
E. Specific Coding Issues related to Physician Fee Schedule
F. Part B Drug Payment
1. Average Sales Price (ASP) Issues
2. Competitive Acquisition Program (CAP) Issues
G. Application of the HPSA Bonus Payment
H. Provisions Related to Payment for Renal Dialysis Services
Furnished by End-Stage Renal Disease (ESRD) Facilities
I. Independent Diagnostic Testing Facility (IDTF) Issues
J. Physician and Nonphysician Practitioner (NPP) Enrollment
Issues
K. Proposed Amendment to the Exemption for Computer-Generated
Facsimile Transmission from the National Council for Prescription
Drug Programs (NCPDP) SCRIPT Standard for Transmitting Prescription
and Certain Prescription-Related Information for Part D Eligible
Individuals
L. Comprehensive Outpatient Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
M. Technical Corrections for Therapy-Related Issues
N. Physician Self-Referral and Anti-Markup Issues
O. Physician Quality Reporting Initiative
P. Discussion of Chiropractic Services Demonstration
Q. Educational Requirements for Nurse Practitioners and Clinical
Nurse Specialists
R. Portable X-Ray Issue
S. Expiring Provisions and Related Discussions
T. Other Issues
1. Physician Certification (G0180) and Recertification (G0179)
for Medicare-Covered Home Health Services under a Home Health Plan
of Care (POC) in the Home Health Prospective Payment System (HH PPS)
2. Prohibition Concerning Providers of Sleep Tests
3. Beneficiary Signature for Nonemergency Ambulance Transport
Services
4. Solicitation of Comments and Data Pertaining to Physician
Organ Retrieval Services
5. Revision to the ``Appeals of CMS or CMS contractor
Determinations When a Provider or Supplier Fails to Meet the
Requirements for Medicare Billing Privileges'' Final Rule
III. Potentially Misvalued Services under Physician Fee Schedule
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
Regulation Text
Addendum A--Explanation and Use of Addendum B
Addendum B--2009 Relative Value Units and Related Information
Used in Determining Medicare Payments for 2008
Addendum C--[Reserved for Final Rule]
Addendum D--Proposed 2009 Geographic Adjustment Factors (GAFs)
Addendum E--Proposed 2009* Geographic Practice Cost Indices
(GPCIs) by State and Medicare Locality
Addendum F--Multiple Procedure Reduction Code List
Addendum G--FY 2009 Wage Index for Urban Areas Based On CBSA
Labor Market Areas (ESRD)
Addendum H--FY 2009 Wage Index based on CBSA Labor Market Areas
for Rural Areas (ESRD)
Acronyms
In addition, because of the many organizations and terms to
which we refer by acronym in this final rule with comment period, we
are listing these acronyms and their corresponding terms in
alphabetical order below:
ACC American College of Cardiology
ACR American College of Radiology
AFROC Association of Freestanding Radiation Oncology Centers
AHA American Heart Association
[[Page 38504]]
AHRQ [HHS'] Agency for Healthcare Research and Quality
AIDS Acquired immune deficiency syndrome
AMA American Medical Association
AMP Average manufacturer price
AOA American Osteopathic Association
ASC Ambulatory surgical center
ASP Average sales price
ASRT American Society of Radiologic Technologists
ASTRO American Society for Therapeutic Radiology and Oncology
ATA American Telemedicine Association
AWP Average wholesale price
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program]
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection
Act of 2000 (Pub. L. 106-554)
BLS Bureau of Labor Statistics
BN Budget neutrality
CABG Coronary artery bypass graft
CAD Coronary artery disease
CAH Critical access hospital
CAHEA Committee on Allied Health Education and Accreditation
CAP Competitive acquisition program
CBSA Core-Based Statistical Area
CCHIT Certification Commission for Healthcare Information Technology
CEAMA Council on Education of the American Medical Association
CF Conversion factor
CfC Conditions for Coverage
CFR Code of Federal Regulations
CKD Chronic kidney disease
CLFS Clinical laboratory fee schedule
CMA California Medical Association
CMP Civil money penalty
CMS Centers for Medicare & Medicaid Services
CNS Clinical nurse specialist
CoP Condition of participation
CORF Comprehensive Outpatient Rehabilitation Facility
CPAP Continuous positive air pressure
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPI-U Consumer price index for urban customers
CPT [Physicians'] Current Procedural Terminology (4th Edition, 2002,
copyrighted by the American Medical Association)
CRT Certified respiratory therapist
CY Calendar year
DHS Designated health services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and
supplies
DNP Doctor of Nursing Practice
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT Diabetes self-management training
E/M Evaluation and management
EDI Electronic data interchange
EEG Electroencephalogram
EHR Electronic health record
EKG Electrocardiogram
EMG Electromyogram
EOG Electro-oculogram
EPO Erythopoeitin
ESRD End-stage renal disease
FAX Facsimile
FDA Food and Drug Administration (HHS)
FFS Fee-for-service
FMS [Department of the Treasury's] Financial Management Service
FPLP Federal Payment Levy Program
FR Federal Register
GAF Geographic adjustment factor
GAO General Accounting Office
GPO Group purchasing organization
GPCI Geographic practice cost index
HAC Hospital-acquired conditions
HCPAC Health Care Professional Advisory Committee
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HH PPS Home Health Prospective Payment System
HHA Home health agency
HHRG Home health resource group
HHS [Department of] Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996
(Pub. L. 104-191)
HIT Health information technology
HITSP Healthcare Information Technology Standards Panel
HIV Human immunodeficiency virus
HPSA Health Professional Shortage Area
HRSA Health Resources Services Administration (HHS)
ICF Intermediate care facilities
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IFC Interim final rule with comment period
IPPS Inpatient prospective payment system
IRS Internal Revenue Service
IVIG Intravenous immune globulin
IWPUT Intra-service work per unit of time
JRCERT Joint Review Committee on Education in Radiologic Technology
MA Medicare Advantage
MA-PD Medicare Advantage-Prescription Drug Plans
MedCAC Medicare Evidence Development and Coverage Advisory Committee
(formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MIEA-TRHCA Medicare Improvements and Extension Act of 2006 (that is,
Division B of the Tax Relief and Health Care Act of 2006 (TRHCA)
(Pub. L. 109-432)
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173)
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L.
