Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2009; E-Prescribing Exemption for Computer-Generated Facsimile Transmissions; and Payment for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), 69726-70237 [E8-26213]
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 405, 409, 410, 411, 413,
414, 415, 423, 424, 485, 486, and 489
[CMS–1403–FC] [CMS–1270–F2]
RINs 0938–AP18, 0938–AN14
Medicare Program; Payment Policies
Under the Physician Fee Schedule and
Other Revisions to Part B for CY 2009;
E-Prescribing Exemption for
Computer-Generated Facsimile
Transmissions; and Payment for
Certain Durable Medical Equipment,
Prosthetics, Orthotics, and Supplies
(DMEPOS)
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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AGENCY:
SUMMARY: This final rule with comment
period implements changes to the
physician fee schedule and other
Medicare Part B payment policies to
ensure that our payment systems are
updated to reflect changes in medical
practice and the relative value of
services. It also finalizes the calendar
year (CY) 2008 interim relative value
units (RVUs) and issues interim RVUs
for new and revised codes for CY 2009.
In addition, as required by the statute,
it announces that the physician fee
schedule update is 1.1 percent for CY
2009, the preliminary estimate for the
sustainable growth rate for CY 2009 is
7.4 percent, and the conversion factor
(CF) for CY 2009 is $36.0666. This final
rule with comment period also
implements or discusses certain
provisions of the Medicare
Improvements for Patients and
Providers Act of 2008 (MIPPA). (See the
Table of Contents for a listing of the
specific issues addressed in this rule.)
DATES: Effective Date: This final rule
with comment period is effective on
January 1, 2009 except for amendments
to § 410.62 and § 411.351 which are
effective July 1, 2009.
Comment Date: Comments will be
considered if we receive them at one of
the addresses provided below, no later
than 5 p.m. e.s.t. on December 29, 2008.
ADDRESSES: In commenting, please refer
to file code CMS–1403–FC. 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
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to https://www.regulations.gov. 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 to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1403–FC, 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 to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–1403–FC,
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:
7500 Security Boulevard, Baltimore, MD
21244–1850; or
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.)
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.
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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.
Corinne Axelrod, (410) 786–5620, for
issues related to Health Professional
Shortage Area Bonus Payments.
Henry Richter, (410) 786–4562, for
issues related to payments for end-stage
renal disease facilities.
Lisa Grabert, (410) 786–6827, for
issues related to hospital-acquired
conditions and the Physician Resource
Use Feedback Program.
August Nemec, (410) 786–0612, for
issues related to independent diagnostic
testing facilities; 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, Kristin
Bohl, (410) 786–8680, or Don Romano,
(410) 786–1401, for issues related to
anti-markup provisions and physician
self-referral (incentive payment and
shared savings programs).
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 nonemergency 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.
Regina Walker-Wren, (410) 786–9160,
for information concerning educational
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
requirements for nurse practitioners and
clinical nurse specialists.
Randy Throndset, (410) 786–0131, for
information concerning physician
certification and recertification for
Medicare home health services.
William Larson, (410) 786–4639, for
coverage issues related to the initial
preventive physical examination.
Cathleen Scally, (410) 786–5714, for
payment issues related to the initial
preventive physical examination.
Dorothy Shannon, (410) 786–3396, for
issues related to speech language
pathology.
Kendra Hedgebeth, (410) 786–4644, or
Gina Longus, (410) 786–1287, for issues
related to low vision aids.
Christopher Molling, (410) 786–6399,
or Anita Greenberg, (410) 786–4601, for
issues related to the repeal to transfer of
title for oxygen equipment.
Karen Jacobs, (410) 786–2173, or
Hafsa Bora, (410) 786–7899, for issues
related to the therapeutic shoes fee
schedule.
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 the
following issues:
• The Exception for Incentive
Payment and Shared Savings Programs
(§ 411.357(x)) in section II.N.1. of this
final rule with comment period;
• Sections 131(c), 144(b), and 149 of
the MIPPA as described in sections
III.C., III.J., and III.M. of this final rule
with comment period.
• Interim Relative Value Units (RVUs)
for selected codes identified in
Addendum C;
• Information on pricing for items in
Tables 2 through 5;
• Issues related to the Physician
Resource Use Feedback Program
described in section II.S.6. of this final
rule with comment period; and
• The physician self-referral
designated health services (DHS) codes
listed in Tables 29, 30, and 31. You can
assist us by referencing the file code
[CMS–1403–FC] and the section
heading 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://
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Jkt 217001
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
XVI. of this final rule with comment
period.
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 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
1. Payment for Preadministration-Related
Services for Intravenous Infusion of
Immune Globulin
2. Multiple Procedure Payment Reduction
for Diagnostic Imaging
3. HCPCS Code for Prostate Saturation
Biopsies
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
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K. Amendment to the Exemption for
Computer-Generated Facsimile (FAX)
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
L. Comprehensive Outpatient
Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
M. Technical Corrections for TherapyRelated Issues
N. Physician Self-Referral and AntiMarkup Issues
1. Exception for Incentive Payment and
Shared Savings Programs (§ 411.357(x))
2. Changes to Reassignment Rules Related
to Diagnostic Tests (Anti-Markup
Provisions)
O1. Physician Quality Reporting Initiative
O2. Electronic Prescribing (E-Prescribing)
Incentive Program
P. Discussion of Chiropractic Services
Demonstration
Q. Educational Requirements for Nurse
Practitioners and Clinical Nurse
Specialists
R. Portable X-Ray Issue
S. 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 Payment of
Continuous Positive Airway Pressure
(CPAP) Devices
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
6. Physician Resource Use Feedback
Program
T. Electronic Prescribing (E-Prescribing)
Incentive Program
III. Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA)
Provisions
A. Section 101: Improvements to Coverage
of Preventive Services
B. Section 131: Physician Payment,
Efficiency, and Quality Improvements
C. Section 131(c): Physician Resource Use
Feedback Program
D. Section 132: Incentives for Electronic
Prescribing
E. Section 133(b): Expanding Access to
Primary Care Services
F. Section 134: Extension of Floor on
Medicare Work Geographic Adjustment
Under the Medicare Physician Fee
Schedule
G. Section 136: Extension of Treatment of
Certain Physician Pathology Services
Under Medicare
H. Section 141: Extension of Exceptions
Process for Medicare Therapy Caps
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
I. Section 143: Speech-Language Pathology
Services
J. Section 144(b): Repeal of Transfer of
Title for Oxygen Equipment
K. Section 145: Clinical Laboratory Tests
L. Section 146: Improved Access to
Ambulance Services
M. Section 149: Adding Certain Entities as
Originating Sites for Payment of
Telehealth Services
N. Section 153: Renal Dialysis Provisions
IV. Potentially Misvalued Codes Under PFS
A. Valuing Services Under the Physician
Fee Schedule
B. Requested Approaches for the AMA
RUC To Utilize
C. AMA RUC Review of Potentially
Misvalued Codes
V. Refinement of Relative Value Units for
Calendar Year 2009 and Response to
Public Comments on Interim Relative
Value Units for 2008
A. Summary of Issues Discussed Related to
the Adjustment of Relative Value Units
B. Process for Establishing Work Relative
Value Units for the Physician Fee
Schedule
C. Interim 2008 Codes
D. Establishment of Interim Work Relative
Value Units for New and Revised
Physician’s Current Procedural
Terminology (CPT) Codes and New
Healthcare Common Procedure Coding
System Codes (HCPCS) for 2009
(Includes Table Titled ‘‘AMA RUC
Recommendations and CMS’ Decisions
for New and Revised 2009 CPT Codes’’)
E. Discussion of Codes and AMA RUC
Recommendations
F. Additional Coding Issues
G. Establishment of Interim PE RVUs for
New and Revised Physician’s Current
Procedural Terminology (CPT) Codes
and New Healthcare Common Procedure
Coding System (HCPCS) Codes for 2009
VI. Physician Self-Referral Prohibition:
Annual Update to the List of CPT/
HCPCS Codes
A. General
B. Speech-Language Pathology Services
C. Annual Update to the Code List
VII. Physician Fee Schedule Update for CY
2009
A. Physician Fee Schedule Update
B. The Percentage Change in the Medicare
Economic Index (MEI)
C. The Update Adjustment Factor (UAF)
VIII. Allowed Expenditures for Physicians’