110-173)
MNT Medical nutrition therapy
MP Malpractice
MPPR Multiple procedure payment reduction
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MS-DRG Medicare Severity-Diagnosis related group
MSA Metropolitan statistical area
NCD National Coverage Determination
NCPDP National Council for Prescription Drug Programs
NDC National drug code
NISTA National Institute of Standards and Technology Act
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQF National Quality Forum
NTTAA National Technology Transfer and Advancement Act of 1995 (Pub.
L. 104-113)
OACT [CMS'] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
OIG Office of Inspector General
OMB Office of Management and Budget
ONC [HHS'] Office of the National Coordinator for Health Information
Technology
OPPS Outpatient prospective payment system
OSA Obstructive Sleep Apnea
OSCAR Online Survey and Certification and Reporting
P4P Pay for performance
PA Physician assistant
PC Professional component
PCF Patient compensation fund
PDP Prescription drug plan
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POC Plan of care
PPI Producer price index
PPS Prospective payment system
PQRI Physician Quality Reporting Initiative
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PSG Polysomnography
PT Physical therapy
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RN Registered nurse
RNAC Reasonable net acquisition cost
RRT Registered respiratory therapist
RUC [AMA's Specialty Society] Relative (Value) Update Committee
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SLP Speech-language pathology
SMS [AMA's] Socioeconomic Monitoring System
SNF Skilled nursing facility
SOR System of record
TC Technical Component
TIN Tax identification number
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
UPMC University of Pittsburgh Medical Center
USDE United States Department of Education
VBP Value-based purchasing
WAMP Widely available market price
I. Background
[If you choose to comment on issues in this section, please include
the
[[Page 38505]]
caption ``BACKGROUND'' at the beginning of your comments.]
Since January 1, 1992, Medicare has paid for physicians' services
under section 1848 of the Social Security Act (the Act), ``Payment for
Physicians' Services.'' The Act requires that payments under the
physician fee schedule (PFS) be based on national uniform relative
value units (RVUs) based on the relative resources used in furnishing a
service. Section 1848(c) of the Act requires that national RVUs be
established for physician work, practice expense (PE), and malpractice
expense. Before the establishment of the resource-based relative value
system, Medicare payment for physicians' services was based on
reasonable charges.
A. Development of the Relative Value System
1. Work RVUs
The concepts and methodology underlying the PFS were enacted as
part of the Omnibus Budget Reconciliation Act (OBRA) of 1989 (Pub. L.
101-239), and OBRA 1990, (Pub. L. 101-508). The final rule, published
on November 25, 1991 (56 FR 59502), set forth the fee schedule for
payment for physicians' services beginning January 1, 1992. Initially,
only the physician work RVUs were resource-based, and the PE and
malpractice RVUs were based on average allowable charges.
The physician work RVUs established for the implementation of the
fee schedule in January 1992 were developed with extensive input from
the physician community. A research team at the Harvard School of
Public Health developed the original physician work RVUs for most codes
in a cooperative agreement with the Department of Health and Human
Services (DHHS). In constructing the code-specific vignettes for the
original physician work RVUs, Harvard worked with panels of experts,
both inside and outside the Federal government, and obtained input from
numerous physician specialty groups.
Section 1848(b)(2)(B) of the Act specifies that the RVUs for
anesthesia services are based on RVUs from a uniform relative value
guide. We established a separate conversion factor (CF) for anesthesia
services, and we continue to utilize time units as a factor in
determining payment for these services. As a result, there is a
separate payment methodology for anesthesia services.
We establish physician work RVUs for new and revised codes based on
recommendations received from the American Medical Association's (AMA)
Specialty Society Relative Value Update Committee (RUC).
2. Practice Expense Relative Value Units (PE RVUs)
Section 121 of the Social Security Act Amendments of 1994 (Pub. L.
103-432), enacted on October 31, 1994, amended section
1848(c)(2)(C)(ii) of the Act and required us to develop resource-based
PE RVUs for each physician's service beginning in 1998. We were to
consider general categories of expenses (such as office rent and wages
of personnel, but excluding malpractice expenses) comprising PEs.
Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay
implementation of the resource-based PE RVU system until January 1,
1999. In addition, section 4505(b) of the BBA provided for a 4-year
transition period from charge-based PE RVUs to resource-based RVUs.
We established the resource-based PE RVUs for each physician's
service in a final rule, published November 2, 1998 (63 FR 58814),
effective for services furnished in 1999. Based on the requirement to
transition to a resource-based system for PE over a 4-year period,
resource-based PE RVUs did not become fully effective until 2002.
This resource-based system was based on two significant sources of
actual PE data: The Clinical Practice Expert Panel (CPEP) data; and the
AMA's Socioeconomic Monitoring System (SMS) data. The CPEP data were
collected from panels of physicians, practice administrators, and
nonphysicians (for example, registered nurses (RNs)) nominated by
physician specialty societies and other groups. The CPEP panels
identified the direct inputs required for each physician's service in
both the office setting and out-of-office setting. We have since
refined and revised these inputs based on recommendations from the RUC.
The AMA's SMS data provided aggregate specialty-specific information on
hours worked and PEs.
Separate PE RVUs are established for procedures that can be
performed in both a nonfacility setting, such as a physician's office,
and a facility setting, such as a hospital outpatient department. The
difference between the facility and nonfacility RVUs reflects the fact
that a facility typically receives separate payment from Medicare for
its costs of providing the service, apart from payment under the PFS.
The nonfacility RVUs reflect all of the direct and indirect PEs of
providing a particular service.
Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106-113) directed the Secretary of Health and Human Services
(the Secretary) to establish a process under which we accept and use,
to the maximum extent practicable and consistent with sound data
practices, data collected or developed by entities and organizations to
supplement the data we normally collect in determining the PE
component. On May 3, 2000, we published the interim final rule (65 FR
25664) that set forth the criteria for the submission of these
supplemental PE survey data. The criteria were modified in response to
comments received, and published in the Federal Register (65 FR 65376)
as part of a November 1, 2000 final rule. The PFS final rules published
in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended
the period during which we would accept these supplemental data through
March 1, 2005.
In CY 2007 PFS final rule with comment period (71 FR 69624), we
revised the methodology for calculating PE RVUs beginning in CY 2007
and provided for a 4-year transition for the new PE RVUs under this new
methodology. We will continue to evaluate this policy and proposed
necessary revisions through future rulemaking.
3. Resource-Based Malpractice (MP) RVUs
Section 4505(f) of the BBA amended section 1848(c) of the Act
requiring us to implement resource-based malpractice (MP) RVUs for
services furnished on or after 2000. The resource-based MP RVUs were
implemented in the PFS final rule published November 2, 1999 (64 FR
59380). The MP RVUs were based on malpractice insurance premium data
collected from commercial and physician-owned insurers from all the
States, the District of Columbia, and Puerto Rico.
4. Refinements to the RVUs
Section 1848(c)(2)(B)(i) of the Act requires that we review all
RVUs no less often than every 5 years. The first 5-Year Review of the
physician work RVUs was published on November 22, 1996 (61 FR 59489)
and was effective in 1997. The second 5-Year Review was published in
the CY 2002 PFS final rule with comment period (66 FR 55246) and was
effective in 2002. The third 5-Year Review of physician work RVUs was
published in the CY 2007 PFS final rule with comment period (71 FR
69624) and was effective on January 1, 2007. (Note: Additional codes
relating to the third 5-
[[Page 38506]]
Year Review of physician work RVUs were addressed in the CY 2008 PFS
final rule with comment period (72 FR 66360).)
In 1999, the AMA's RUC established the Practice Expense Advisory
Committee (PEAC) for the purpose of refining the direct PE inputs.
Through March 2004, the PEAC provided recommendations to CMS for over
7,600 codes (all but a few hundred of the codes currently listed in the
AMA's Current Procedural Terminology (CPT) codes). As part of the CY
2007 PFS final rule with comment period (71 FR 69624), we implemented a
new methodology for determining resource-based PE RVUs and are
transitioning this over a 4-year period.
In the CY 2005 PFS final rule with comment period (69 FR 66236), we
implemented the first 5-Year Review of the MP RVUs (69 FR 66263).
5. Adjustments to RVUs are Budget Neutral
Section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments
in RVUs for a year may not cause total PFS payments to differ by more
than $20 million from what they would have been if the adjustments were
not made. In accordance with section 1848(c)(2)(B)(ii)(II) of the Act,
if adjustments to RVUs cause expenditures to change by more than $20
million, we make adjustments to ensure that expenditures do not
increase or decrease by more than $20 million.
As explained in the CY 2007 PFS final rule with comment period (71
FR 69624), due to the increase in work RVUs resulting from the third 5-
Year Review of physician work RVUs, we applied a separate budget
neutrality (BN) adjustor to the work RVUs for services furnished during
2007. This approach is consistent with the method we use to make BN
adjustments to the PE RVUs to reflect the changes in these PE RVUs.
B. Components of the Fee Schedule Payment Amounts
To calculate the payment for every physician's service, the
components of the fee schedule (physician work, PE, and MP RVUs) are
adjusted by a geographic practice cost index (GPCI). The GPCIs reflect
the relative costs of physician work, PE, and malpractice insurance in
an area compared to the national average costs for each component.
RVUs are converted to dollar amounts through the application of a
CF, which is calculated by CMS' Office of the Actuary (OACT).
The formula for calculating the Medicare fee schedule payment
amount for a given service and fee schedule area can be expressed as:
Payment = [(RVU work x budget neutrality adjustor (round product to two
decimal places) x GPCI work) + (RVU PE x GPCI PE) + (RVU malpractice x
GPCI malpractice)] x CF.
C. Most Recent Changes to the Fee Schedule
The CY 2008 PFS final rule with comment period (72 FR 66222)
addressed certain provisions of Division B of the Tax Relief and Health
Care Act of 2006--Medicare Improvements and Extension Act of 2006 (Pub.
L. 109-432) (MIEA-TRHCA), and made other changes to Medicare Part B
payment policy to ensure that our payment systems are updated to
reflect changes in medical practice and the relative value of services.
The CY 2008 PFS final rule with comment period also discussed
refinements to resource-based PE RVUs; GPCI changes; malpractice RVUs;
requests for additions to the list of telehealth services; several
coding issues including additional codes from the 5-Year Review;
payment for covered outpatient drugs and biologicals; the competitive
acquisition program (CAP); clinical lab fee schedule issues; payment
for end-stage renal dialysis (ESRD) services; performance standards
facilities; expiration of the physician scarcity area (PSA) bonus
payment; conforming and clarifying changes for comprehensive outpatient
rehabilitation facilities (CORFs); a process for updating the drug
compendia; physician self-referral issues; beneficiary signature for
ambulance transport services; durable medical equipment (DME) update;
the chiropractic services demonstration; a Medicare economic index
(MEI) data change; technical corrections; standards and requirement
related to therapy services under Medicare Parts A and B; revisions to
the ambulance fee schedule; the ambulance inflation factor for CY 2008;
and an amendment to the e-prescribing exemption for computer-generated
facsimile transmissions
We also finalized the calendar year (CY) 2007 interim RVUs and
issued interim RVUs for new and revised procedure codes for CY 2008.
In accordance with section 1848(d)(1)(E)(i) of the Act, we also
announced that the PFS update for CY 2008 is -10.1 percent, the initial
estimate for the sustainable growth rate (SGR) for CY 2008 is 2.2
percent and the CF for CY 2008 is $34.0682. However, subsequent to
publication of the CY 2008 PFS final rule with comment period, section
101(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub.
L. 110-173) (MMSEA) was enacted on December 29, 2007 and provided for a
0.5 percent update to the conversion factor for the period beginning
January 1, 2008 and ending June 30, 2008. Therefore, for the first half
of 2008 (that is, January through June), the Medicare PFS conversion
factor was $38.0870. For the remaining portion of 2008 (July through
December), the Medicare PFS conversion factor will be $34.0682 (as
published in the 2008 PFS final rule with comment period).
II. Provisions of the Proposed Regulation
A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)
[If you choose to comment on issues in this section, please include
the caption ``RESOURCE-BASED PE RVUs'' at the beginning of your
comments.]
Practice expense (PE) is the portion of the resources used in
furnishing the service that reflects the general categories of
physician and practitioner expenses, such as office rent and personnel
wages but excluding malpractice expenses, as specified in section
1848(c)(1)(B) of the Act.
Section 121 of the Social Security Amendments of 1994 (Pub. L. 103-
432), enacted on October 31, 1994, required CMS to develop a
methodology for a resource-based system for determining PE RVUs for
each physician's service. Until that time, PE RVUs were based on
historical allowed charges. This legislation stated that the revised PE
methodology must consider the staff, equipment, and supplies used in
the provision of various medical and surgical services in various
settings beginning in 1998. The Secretary has interpreted this to mean
that Medicare payments for each service would be based on the relative
PE resources typically involved with furnishing the service.
The initial implementation of resource-based PE RVUs was delayed
from January 1, 1998, until January 1, 1999, by section 4505(a) of the
BBA. In addition, section 4505(b) of the BBA required that the new
payment methodology be phased in over 4 years, effective for services
furnished in CY 1999, and fully effective in CY 2002. The first step
toward implementation of the statute was to adjust the PE values for
certain services for CY 1998. Section 4505(d) of the BBA required that,
in developing the resource-based PE RVUs, the Secretary must--
[[Page 38507]]
Use, to the maximum extent possible, generally-accepted
cost accounting principles that recognize all staff, equipment,
supplies, and expenses, not solely those that can be linked to specific
procedures and actual data on equipment utilization.
Develop a refinement method to be used during the
transition.
Consider, in the course of notice and comment rulemaking,
impact projections that compare new proposed payment amounts to data on
actual physician PE.
In CY 1999, we began the 4-year transition to resource-based PE
RVUs utilizing a ``top-down'' methodology whereby we allocated
aggregate specialty-specific practice costs to individual procedures.
The specialty-specific PEs were derived from the American Medical
Association's (AMA's) Socioeconomic Monitoring Survey (SMS). In
addition, under section 212 of the BBRA, we established a process
extending through March 2005 to supplement the SMS data with data
submitted by a specialty. The aggregate PEs for a given specialty were
then allocated to the services furnished by that specialty on the basis
of the direct input data (that is, the staff time, equipment, and
supplies) and work RVUs assigned to each CPT code.