Services and the Sustainable Growth
Rate (SGR)
A. Medicare Sustainable Growth Rate
B. Physicians’ Services
C. Preliminary Estimate of the SGR for
2009
D. Revised Sustainable Growth Rate for
2008
E. Calculation of 2009, 2008, and 2007
Sustainable Growth Rates
IX. Anesthesia and Physician Fee Schedule
Conversion Factors for CY 2009
A. Physician Fee Schedule Conversion
Factor
B. Anesthesia Conversion Factor
X. Telehealth Originating Site Facility Fee
Payment Amount Update
XI. Payment for Certain Durable Medical
Equipment, Prosthetics, Orthotics, and
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Supplies (DMEPOS)—Services Excluded
From Coverage
A. Low Vision Aid Exclusion
B. Replacement of Reasonable Charge
Methodology by Fee Schedules for
Therapeutic Shoes
XII. Provisions of the Final Rule
XIII. Waiver of Proposed Rulemaking and
Delay in Effective Date
XIV. Collection of Information Requirements
XV. Response to Comments
XVI. Regulatory Impact Analysis
Regulation Text
Addendum A—Explanation and Use of
Addendum B
Addendum B—Relative Value Units and
Related Information Used in Determining
Medicare Payments for CY 2009
Addendum C—Codes With Interim RVUs
Addendum D—2009 Geographic Adjustment
Factors (GAFs)
Addendum E—2009 Geographic Practice
Cost Indices (GPCIs) by State and
Medicare Locality
Addendum F—Multiple Procedure Payment
Reduction Code List
Addendum G—CY 2009 ESRD Wage Index
for Urban Areas Based on CBSA Labor
Market Areas
Addendum H—CY 2009 ESRD Wage Index
Based on CBSA Labor Market Areas for
Rural Areas
Addendum I—CPT/HCPCS Imaging Codes
Defined by Section 5102(b) of the DRA
Addendum J—List of CPT/HCPCS Codes
Used To Define Certain Designated
Health Services Under Section 1877 of
the Social Security Act
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
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)
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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
CMHC Community mental health center
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
CSW Clinical social worker
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
EMTALA Emergency Medical Treatment
and Active Labor Act
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
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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
HOPD Hospital outpatient department
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)
MIPPA Medicare Improvements for Patients
and Providers Act of 2008 (Pub. L. 110–
275)
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
NPDB National Practitioner Data Bank
NPI National Provider Identifier
NPP Nonphysician practitioner
NPPES National Plan and Provider
Enumeration System
NQF National Quality Forum
NRC Nuclear Regulatory Commission
NTTAA National Technology Transfer and
Advancement Act of 1995 (Pub. L. 104–
113)
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NUBC National Uniform Billing Committee
OACT [CMS’] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
ODF Open door forum
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
PHP Partial hospitalization program
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POA Present on admission
POC Plan of care
PPI Producer price index
PPS Prospective payment system
PPTA Plasma Protein Therapeutics
Association
PQRI Physician Quality Reporting Initiative
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PSG Polysomnography
PT Physical therapy
ResDAC Research Data Assistance Center
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
SRS Stereotactic radiosurgery
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
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
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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),
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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.
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,
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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 5Year 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
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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 and
2008. This approach is consistent with
the method we used to make BN
adjustments to reflect the changes in the
PE RVUs.
Section 133(b) of the MIPPA amends
section 1848(c)(2)(B) of the Act to
specify that, instead of continuing to
apply the BN adjustor for the 5-Year
Review to work RVUs, the BN
adjustment must be applied to the CF
for years beginning with CY 2009.
Further discussion of this MIPPA
provision as it relates to the CY 2009
PFS can be found in sections III. and IX.
of this final rule with comment period.
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
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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 × GPCI work)
+ (RVU PE × 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
for 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 requirements
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 preliminary
estimate for the sustainable growth rate
(SGR) for CY 2008 is ¥0.1 percent and
the CF for CY 2008 is $34.0682.
However, subsequent to publication of
the CY 2008 PFS final rule with
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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. For the first half
of 2008 (that is, January through June),
the Medicare PFS conversion factor was
$38.0870. In the absence of legislation,
the PFS conversion factor for the second
half of 2008 would have been $34.0682,
as announced in the PFS final rule with
comment period for CY 2008. However,
as a result of the enactment of the
Medicare Improvements for Patients and
Providers Act of 2008 (Pub. L. 110–275)
(MIPPA), the Medicare PFS conversion
factor remained at $38.0870 for the
remaining portion of 2008 (July through
December).
II. Provisions of the Final Rule With
Comment Period
In response to the CY 2009 PFS
proposed rule (73 FR 38502) we
received approximately 4,100 timely
public comments. These included
comments from individual physicians,
health care workers, professional
associations and societies,
manufacturers and Congressmen. The
majority of the comments addressed
proposals related to independent
diagnostic testing facilities, antimarkup, prohibition concerning
providers of sleep tests, and the general
impact of the proposed rule on specific
specialties. To the extent that comments
were outside the scope of the proposed
rule, they are not addressed in this final
rule with comment period.
A. Resource-Based Practice Expense
(PE) Relative Value Units (RVUs)
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
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69731
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—
• 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
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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
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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 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
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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 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 in most instances have accepted. As
a result, the current PE inputs differ
markedly from those originally
recommended by the CPEPs. The PEAC
was replaced by the Practice Expense
Review Committee (PERC) and now
these PE-related activities are addressed
by the AMA RUC PE subcommittee.
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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
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. We then 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 use
the 2007 procedure-specific utilization
data crosswalked to 2009 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
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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.
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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
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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
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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
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 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.
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• 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
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.
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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,
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.
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.
• Work RVUs: The setup file contains
the work RVUs from this final rule.
(iv) Calculate the Final PE RVUs
(vi) Equipment Cost per Minute
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.)
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)
(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
PO 00000
Frm 00010
Fmt 4701
Sfmt 4700
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 $36.0666 which is the CF effective
January 1, 2009 as published in this final
rule.
E:\FR\FM\19NOR2.SGM
19NOR2
(1) Labor cost (Lab) ......
(2) Suppy cost (Sup) ....
(3) Equipment cost
(Eqp).
(4) Direct cost (Dir) .......
(5) Direct adjustment
(Dir Adj).
(6) Adjusted labor .........