For CY 2007, we implemented a new methodology for calculating PE
RVUs. Under this new methodology, we use the same data sources for
calculating PE, but instead of using the ``top-down'' approach to
calculate the direct PE RVUs, under which the aggregate direct and
indirect costs for each specialty are allocated to each individual
service, we now utilize a ``bottom-up'' approach to calculate the
direct costs. Under the ``bottom up'' approach, we determine the direct
PE by adding the costs of the resources (that is, the clinical staff,
equipment, and supplies) typically required to provide each service.
The costs of the resources are calculated using the refined direct PE
inputs assigned to each CPT code in our PE database, which are based on
our review of recommendations received from the AMA's Relative Value
Update Committee (RUC). For a more detailed explanation of the PE
methodology see the June 29, 2006 proposed notice (71 FR 37242) and the
CY 2007 PFS final rule with comment period (71 FR 69629).
1. Current Methodology
a. Data Sources for Calculating Practice Expense
The AMA's SMS survey data and supplemental survey data from the
specialties of cardiothoracic surgery, vascular surgery, physical and
occupational therapy, independent laboratories, allergy/immunology,
cardiology, dermatology, gastroenterology, radiology, independent
diagnostic testing facilities (IDTFs), radiation oncology, and urology
are used to develop the PE per hour (PE/HR) for each specialty. For
those specialties for which we do not have PE/HR, the appropriate PE/HR
is obtained from a crosswalk to a similar specialty.
The AMA developed the SMS survey in 1981 and discontinued it in
1999. Beginning in 2002, we incorporated the 1999 SMS survey data into
our calculation of the PE RVUs, using a 5-year average of SMS survey
data. (See the CY 2002 PFS final rule with comment period (66 FR
55246).) The SMS PE survey data are adjusted to a common year, 2005.
The SMS data provide the following six categories of PE costs:
Clinical payroll expenses, which are payroll expenses
(including fringe benefits) for nonphysician clinical personnel.
Administrative payroll expenses, which are payroll
expenses (including fringe benefits) for nonphysician personnel
involved in administrative, secretarial, or clerical activities.
Office expenses, which include expenses for rent, mortgage
interest, depreciation on medical buildings, utilities, and telephones.
Medical material and supply expenses, which include
expenses for drugs, x-ray films, and disposable medical products.
Medical equipment expenses, which include depreciation,
leases, and rent of medical equipment used in the diagnosis or
treatment of patients.
All other expenses, which include expenses for legal
services, accounting, office management, professional association
memberships, and any professional expenses not previously mentioned in
this section.
In accordance with section 212 of the BBRA, we established a
process to supplement the SMS data for a specialty with data collected
by entities and organizations other than the AMA (that is, those
entities and organizations representing the specialty itself). (See the
Criteria for Submitting Supplemental Practice Expense Survey Data
interim final rule with comment period (65 FR 25664).) Originally, the
deadline to submit supplementary survey data was through August 1,
2001. In the CY 2002 PFS final rule (66 FR 55246), the deadline was
extended through August 1, 2003. To ensure maximum opportunity for
specialties to submit supplementary survey data, we extended the
deadline to submit surveys until March 1, 2005 in the Revisions to
Payment Policies Under the Physician Fee Schedule for CY 2004 final
rule with comment period (68 FR 63196) (hereinafter referred to as CY
2004 PFS final rule with comment period).
The direct cost data for individual services were originally
developed by the Clinical Practice Expert Panels (CPEP). The CPEP data
include the supplies, equipment, and staff times specific to each
procedure. The CPEPs consisted of panels of physicians, practice
administrators, and nonphysicians (for example, RNs) who were nominated
by physician specialty societies and other groups. There were 15 CPEPs
consisting of 180 members from more than 61 specialties and
subspecialties. Approximately 50 percent of the panelists were
physicians.
The CPEPs identified specific inputs involved in each physician's
service provided in an office or facility setting. The inputs
identified were the quantity and type of nonphysician labor, medical
supplies, and medical equipment.
In 1999, the AMA's RUC established the Practice Expense Advisory
Committee (PEAC). From 1999 to March 2004, the PEAC, a multi-specialty
committee, reviewed the original CPEP inputs and provided us with
recommendations for refining these direct PE inputs for existing CPT
codes. Through its last meeting in March 2004, the PEAC provided
recommendations for over 7,600 codes which we have reviewed and almost
all of which we have accepted. As a result, the current PE inputs
differ markedly from those originally recommended by the CPEPs. The
PEAC has now been replaced by the Practice Expense Review Committee
(PERC), which acts to assist the RUC in recommending PE inputs.
b. Allocation of PE to Services
The aggregate level specialty-specific PEs are derived from the
AMA's SMS survey and supplementary survey data. To establish PE RVUs
for specific services, it is necessary to establish the direct and
indirect PE associated with each service.
(i) Direct costs. The direct costs are determined by adding the
costs of the resources (that is, the clinical staff, equipment, and
supplies) typically required to provide the service. The costs of these
resources are calculated from the refined direct PE inputs in our PE
database. These direct inputs are then scaled to the current aggregate
pool of direct PE RVUs. The aggregate pool
[[Page 38508]]
of direct PE RVUs can be derived using the following formula:
(PE RVUs x physician CF) x (average direct percentage from SMS /
(Supplemental PE/HR data)).
(ii) Indirect costs. The SMS and supplementary survey data are the
source for the specialty-specific aggregate indirect costs used in our
PE calculations. Then, we allocate the indirect costs to the code level
on the basis of the direct costs specifically associated with a code
and the maximum of either the clinical labor costs or the physician
work RVUs. For calculation of the 2009 PE RVUs, we are proposing to use
the 2007 procedure-specific utilization data crosswalked to 2008
services. To arrive at the indirect PE costs--
We apply a specialty-specific indirect percentage factor
to the direct expenses to recognize the varying proportion that
indirect costs represent of total costs by specialty. For a given
service, the specific indirect percentage factor to apply to the direct
costs for the purpose of the indirect allocation is calculated as the
weighted average of the ratio of the indirect to direct costs (based on
the survey data) for the specialties that furnish the service. For
example, if a service is furnished by a single specialty with indirect
PEs that were 75 percent of total PEs, the indirect percentage factor
to apply to the direct costs for the purposes of the indirect
allocation would be (0.75 / 0.25) = 3.0. The indirect percentage factor
is then applied to the service level adjusted indirect PE allocators.
We use the specialty-specific PE/HR from the SMS survey
data, as well as the supplemental surveys for cardiothoracic surgery,
vascular surgery, physical and occupational therapy, independent
laboratories, allergy/immunology, cardiology, dermatology, radiology,
gastroenterology, IDTFs, radiation oncology, and urology. (Note: For
radiation oncology, the data represent the combined survey data from
the American Society for Therapeutic Radiology and Oncology (ASTRO) and
the Association of Freestanding Radiation Oncology Centers (AFROC)). As
discussed in the CY 2008 PFS final rule with comment period (72 FR
66233), the PE/HR survey data for radiology is weighted by practice
size. We incorporate this PE/HR into the calculation of indirect costs
using an index which reflects the relationship between each specialty's
indirect scaling factor and the overall indirect scaling factor for the
entire PFS. For example, if a specialty had an indirect practice cost
index of 2.00, this specialty would have an indirect scaling factor
that was twice the overall average indirect scaling factor. If a
specialty had an indirect practice cost index of 0.50, this specialty
would have an indirect scaling factor that was half the overall average
indirect scaling factor.
When the clinical labor portion of the direct PE RVU is
greater than the physician work RVU for a particular service, the
indirect costs are allocated based upon the direct costs and the
clinical labor costs. For example, if a service has no physician work
and 1.10 direct PE RVUs, and the clinical labor portion of the direct
PE RVUs is 0.65 RVUs, we would use the 1.10 direct PE RVUs and the 0.65
clinical labor portions of the direct PE RVUs to allocate the indirect
PE for that service.
c. Facility/Nonfacility Costs
Procedures that can be furnished in a physician's office, as well
as in a hospital or facility setting, have two PE RVUs: Facility and
nonfacility. The nonfacility setting includes physicians' offices,
patients' homes, freestanding imaging centers, and independent
pathology labs. Facility settings include hospitals, ambulatory
surgical centers (ASCs), and skilled nursing facilities (SNFs). The
methodology for calculating PE RVUs is the same for both facility and
nonfacility RVUs, but is applied independently to yield two separate PE
RVUs. Because the PEs for services provided in a facility setting are
generally included in the payment to the facility (rather than the
payment to the physician under the PFS), the PE RVUs are generally
lower for services provided in the facility setting.
d. Services With Technical Components (TCs) and Professional Components
(PCs)
Diagnostic services are generally comprised of two components: A
professional component (PC) and a technical component (TC), both of
which may be performed independently or by different providers. When
services have TCs, PCs, and global components that can be billed
separately, the payment for the global component equals the sum of the
payment for the TC and PC. This is a result of using a weighted average
of the ratio of indirect to direct costs across all the specialties
that furnish the global components, TCs, and PCs; that is, we apply the
same weighted average indirect percentage factor to allocate indirect
expenses to the global components, PCs, and TCs for a service. (The
direct PE RVUs for the TC and PC sum to the global under the bottom-up
methodology.)
e. Transition Period
As discussed in the CY 2007 PFS final rule with comment period (71
FR 69674), we are implementing the change in the methodology for
calculating PE RVUs over a 4-year period. During this transition
period, the PE RVUs will be calculated on the basis of a blend of RVUs
calculated using our methodology described previously in this section
(weighted by 25 percent during CY 2007, 50 percent during CY 2008, 75
percent during CY 2009, and 100 percent thereafter), and the CY 2006 PE
RVUs for each existing code. PE RVUs for codes that are new during this
period will be calculated using only the current PE methodology and
will be paid at the fully transitioned rate.
f. PE RVU Methodology
The following is a description of the PE RVU methodology.
(i) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/nonfacility place of
service level, and the specialty-specific survey PE per physician hour
data.
(ii) Calculate the Direct Cost PE RVUs
Sum the costs of each direct input.