(7) Adjusted supplies ....
(8) Adjusted equipment
(9) Adjusted direct ........
(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 ...............
(16) Dir_pct ...................
(17) Ind_pct ...................
(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).
(26) Adjusted Indirect ...
(27) PE RVU .................
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=Lab*Dir Adj ................
=Sup*Dir Adj ...............
=Eqp*Dir Adj ...............
......................................
MFS .............................
=(Lab*Dir Adj)/CF ........
Steps 2–4 ......
Steps 2–4 ......
Steps 2–4 ......
Steps 2–4 ......
Step 5 ............
Step 5 ............
=(Sup*Dir Adj)/CF .......
......................................
See footnote* ..............
Step 1 ............
Steps 2–4 ......
PO 00000
Frm 00011
Fmt 4701
Sfmt 4700
MFS .............................
Surveys .......................
Surveys .......................
See Step 8 ..................
......................................
......................................
......................................
......................................
See footnote** .............
Step 5 ............
Setup File ......
Steps 6, 7 ......
Steps 6, 7 ......
Step 8 ............
Step 8 ............
Step 8 ............
Step 8 ............
Step 8 ............
Steps 9–11 ....
=Ind Alloc * Ind Adj .....
......................................
Step 5 ............
Steps 12–16 ..
Step 17 ..........
Steps 18–19 ..
See Steps 12–16 =
Adj. Ind.
Alloc*PCI .....................
=(Adj Dir+Adj Ind)
*budn.
Steps 9–11 ....
=(Eqp*Dir Adj)/CF .......
Step 5 ............
AMA .............................
AMA .............................
AMA .............................
Source
Step 1 ............
Step 1 ............
Step 1 ............
Step
=(24)*(25) ....................
=((14)+(26)) *budn ......
......................................
......................................
......................................
=(19)+(21) ...................
See (20) ......................
See (18) ......................
See Step 8 ..................
......................................
......................................
......................................
......................................
=(11)+(12)+(13) ...........
=(8)/(10) ......................
=(7)/(10) ......................
=(6)/(10) ......................
=(1)*(5) ........................
=(2)*(5) ........................
=(3)*(5) ........................
=(6)+(7)+(8) .................
......................................
=(1)+(2)+(3) .................
......................................
......................................
......................................
......................................
Formula
0.49
0.77
0.973
0.50
0.337
1.48
0.92
0.56
(15)
0.92
33.8%
66.2%
((14)/(16))*(17)
0.29
0.00
0.05
0.23
$8.33
$1.87
$0.12
$10.32
36.0666
$16.50
0.625
$13.32
$2.98
$0.19
99213
Office visit, est
nonfacility
12.07
13.44
0.976
12.37
0.337
36.70
33.64
3.06
(15)
33.64
32.6%
67.4%
((14)/(16))*(17)
1.48
0.01
0.13
1.34
$48.48
$4.59
$0.41
$53.48
36.0666
$85.51
0.625
$77.52
$7.34
$0.65
33533
CABG, arterial
single facility
0.28
0.57
1.087
0.26
0.337
0.76
0.32
0.44
(15)+(11)
0.22
40.7%
59.3%
((14)/(16))*(17)
0.30
0.14
0.06
0.10
$3.59
$2.12
$5.11
$10.82
36.0666
$17.31
0.625
$5.74
$3.39
$8.17
71020
Chest x-ray nonfacility
0.20
0.49
1.087
0.18
0.337
0.54
0.10
0.44
(11)
—
40.7%
59.3%
((14)/(16))*(17)
0.30
0.14
0.06
0.10
$3.59
$2.12
$5.11
$10.82
36.0666
$17.31
0.625
$5.74
$3.39
$8.17
71020TC
Chest x-ray nonfacility
0.08
0.08
1.087
0.07
0.337
0.22
0.22
—
(15)
0.22
40.7%
59.3%
((14)/(16))*(17)
—
—
—
—
$—
$—
$—
$—
36.0666
$—
0.625
$—
$—
$—
7102026
Chest x-ray nonfacility
TABLE 1—CALCULATION OF PE RVUS UNDER METHODOLOGY FOR SELECTED CODES
0.20
0.33
1.237
0.16
0.337
0.49
0.28
0.21
(15)+(11)
0.17
37.7%
62.3%
((14)/(16))*(17)
0.13
0.00
0.02
0.11
$3.83
$0.75
$0.07
$4.65
36.0666
$7.43
0.625
$6.12
$1.19
$0.12
93000
ECG, complete
nonfacility
0.13
0.26
1.237
0.11
0.337
0.32
0.11
0.21
(11)
—
37.7%
62.3%
((14)/(16))*(17)
0.13
0.00
0.02
0.11
$3.83
$0.75
$0.07
$4.65
36.0666
$7.43
0.625
$6.12
$1.19
$0.12
93005
ECG, tracing
nonfacility
0.07
0.07
1.237
0.06
0.337
0.17
0.17
—
(15)
0.17
37.7%
62.3%
((14)/(16))*(17)
—
—
—
—
$—
$—
$—
$—
36.0666
$—
0.625
$—
$—
$—
93010
ECG, report nonfacility
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2. PE Proposals for CY 2009
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a. RUC Recommendations for Direct PE
Inputs
In the CY 2009 PFS proposed rule, we
agreed with the AMA RUC PE
recommendations for 23 codes except
for the inclusion of the clinical staff for
quality-related activities for 8
immunization injection services (73 FR
38512). The AMA RUC
recommendations and other PE issues
are addressed below.
Immunization Services
We did not accept the AMA RUCrecommended inclusion of 4 minutes of
clinical staff time related to quality
activities (QA) for the 4 immunization
codes for the initial injection: CPT codes
90465, 90467, 90471, and 90473; nor
did we accept the recommended 1
minute of QA time for the 4 ‘‘each
additional’’ subsequent injection for
CPT codes 90466, 90468, 90472 and
90474. As we explained, unlike the
clinical staff time related to quality
activities that is included for
mammography services as required by
the Mammography Quality Standards
Act of 1992 (Pub. L. 102–539) (MQSA),
there is no statutory requirement for
quality-related clinical staff time inputs
for these services.
Comment: We received comments
from individuals and group practice
physicians, specialty societies, the AMA
RUC, the AMA, two State medical
societies, a vaccine manufacturer, a
pharmaceutical research association,
and the National Vaccine Advisory
Committee regarding our omission of
the QA clinical labor time for the
immunization injection codes. These
commenters requested that we add back
the QA clinical time as recommended
by the AMA RUC.
Response: Based on the commenters’
requests, we reexamined the issue. We
have identified clinical QA time
included in other services that is not
based on a statutory requirement. For
many cardiac and vascular ultrasound
services, for example, QA time is
included because it is directly related to
compliance with accreditation
requirements. After our review, we
believe there was evidence to support
the inclusion of this QA time in this
case in order to comply with State and
Federal regulatory guidelines. We have
revised the PE database to reflect QA
time for these immunization services.
Comment: Other commenters
representing specialty societies
supported our acceptance of the AMA
RUC recommendations for the 15 other
services identified in Table 2 of the
proposed rule.
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Response: We have finalized the AMA
RUC PE recommendations for these
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
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 proposed 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.