Step 1: Sum the direct costs of the inputs for each service. The
direct costs consist of the costs of the direct inputs for clinical
labor, medical supplies, and medical equipment. The clinical labor cost
is the sum of the cost of all the staff types associated with the
service; it is the product of the time for each staff type and the wage
rate for that staff type. The medical supplies cost is the sum of the
supplies associated with the service; it is the product of the quantity
of each supply and the cost of the supply. The medical equipment cost
is the sum of the cost of the equipment associated with the service; it
is the product of the number of minutes each piece of equipment is used
in the service and the equipment cost per minute. The equipment cost
per minute is calculated as described at the end of this section.
Apply a BN adjustment to the direct inputs.
Step 2: Calculate the current aggregate pool of direct PE costs. To
do this, multiply the current aggregate pool of total direct and
indirect PE costs (that is, the current aggregate PE RVUs multiplied by
the CF) by the average direct PE percentage from the SMS and
supplementary specialty survey data.
Step 3: Calculate the aggregate pool of direct costs. To do this,
for all PFS
[[Page 38509]]
services, sum the product of the direct costs for each service from
Step 1 and the utilization data for that service.
Step 4: Using the results of Step 2 and Step 3 calculate a direct
PE BN adjustment so that the proposed aggregate direct cost pool does
not exceed the current aggregate direct cost pool and apply it to the
direct costs from Step 1 for each service.
Step 5: Convert the results of Step 4 to an RVU scale for each
service. To do this, divide the results of Step 4 by the Medicare PFS
CF.
(iii) Create the indirect PE RVUs
Create indirect allocators.
Step 6: Based on the SMS and supplementary specialty survey data,
calculate direct and indirect PE percentages for each physician
specialty.
Step 7: Calculate direct and indirect PE percentages at the service
level by taking a weighted average of the results of Step 6 for the
specialties that furnish the service. Note that for services with TCs
and PCs we are calculating the direct and indirect percentages across
the global components, PCs, and TCs. That is, the direct and indirect
percentages for a given service (for example, echocardiogram) do not
vary by the PC, TC and global component.
Step 8: Calculate the service level allocators for the indirect PEs
based on the percentages calculated in Step 7. The indirect PEs are
allocated based on the three components: the direct PE RVU, the
clinical PE RVU, and the work RVU.
For most services the indirect allocator is: indirect percentage *
(direct PE RVU/direct percentage) + work RVU.
There are two situations where this formula is modified:
If the service is a global service (that is, a service
with global, professional, and technical components), then the indirect
allocator is: indirect percentage * (direct PE RVU/direct percentage) +
clinical PE RVU + work RVU.
If the clinical labor PE RVU exceeds the work RVU (and the
service is not a global service), then the indirect allocator is:
indirect percentage * (direct PE RVU/direct percentage) + clinical PE
RVU.
Note: For global services, the indirect allocator is based on
both the work RVU and the clinical labor PE RVU. We do this to
recognize that, for the professional service, indirect PEs will be
allocated using the work RVUs, and for the TC service, indirect PEs
will be allocated using the direct PE RVU and the clinical labor PE
RVU. This also allows the global component RVUs to equal the sum of
the PC and TC RVUs.
)For presentation purposes in the examples in Table 1, the formulas
were divided into two parts for each service. The first part does not
vary by service and is the indirect percentage * (direct PE RVU/direct
percentage). The second part is either the work RVU, clinical PE RVU,
or both depending on whether the service is a global service and
whether the clinical PE RVU exceeds the work RVU (as described earlier
in this step).
Apply a BN adjustment to the indirect allocators.
Step 9: Calculate the current aggregate pool of indirect PE RVUs by
multiplying the current aggregate pool of PE RVUs by the average
indirect PE percentage from the physician specialty survey data. This
is similar to the Step 2 calculation for the direct PE RVUs.
Step 10: Calculate an aggregate pool of proposed indirect PE RVUs
for all PFS services by adding the product of the indirect PE
allocators for a service from Step 8 and the utilization data for that
service. This is similar to the Step 3 calculation for the direct PE
RVUs.
Step 11: Using the results of Step 9 and Step 10, calculate an
indirect PE adjustment so that the aggregate indirect allocation does
not exceed the available aggregate indirect PE RVUs and apply it to
indirect allocators calculated in Step 8. This is similar to the Step 4
calculation for the direct PE RVUs.
Calculate the Indirect Practice Cost Index.
Step 12: Using the results of Step 11, calculate aggregate pools of
specialty-specific adjusted indirect PE allocators for all PFS services
for a specialty by adding the product of the adjusted indirect PE
allocator for each service and the utilization data for that service.
Step 13: Using the specialty-specific indirect PE/HR data,
calculate specialty-specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the physician time for the service, and the
specialty's utilization for the service.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty-specific indirect PE scaling factors as under the current
methodology.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (NOTE: For services with TCs and PCs, we calculate
the indirect practice cost index across the global components, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC and
global component.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVU.
(iv) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs
from Step 17.
Step 19: Calculate and apply the final PE BN adjustment by
comparing the results of Step 18 to the current pool of PE RVUs. This
final BN adjustment is required primarily because certain specialties
are excluded from the PE RVU calculation for rate-setting purposes, but
all specialties are included for purposes of calculating the final BN
adjustment. (See ``Specialties excluded from rate-setting calculation''
below in this section.)