PO 00000
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Comment: The majority of comments
received supported our proposal to
assign the standard 50 percent
utilization rate to CPT codes 93012 and
93271. Other comments disagreed with
our proposal and described it as an
arbitrary method for changing
equipment utilization rates. Many
commenters suggested that we should
develop a survey process that would
obtain service specific utilization rates
for all PFS services.
Response: We agree with the
commenters that support assigning the
standard 50 percent equipment
utilization rate to CPT codes 93012 and
93271 and we will finalize our proposal
to use the standard 50 percent
utilization rate for CPT codes 93012 and
93271. Although we did not make any
proposals related to a comprehensive
survey of services specific equipment
costs, we plan to continue to work with
interested parties to analyze the
possibilities for potential inclusion in a
future rulemaking cycle.
c. Change to PE Database Inputs for
Certain Cardiac Stress Tests
In the CY 2009 PFS proposed rule, we
proposed to change the PE database for
CPT code 93025, Microvolt T-wave
alternans for assessment of ventricular
arrhythmias, to make the clinical labor
staff type consistent with the other
cardiac stress tests, CPT codes 93015
and 93017. In addition, we proposed to
add the specific Microvolt T-wave
testing equipment in place of the
cardiac stress testing treadmill devices,
as well as to revise the time-in-use for
the equipment in CPT 93025 to reflect
the service period. We also proposed to
apply similar revisions to the equipment
time-in-use to the other 2 CPT codes,
CPT codes 93015 and 93017.
Comment: The manufacturer of the
equipment technology and the specialty
society were supportive of these
proposed changes. In addition, the AMA
RUC noted that it would address this
issue at the 2008 October AMA RUC
meeting.
Response: We have received and
accepted the AMA RUC
recommendations for CPT 93025, 93015
and 93017 which support all of the
changes in our proposal. The PE
database is revised to reflect these
changes.
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 for the facility and
nonfacility settings that are used in
determining payment under the PFS.
Section 414.22(b)(5)(i)(A) discusses
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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 proposed to revise
§ 414.22(b)(5)(i)(A) and (B) to remove
this language.
We received no comments on our
proposed technical change and have
revised the regulations at
§ 414.22(b)(5)(i)(A) and (B) as proposed.
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e. Other PE Direct Input Issues
(i) Removal of Conscious Sedation
(CS) PE Inputs for Services in Which CS
is not Inherent—Technical Correction
In reviewing the PE database, we
noted that the conscious sedation (CS)
PE inputs for 12 CPT codes in which CS
is not inherent had not been removed
after CPT 2005 began identifying these
codes in a separate Addendum. The CS
inputs for CPT codes 19300, 22520,
22521, 31717, 62263, 62264, 62268,
62269, 63610, 64585, 64590, and 64595
had been added by the AMA RUC’s
PEAC prior to CY 2005. At that time, the
AMA RUC recommended deletion of the
CS PE inputs for all procedures that
were not identified in the CPT 2005
manual Addendum which lists the
services in which CS is inherent; and
thus include the associated direct PE
inputs. Due to a technical error, these
inputs were not removed for CY 2005.
We have removed the CS PE inputs for
the 12 CPT codes noted above. We ask
that the AMA RUC permit specialty
societies to bring any CPT codes
forward to either the February or April
2009 AMA RUC meetings should any
other discrepancies between the CPT
Addendum and the PE database be
identified.
(ii) Jejunostomy Tube Price
A comment received on the CY 2009
PFS proposed rule stated that we had
mistakenly entered the price for a set of
2, rather than just 1, jejunostomy tube
in each of the following CPT codes
49441, 49446, 49451, and 49452. So that
the price of this PE supply can be
properly valued as part of the PE RVUs
for each of the four services in which it
is found, we have changed the price of
this supply from $198 to $97.50 in CPT
codes 49441, 49446, 49451, and 49452.
In addition, because it’s correct price is
less than $150, this item was
erroneously placed on the list for repricing of higher-cost supplies on Table
29 in the proposed rule; and, as a result
of this price correction, it has been
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removed from the list of supply items in
need of repricing.
(iii) Supply Code SH079, Collagen,
Dermal Implant (2.5ml uou) (Contigen)
We received comments from a
specialty society representing urologists
noting that the dermal collagen implant,
priced at $317, was an inappropriate
supply input for CPT 52330. The
specialty society asked that we remove
this supply from this service. We agree
that inclusion of the dermal collagen
implant as a supply input for CPT code
52330 is not appropriate. The PE RVUs
for CPT 52330 reflect the removal of this
supply item.
(iv) Contractor Pricing of CPT 77371 for
Stereotactic Radiosurgery (SRS)
Treatment Delivery
CPT code 77371, Radiation treatment
delivery, stereotactic radiosurgery (SRS)
(complete course of treatment of
cerebral lesion(s) consisting of one
session); multi-source Cobalt 60 based,
(more commonly known as Gamma
Knife) was a new CPT code for CY 2007.
At that time, we accepted nearly all of
the AMA RUC PE recommendations for
this procedure (we did not accept the
Cobalt 60 radiation source as a direct PE
input) during CY 2007 rulemaking, and
these recommendations are reflected in
the PE RVUs for CPT 77371. The PE
inputs for CPT 77371 had been
proposed by the sitting AMA RUC
specialty society representing
therapeutic radiation oncology
physicians. The AMA RUC discussed
and amended the specialty’s proposal
for direct PE inputs (particularly the
amount of clinical labor time) prior to
agreeing on the final AMA RUC
recommendation that was forwarded to
CMS for CY 2007. Due to the equipment
expense (nearly $4 million) along with
the many Nuclear Regulatory
Commission (NRC) requirements for
construction of the facility required to
furnish these procedures, all but one of
these facilities is connected with a
hospital setting, leaving a single freestanding nonfacility provider.
Comment: We received 3 comments
stating that the PE RVUs listed in
Addendum B for CPT 77371 are
exceptionally inadequate. All
commenters, including the single
freestanding nonfacility based provider,
noted the difference in payments
between those made under OPPS and
the PFS for CPT 77371. For CY 2009, the
commenters noted that the proposed
OPPS payment is $7,608 and the PFS
payment under the proposed rule would
be $1,260. A freestanding nonfacility
provider noted that it had worked with
the Medicare contractor but was
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69737
unsuccessful in securing a higher
payment because the contractor could
not deviate from the established PE
RVUs. Two commenters also stated that
they believe the direct PE inputs are
incorrect since the cost data they had
gathered from other facility providers of
this stereotactic radiosurgery (SRS)
service included extra clinical labor
time due to Nuclear Regulatory
Commission (NRC) requirements for
both the physicist and the registered
nurse. In addition, they disagreed with
our decision to treat the Cobalt 60
radiation source (recommended by the
AMA RUC as a 1-month renewable
equipment item) as an indirect PE cost
in the CY 2007 PFS final rule with
comment period. The commenters have
asked us to contractor-price CPT 77371
for CY 2009 if a payment correction
cannot be made in the final rule.
Response: We will ask the AMA RUC
to review the direct PE inputs for this
code in light of these comments. In the
interim, we believe the commenters
have raised sufficient questions
regarding the propriety of the direct PE
inputs and PE RVUs established for this
new code in 2007 to warrant contractorpricing for CPT 77371 for CY 2009.
f. Supply and Equipment Items Needing
Specialty Input
We have identified some supply and
equipment items from the CY 2008 final
rule with comment period for which we
were unable to verify the pricing
information (see Table 2: Items Needing
Specialty Input for Pricing and Table 3:
Equipment Items Needing Specialty
Input for Pricing). For the items listed
in Tables 2 and 3, we are requesting that
commenters provide pricing
information. In addition, we are
requesting acceptable documentation, as
described in the footnote to each table,
to support the recommended prices. For
supplies or equipment that previously
appeared on these lists, we may propose
to delete these items unless we receive
adequate information to support current
pricing by the conclusion of the
comment period for this final rule.
In Tables 4 and 5, we have listed
specific supplies and equipment items
related to new CY 2009 CPT codes that
are discussed in section V. of this final
rule with comment period. We have
added these items to the PE database
along with the associated prices (on an
interim basis). We plan to propose
finalized pricing information in the CY
2010 PFS proposed rule. Item prices
identified in these tables are also
reflected in the PE RVUs in Addendum
B. In addition, we have asked
commenters to submit specific
information in response to the
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
discussion of the supply and equipment
items for some each of the new CPT
codes in section V. of this final rule
with comment period. We have also
specifically asked for public comment
about the direct cost inputs for the 3
new 2009 CPT codes which we
contractor-priced for CY 2009 (CPT
codes 93229, 93299, and 95803).
TABLE 2—SUPPLY ITEMS NEEDING SPECIALTY INPUT FOR PRICING
Code
2008/9 Description
Unit
price
Unit
Primary
Associated
Specialties
Urology, Radiology,
Interventional
Radiology.
Urology, Radiology,
Interventional
Radiology.
Radiation Oncology
Gas, argon,
cryoablation.
..............
Gas, helium,
cryoablation.
...........................
..............
Sealant spray ........
oz ...........................
..............
Catheter, Kumpe ...
Item .......................
..............
Disposable aspirating syringe.
Guidewire, angle
tip (Terumo), 180
cm.1
Snare, Nitinol
(Amplatz).
SL119 .....
...........................
...........................
..............
...........................
..............
Item .......................
..............
Associated
* CPT code(s)
Prior item status
on table
Commenter
response and CMS
action
2009 Item
status refer to
note(s)
50395
YES ....................
New item 2008 ......
A, D.
50395
YES ....................
New item 2008 ......
A, D.
77333
YES ....................
B.
50385, 50386
YES ....................
No comments received.
New item 2008 ......
A, D.
21073
YES ....................
New item 2008 ......
A, D.
50385, 50386
YES ....................
New item 2008 ......
A, D.
50385, 50386
YES ....................
New item 2008 ......
A, D.
64632
NO ......................
New item 2009 ......
A.
20697
NO ......................
New item 2009 ......
A.
NA ..........
Agent, neurolytic ...
ml ...........................
..............
NA ..........
Strut, replacement,
dynamic external.
Tube, anaerobic
culture.
Tube, jejunsostomy
Item .......................
1151
Radiology, Interventional Radiology.
Oral and Maxillofacial Surgery.
Radiology, Interventional Radiology.
Radiology, Interventional Radiology.
Orthopedic Surgery, Podiatry.
...........................
Item .......................
..............
62267 ....................
Lab
NO ......................
New item 2009 ......
A, B.
Item .......................
97.50
49441, 49446,
49451 and 49452.
Accessory
NO ......................
Price changed/
CMS error. $195
price for 2 Jtubes. $97.50 accepted.
C.
NA ..........
NA ..........
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
Note: Acceptable documentation includes detailed description (including system, kit or product components), source (multiple sources requested), and current pricing information. For most items, there will be multiple sources of documentation available—multiple products/models that can be used as acceptable substitutes in
performing a procedure. We ask that documentation from multiple sources be submitted with verified prices of the various products which represent the price range.
In these instances, only one specific item/model/product is available on the market for use in a given procedure, one source of documentation is required. However,
CMS expects that all documentation reflect the market price for each product reflecting the manufacturer or vendor discounts, rebates, etc. Invoices from physician
purchases are the preferred documentation. In cases where this is not possible, CMS may accept other documentation such as copies of catalog pages, hard copy
from specific Web pages, physician invoices, and typical or average sales price ‘‘quotes’’ (letter format okay) from manufacturers, vendors, or distributors. Unacceptable documentation includes phone numbers and addresses of manufacturer, vendors or distributors, Web site links without pricing information, etc.
A. Additional documentation required. Need detailed description (including ‘‘kit’’, system, or product contents and component parts), source, and current pricing information (including pricing per specified unit of measure in database).
B. No/Insufficient information received. Where applicable, retained price in database on an interim basis. Forward acceptable documentation promptly.
C. Submitted price accepted.
D. 2008/9 price retained on an interim basis. Forward acceptable documentation promptly.
TABLE 3—EQUIPMENT ITEMS NEEDING SPECIALTY INPUT FOR PRICING
Code
2008/9 Description
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Camera mountfloor.
Cross slide attachment.
Plasma pheresis
machine.
ED039
Psychology Testing
Equipment.
Strobe, 400 watts
(Studio)(2).
Cryosurgery system (for tumor
ablation).1
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Primary specialties
associated with
item
* CPT
code(s) associated with
item
2300
Dermatology ..........
500
2008/9
Price
37,900
Prior status
on table
Commenter
response and
CMS action
96904
Yes ...............
Dermatology ..........
96904
Yes ...............
Radiology, Dermatology.
36481,
G0341
Yes ...............
Specialty to submit,
asap.
Specialty to submit,
asap.
Revised description
based on comments received
that light source
was not part of
item. Documentation requested.
Specialty to submit,
asap.
Documentation requested.
New item 2008 ......
................
Psychology ............
96101, 96102
Yes ...............
1500
Dermatology ..........
96904
Yes ...............
................
Urology, Radiology,
Interventional
Radiology.
50593
Yes ...............
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2009 Item status
refer to note(s)
A and D.
A and D.
B.
B.
B.
A and D.
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
69739
TABLE 3—EQUIPMENT ITEMS NEEDING SPECIALTY INPUT FOR PRICING—Continued
Code
* CPT
code(s) associated with
item
85000
Cardiology .............
3659.50
Workstation, dual,
echocardiography.
EQ136
Primary specialties
associated with
item
..........................
2008/9
Price
2008/9 Description
Infrared Coagulator
(with hand applicator, includes
light guide).
Prior status
on table
Commenter
response and
CMS action
93351
No .................
46606,
46608,
46610,
46612, 46930
No .................
New item 2009,
Specialty submitted
$173,509—CMS
accept $85,000.
New price for 2009
with addition of
light guide, Supply code, Eq136,
descriptor
changed to include the light
guide.
2009 Item status
refer to note(s)
E.
E.
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
Note: Acceptable documentation includes detailed description (including system, kit or product components), source (multiple sources requested), and current pricing information. For most items, there will be multiple sources of documentation available—multiple products/models
that can be used as acceptable substitutes in performing a procedure. We ask that documentation from multiple sources be submitted with
verified prices of the various products which represent the price range. In these instances, only one specific item/model/product is available on
the market for use in a given procedure, one source of documentation is required. However, CMS expects that all documentation reflect the market price for each product reflecting the manufacturer or vendor discounts, rebates, etc. Invoices from physician purchases are the preferred documentation. In cases where this is not possible, CMS may accept other documentation such as copies of catalog pages, hard copy from specific
Web pages, physician invoices, and typical or average sales price ‘‘quotes’’ (letter format okay) from manufacturers, vendors, or distributors. Unacceptable documentation includes phone numbers and addresses of manufacturer, vendors or distributors, Web site links without pricing information, etc.