(v) Setup File Information
Specialties excluded from rate-setting calculation: For
the purposes of calculating the PE RVUs, we exclude certain specialties
such as midlevel practitioners paid at a percentage of the PFS,
audiology, and low volume specialties from the calculation. These
specialties are included for the purposes of calculating the BN
adjustment.
Crosswalk certain low volume physician specialties:
Crosswalk the utilization of certain specialties with relatively low
PFS utilization to the associated specialties.
Physical therapy utilization: Crosswalk the utilization
associated with all physical therapy services to the specialty of
physical therapy.
Identify professional and technical services not
identified under the usual TC and 26 modifiers: Flag the services that
are PC and TC services, but do not use TC and 26 modifiers (for
example, electrocardiograms). This flag associates the PC and TC with
the associated global code for use in creating the indirect PE RVU. For
example, the professional service code 93010 is associated with the
global code 93000.
Payment modifiers: Payment modifiers are accounted for in
the creation of the file. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier.
[[Page 38510]]
Work RVUs: The setup file contains the work RVUs from this
proposed rule.
(vi) Equipment Cost per Minute
The equipment cost per minute is calculated as:
(1/(minutes per year * usage)) * price * ((interest rate/(1 - (1/((1 +
interest rate) * life of equipment)))) + maintenance)
Where:
minutes per year = maximum minutes per year if usage were continuous
(that is, usage = 1); 150,000 minutes.
usage = equipment utilization assumption; 0.5.
price = price of the particular piece of equipment.
interest rate = 0.11.
life of equipment = useful life of the particular piece of
equipment.
maintenance = factor for maintenance; 0.05.
Note: To illustrate the PE calculation, in Table 1 we have used
the conversion factor (CF) of $34.0682 which was published in the CY
2008 PFS final rule with comment period.
[[Page 38511]]
Table 1.--Calculation of PE RVUs Under Methodology for Selected Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
99213 Office 33533 CABG, 93000 ECG,
Step Source Formula visit, est arterial, single 71020 Chest x-ray 71020TC Chest x- 7102026 Chest x- complete 93005 ECG, tracing 93010 ECG, report
Nonfacility Facility Nonfacility ray Nonfacility ray Nonfacility Nonfacility Nonfacility Nonfacility
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Labor cost (Lab)................. Step 1................. AMA.................... ....................... $13.32 $77.52 $5.74 $5.74 $-- $6.12 $6.12 $--
(2) Supply cost (Sup)................ Step 1................. AMA.................... ....................... $2.98 $7.34 $3.39 $3.39 $-- $1.19 $1.19 $--
(3) Equipment cost (Eqp)............. Step 1................. AMA.................... ....................... $0.19 $0.65 $8.17 $8.17 $-- $0.12 $0.12 $--
(4) Direct cost (Dir)................ Step 1................. ....................... =(1)+(2)+(3)........... $16.50 $85.51 $17.31 $17.31 $-- $7.43 $7.43 $--
(5) Direct adjustment (Dir Adj)...... Steps 2-4.............. See footnote*.......... ....................... 0.592 0.592 0.592 0.592 0.592 0.592 0.592 0.592
(6) Adjusted labor................... Steps 2-4.............. =Lab*Dir Adj........... =(1)*(5)............... $7.88 $45.88 $3.40 $3.40 $-- $3.62 $3.62 $--
(7) Adjusted supplies................ Steps 2-4.............. =Sup*Dir Adj........... =(2)*(5)............... $1.77 $4.34 $2.01 $2.01 $-- $0.71 $0.71 $--
(8) Adjusted equipment............... Steps 2-4.............. =Eqp*Dir Adj........... =(3)*(5)............... $0.12 $0.39 $4.84 $4.84 $-- $0.07 $0.07 $--
(9) Adjusted direct.................. Steps 2-4.............. ....................... =(6)+(7)+(8)........... $9.76 $50.61 $10.24 $10.24 $-- $4.40 $4.40 $--
(10) Conversion Factor (CF).......... Step 5................. MFS.................... ....................... $34.0682 $34.0682 $34.0682 $34.0682 $34.0682 $34.0682 $34.0682 $34.0682
(11) Adj. labor cost converted....... Step 5................. =(Lab*Dir Adj)/CF...... =(6)/(10).............. $0.23 $1.35 $0.10 $0.10 $-- $0.11 $0.11 $--
(12) Adj. supply cost converted...... Step 5................. =(Sup*Dir Adj)/CF...... =(7)/(10).............. $0.05 $0.13 $0.06 $0.06 $-- $0.02 $0.02 $--
(13) Adj. equip cost converted....... Step 5................. =(Eqp*Dir Adj)/CF...... =(8)/(10).............. $0.00 $0.01 $0.14 $0.14 $-- $0.00 $0.00 $--
(14) Adj. direct cost converted...... Step 5................. ....................... =(11)+(12)+(13)........ $0.29 $1.49 $0.30 $0.30 $-- $0.13 $0.13 $--
(15) Wrk RVU* Wrk Scaler............. Setup File............. MFS.................... ....................... $0.81 $29.62 $0.19 $-- $0.19 $0.15 $-- $0.15
(16) Dir--pct........................ Steps 6, 7............. Surveys................ ....................... 33.8% 32.6% 40.7% 40.7% 40.7% 37.7% 37.7% 37.7%
(17) Ind-