A. Additional documentation required. Need detailed description (including kit contents), source, and current pricing information (including pricing per specified unit of measure in database). Accept copies of catalog pages or hard copy from specific Web pages. Phone numbers or addresses of manufacturer, vendors, or distributors are not acceptable documentation.
B. No/Insufficient received. Retained price in database on an interim basis. Forward acceptable documentation promptly.
C. Submitted price accepted.
D. 2008/9 price, where specified, retained on an interim basis. Forward acceptable documentation promptly.
E. See discussion in section V. of this final rule with comment period. Forward requested documentation promptly, for example, whether item is
typical.
TABLE 4—PRACTICE EXPENSE SUPPLY ITEM ADDITIONS FOR CY 2009
Equip code
Supply description
Unit
Unit
price
* CPT code(s) associated with item
Supply category
NA ......................
NA ......................
NA ......................
Agent, neurolytic ............................
IV infusion set, Sof-set (Minimed)
Strut, replacement, dynamic external.
Swab, patient prep, 1.5 ml
(chloraprep).
Tube, anaerobic culture .................
Tube, jejunsostomy .......................
ml .......................
Item ....................
Item ....................
..............
11.5
1151
64632 .................
96369 and 96371
20697 .................
Pharmacy, Rx ....
Hypodermic, IV ..
Accessory ..........
A, B and D.
B.
A.
Item ....................
1.04
93352 .................
B.
Item ....................
Item ....................
..............
97.50
62267 .................
49441, 49446,
49451 and
49452.
Pharmacy,
NonRx.
Lab .....................
Accessory ..........
NA ......................
NA ......................
NA ......................
Comments
A.
A and C.
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
A. Price verification needed. Item(s) added to table of supplies requiring specialty input.
B. Request explanation/rationale as to why specific supply is necessary, how it differs from current PE database item, and why current PE
item(s) cannot be used for procedure(s).
C. CMS price correction.
D. Also, see discussion in section V. of this final rule with comment period. Proxy in use on an interim basis: SH062 Sclerosing solution, inj.
TABLE 5—PRACTICE EXPENSE EQUIPMENT ITEM ADDITIONS FOR CY 2009
Equip
life
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Item code
Equipment description
NA ...............
Workstation, dual, echocardiography.
Pacemaker, Interrogation,
System (CMS used Pacemaker, Monitoring, System
as proxy for price).
NA ...............
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Unit price
* CPT code(s) associated
with item
Supply or equipment
category
5
85000
93351 .................................
DOCUMENTATION ...........
A and D.
5
123250
93693 and 93696 ..............
OTHER EQUIPMENT .......
B and D.
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TABLE 5—PRACTICE EXPENSE EQUIPMENT ITEM ADDITIONS FOR CY 2009—Continued
Item code
Equip
life
Equipment description
EQ198 .........
Pacemaker follow-up system
(incl software and hardware) (Paceart).
EQ136 .........
7
Infrared Coagulator (with hand
applicator, includes light
guide).
10
* CPT code(s) associated
with item
Unit price
23507
3659.50
93279, 93280, 93281,
93282, 93284, 93285,
93286, 93287, 93288,
93289, 93290, 93291,
93292, 93724.
46606, 46608, 46610,
46612, 46930.
Supply or equipment
category
Comments
OTHER EQUIPMENT .......
C and D.
OTHER EQUIPMENT .......
A and D.
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
A. Price verification needed. Item(s) added to table of equipment requiring specialty input.
B. Interim value, CY 2009 only. CMS assigned the pacemaker monitoring system to these two CPT codes that the specialty association requested a pacemaker ‘‘interrogation’’ system. Since the CMS PE database does not contain such an item, we assigned, on an interim basis, the
pacemaker monitoring system that was assigned to these 2 codes previously. Although we remain uncertain as to the appropriate equipment that
should be assigned, we will work with the specialty as they provide us with more information and documentation for the typical equipment needed for these 2 services when provided in the physician’s office.
C. Interim value, CY 2009 only. CMS assigned EQ198 to all new cardiac monitoring codes for CY 2009 because the crosswalked codes (for
CY 2008) each contained the equipment item EQ198. While the specialty requested the ‘‘pacemaker monitoring system’’ for these services, CMS
was not provided any information to support the change in technology for these services provided in the physician’s office setting.
D. Also, see discussion in Section V. of this final rule with comment period.
B. Geographic Practice Cost Indices
(GPCI): Locality Discussion
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1. Update
Section 1848(e)(1)(A) of the Act
requires us to develop separate
Geographic Practice Cost Indices
(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), we established new GPCIs for
each Medicare locality in CY 2008 and
implemented them. The CY 2008
adjustment to the GPCIs reflected the
first year of the 2-year phase-in.
We noted in the CY 2009 PFS
proposed rule (73 FR 38513), that the
physician work GPCIs we calculated did
not reflect the 1.000 floor that was in
place during CY 2006 through June 30,
2008. However, as discussed in section
III. of this preamble, section 134 of the
MIPPA of 2008 extended the 1.000 work
GPCI floor from July 1, 2008, through
December 31, 2009. Additionally,
section 134(b) of the MIPPA sets a
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permanent 1.500 work GPCI floor in
Alaska for services furnished beginning
January 1, 2009. As such, the CY 2009
GPCIs and summarized GAFs reflect
these statutorily mandated work GPCI
floors.
See Addenda D and E for the 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
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,
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,
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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 in 1992.
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
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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
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 subsequent final rule
(61 FR 59494).
Although there have been no changes
to the locality structure since 1997, we
have proposed changes in recent years,
although we did not finalize them. 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, and consideration of potential
alternatives.
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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 PFS
proposed rule, we described three
options for changing the payment
localities in California. For a detailed
discussion of the options for changing
the payment localities in California, see
the CY 2008 PFS proposed rule and
final rule with comment period (72 FR
38139 and 72 FR 66245, respectively).
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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 intended
to 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.
b. Alternative Payment Locality
Approaches
In the CY 2009 PFS proposed rule, we
explained that as a follow-up to the CY
2008 PFS final rule with comment
period, we 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. We also stated that we are
not making any changes to our payment
localities at this time. For a discussion
of the alternative payment locality
configurations currently under
consideration, see the CY 2009 PFS
proposed rule (73 FR 38514).
Our preliminary study of several
options for revising the payment
localities was posted on the CMS Web
site on August 21, 2008. The report
entitled, ‘‘Review of Alternative GPCI
Payment Locality Structures’’, which
was produced by Acumen, LLC under
contract to CMS, is accessible from the
PFS Federal regulation notices Web
page under the download section of the
CY 2009 PFS proposed rule (CMS–
1403–P). The report may also be
accessed directly from the following
link: https://www.cms.hhs.gov/
PhysicianFeeSched/downloads/
ReviewOfAltGPCIs.pdf. Comments on
the interim report were accepted
through November 3, 2008.
In the CY 2009 PFS proposed rule and
on the CMS Web site, we encouraged
interested parties to submit comments
on the options presented in the
proposed rule and in our interim report.
We also requested comments on the
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69741
administrative and operational issues
associated with each option, as well as
suggestions for other options.
Comment: We received comments on
the options discussed in the proposed
rule from various specialty groups and
medical societies, as well as a few group
practices and individual practitioners.
Generally, commenters commended us
for acknowledging the need for
intermittent reconfiguration of PFS
payment localities and expressed
support for our study of alternative
locality configurations. Some
commenters urged us to expedite
changes in our payment localities and
suggested that we do so as part of the
CY 2009 final rule. Other commenters
requested that, in any locality
reconfiguration, we minimize the
payment discrepancy between urban
and rural areas to ensure continued
access to care.
Response: We would like to thank the
public for the comments submitted on
the options presented in the proposed
rule and in the interim report posted on
the CMS Web site. We will summarize
all comments received in future
rulemaking. As we have stated
previously, we will provide extensive
opportunities for public comment (for
example, town hall meetings or open
door forums, as well as a proposed rule)
on any specific proposals for changes to
the locality configuration before
implementing any changes.
C. Malpractice RVUs (PC/TC Issue)
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 TC MP RVUs that are
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greater than the PC MP RVUs. The PLI
workgroup requested that we make
changes to these MP RVUs and
suggested that it is illogical for the MP
RVUs for the TC of a service to be higher
than the MP RVUs for the PC.
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 such a change. We asked for
information about how, and if,
technicians employed by facilities
purchase PLI or how their professional
liability is covered. We also asked for
comments on what types of PLI are
carried by facilities that perform these
technical services.
In the CY 2008 PFS final rule with
comment period (72 FR 66248), one
commenter suggested that we ‘‘flip’’ the
MP RVUs between the PCs and TCs, or
make them equal. Reversing the RVUs
would reduce the MP RVUs for the TC
and increase the MP RVUs for 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.
We responded 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 has
undergone a resource-based review, is
derived from actual data, and is
consistent with the resource-based
methodology for PFS payments. We
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.
We also noted that we have received
several comments supporting the
decision to examine the possibility of
developing a resource-based
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.
We stated that we would continue to
solicit, collect, and analyze appropriate
data on this subject. We noted 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.
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In the CY 2009 PFS proposed rule (73
FR 38515), we stated that the issue of
assigning MP RVUs for the TC of certain
services continues to be a source of
concern for several physician
associations and for CMS. We noted that
we did not receive a response to our CY
2008 request for additional data on this
issue and that this issue is one of
importance to CMS. We also stated that
the lack of available PLI data affects our
ability to make a resource-based
evaluation of the TC MP RVUs for these
codes. We indicated that as part of our
work to update the MP RVUs in CY
2010, we would instruct our contractor
to research available data sources for the
MP costs associated with the TC portion
of these codes and that we would also
ask the contractor to look at what is
included in general liability insurance
versus PLI for physicians and other
professional staff. We also stated that if
data sources are available, we would
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.
The following is a summary of the
comments we received on the CY 2009
PFS proposed rule and our responses.
Comment: Most commenters opposed
any change to the MP RVUs that would
make the TC MP RVUs zero. The
commenters stated that there are
identifiable MP expenses associated
with allied health professionals and that
for many radiation oncology centers
there are separate MP insurance policies
for the radiation oncologists and the
nonphysician clinical personnel. The
commenters requested that we ensure
that the liability insurance associated
with the nonphysician personnel is
reflected in the MP RVUs for technical
services. The commenters also stated
that these expenses do not represent
general insurance liability premiums
which are part of the PE RVUs. The
commenters were supportive of our plan
for researching data sources for MP
premium data for the TC of these codes.
One commenter provided the name of a
company that provides liability
insurance to imaging facilities.
Other commenters, including the
AMA, proposed that CMS reduce to zero
the TC MP RVUs associated with the
codes identified as having higher TC MP
RVUs than PC MP RVUs. The
commenters stated that any premium
data received would represent general
liability insurance, not liability
insurance premium data related to
nonphysician clinical personnel. The
commenters suggested that premium
data does not exist to support a
resource-based computation of the MP
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RVUs for the TC and stated that general
liability insurance premiums are
included in the PE component and
should not be part of the MP RVU
calculation.
Response: We appreciate the
comments in support of our proposal to
instruct our contractor to research
available data sources for the MP costs
associated with the TC portions of these
codes. As we stated in the CY 2008 PFS
final rule with comment period (72 FR
66248), we are not able to evaluate
whether sufficient data exists or to make
a judgment on the RUC’s assertion that
such data are not available. It is possible
that the contractor responsible for
collecting the data for the 5-year MP
RVU update will identify providers of
professional liability insurance for
nonphysician clinical personnel. We
plan to share the information received
on a potential source of such data with
our contractor. If such premium data
can be identified, it will be incorporated
into the MP RVU update. In the event
that we adopt such data, we will ensure
there is no duplication of costs between
the PE and the MP RVUs. As noted in
the CY 2009 PFS proposed rule, and
discussed above in this section, we will
be addressing this issue as part of the
update to the malpractice RVUs for CY
2010.
D. Medicare Telehealth Services
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
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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.
• 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. Each request for adding a service
to the list of Medicare telehealth
services must include any supporting
documentation you wish us to consider
as we review the request. Because we
use the annual PFS as a vehicle for
making changes to the list of Medicare
telehealth services, requestors should be
advised that any information submitted
is subject to disclosure for this purpose.
For more information on submitting a
request for an addition to the list of
Medicare telehealth services, including
where to directly mail these requests,
visit our Web site at https://
www.cms.hhs.gov/telehealth/.
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
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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. In the CY
2009 PFS proposed rule (73 FR 38515),
we responded to these requests. We did
not propose to add DSMT or critical
care services to the list of Medicare
telehealth services. We proposed to
create HCPCS codes specific to followup inpatient consultations delivered via
telehealth, and we proposed to revise
§ 410.78 and § 414.65 to revise our
regulations accordingly. The following
is a summary of the discussion from the
proposed rule and a summary of the
comments we received and our
responses.
a. Diabetes Self-Management Training
(DSMT)
The American Telemedicine
Association (ATA) and the Marshfield
Clinic submitted a request to add
individual and group diabetes self
management training (DSMT) (as
represented by Healthcare Common
Procedure Coding System (HCPCS)
codes G0108 and G0109) to the list of
approved telehealth services. The
requesters believe that DSMT services
can be considered and approved for
telehealth as Category 1 services
because they are comparable to medical
nutrition therapy (MNT) services
approved for telehealth.
As discussed in the CY 2009 PFS
proposed rule (73 FR 38516), § 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). In
addition, group counseling services
have a different interactive dynamic
between the physician or practitioner at
the distant site and beneficiary at the
originating site as compared to services
on the current list of Medicare
telehealth services. (See 70 FR 45787
and 70 FR 70157 for a previous
discussion of group services.) 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.
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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 self
administration 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 needed to evaluate whether these are
services for which telehealth can be an
adequate substitute for a face to face
encounter. After reviewing studies
submitted with the request, we
determined that we do not have
sufficient comparative analysis that
either individual or group DSMT
delivered via telecommunications is
equivalent to DSMT delivered face to
face. We did not find evidence that
providing DSMT via telehealth is an
adequate substitute for providing DSMT
in person. Therefore, we proposed not
to add individual and group DSMT (as
described by HCPCS codes G0108 and
G0109) to the list of approved telehealth
services.
Comment: Some commenters
disagreed with our proposal and noted
that adding DSMT to the list of
approved telehealth services would
provide a physician or practitioner with
an additional tool for supporting patient
compliance with management of
diabetes. One commenter acknowledged
that training patients in the selfadministration of injectable drugs, a
required component of DSMT programs,
would be difficult to perform via
telehealth. However, the commenter
disagreed that this concern should
prevent diabetes patients from accessing
the DSMT benefit through telehealth.
The commenter believes that educating
a patient on diet, exercise, medications,
managing stress and illness, and
managing blood sugar can be taught via
telehealth.
Another commenter agreed that
telehealth should not serve as a
substitute for initial DSMT training that
may involve hands-on teaching of
injectable medications or appropriate
usage of glucose monitors. However, the
commenter believes that follow-up
telehealth encounters can help to
quickly identify any potential problems
or health concerns.
Response: The request we received
was to add individual and group DSMT
as described by HCPCS codes G0108
and G0109 to the list of Medicare
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telehealth services. As discussed above,
teaching beneficiaries the skills
necessary for the self administration of
injectable drugs is a statutorily required
element of DSMT (and is typically
provided as part of an individual DSMT
session). This skill based training is
typically not a component of any of the
current Medicare telehealth services.
Group DSMT (which comprises the
vast majority of DSMT; initial and
follow up) is by definition furnished in
a group setting and, therefore, the
interactive dynamic is not similar to any
existing telehealth service. No group
services are approved for telehealth. For
more information on our review of the
use of telehealth to furnish group
services, see the CY 2006 PFS proposed
rule (70 FR 45787).
In order to consider addition of
services for Medicare telehealth that are
not similar to the existing list of
telehealth services, we require
comparative studies showing that the
use of an interactive audio and video
telecommunications system is an
adequate substitute for the in person
(face-to-face) delivery of the requested
service. To date, requestors have not
submitted sufficient comparative
analyses supporting the approval of skill
based training (such as teaching a
patient how to administer self-injectable
drugs) for telehealth. Likewise,
requestors have not submitted
comparative analyses showing that the
use of a telecommunications system is
an adequate substitute for group
counseling services (DSMT or
otherwise) furnished in person.
We agree with the commenters that
skill-based training, such as teaching
patients how to inject insulin, would be
difficult to accomplish without the
physical in person presence of the
teaching practitioner. However, we
disagree that this training element
should be carved out of individual (or
group) DSMT for purposes of providing
Medicare telehealth services. The skillbased training involved in teaching
beneficiaries the skills necessary for the
self-administration of injectable drugs is
a key component of this statutorily
defined benefit (and therefore inherent
in the codes that describe DSMT). We
do not believe that it would be
appropriate to carve out this statutorily
required component of DSMT for
purposes of telehealth.
b. Critical Care Services
The (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
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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 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.’’
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
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 needed to
evaluate whether these are services for
which telehealth can be an adequate
substitute for a face-to-face encounter.
We had 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 did not
propose to add critical care services (as
defined by HCPCS codes 99291 and
99292) to the list of approved telehealth
services.
Comment: UPMC submitted a detailed
description of their experiences using
telehealth to support the treatment of
acute stroke patients and provided
supporting studies describing the use of
telemedicine in remote stroke
assessment. Per their comment, remote
stroke assessment has specific and
unique clinical importance because an
urgent decision, based in part on a
neurological examination, must be made
regarding the administration of
thrombolytic therapy within 3 hours of
the onset of stroke symptoms. The
elements of remote stroke assessment
involve discrete interactions between
physicians and patients, and the
consultative input of specialists
experienced in acute stroke treatment is
considered in directing the bedside care
of the patient.
Some commenters were concerned
that our proposal will not permit the use
of telehealth to treat critically ill
patients. We received comments and
supporting documentation regarding the
feasibility and value of providing
consultations via telehealth to patients
who are critically ill.
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Response: Consultations are already
included on the list of approved
telehealth services. Our proposal not to
add critical care services (as defined by
99291 and 99292) to the list of Medicare
telehealth services does not preclude
physicians or NPPs from providing
medically necessary and clinically
appropriate telehealth consultations to
patients who are critically ill. We
believe that permitting initial and
follow up inpatient consultation via
telehealth will help provide greater
access to specialty care for critically ill
patients (including stroke patients). If
guidance or advice is needed regarding
a critically ill patient, a consultation
may be requested from an appropriate
source and may be furnished as a
telehealth service. (See the CMS
Internet-Only Medicare Claims
Processing Manual, Chapter 12, Section
30.6.10 for more information on
Medicare policy regarding payment for
consultation services.)
In support of the request to approve
critical care services (as described by
HCPCS codes 99291 through 99292),
UPMC provided comparative analyses
involving the use of an interactive audio
and video telecommunications system
as a substitute for an in-person (face-toface) clinical assessment. However, the
focus of these studies was limited to
stroke patients (critical care services
include a broad range of disease
categories). Additionally, one study
recruited clinically stable patients. This
study noted that ‘‘because of the
subacute nature of our test bed, the
current data must be considered
preliminary in determining their
potential impact on actual clinical
decision making.’’ The same study also
noted that although the use of telehealth
‘‘may expedite stroke-related decision
making, it cannot and should not be
thought of as a substitute for the
comprehensive clinical evaluation of
the acute stroke patient, including
thorough medical and cardiac
evaluations.’’ In another study
submitted, the patients selected were
not randomized.
Comment: A few commenters
supported our proposal not to add
critical care services to the list of
Medicare approved telehealth services.
The commenters believe that, within the
current standards of practice, critical
care services require the physical
presence of the physician rendering the
critical care services.
We received approximately 20
comments expressing opposition to our
proposal not to add critical care services
to the list of Medicare approved
telehealth services which distinguished
between their use of telehealth for
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critical care services and the use of
telehealth for remote stroke
assessments, as described in the original
request. Many of the commenters
characterized our proposal as a ‘‘noncoverage determination’’ of remote
critical care services and described an
intensive care unit (ICU) model that
integrates continuous surveillance of the
ICU with an electronic medical records
interface. This model is also
programmed to automatically prompt
the physician to rapidly respond and
intervene in the event of certain changes
in a patient’s physiological status. Many
of these commenters included
documentation and references to studies
that the adoption of this model reduced
medical errors; enhanced patient safety;
reduced complications; decreased
overall length of stay in the ICU; and
resulted in a statistically significant
decrease in ICU mortality in comparison
to the traditional ICU model. The
commenters also noted that patient
outcomes have been equivalent if not
superior to patient outcomes prior to
adopting this model of care.
The American Medical Association
(AMA) recently developed Category III
tracking codes for remote critical care
services (0188T–0189T). Two specialty
societies commented that they are
working with other critical care
organizations to collect and analyze data
on remote critical care services, as
requested by the CPT editorial panel.
Response: In the CY 2009 PFS
proposed rule, we explained that we
have no evidence suggesting that the use
of telehealth could be a reasonable
surrogate for the face-to-face delivery of
critical care services, as defined by
HCPCS codes 99291 and 99292. We
agree with the comments that, within
the current standards of practice, critical
care services require the physical
presence of the physician rendering the
critical care services.
Our proposal not to add critical care
services to the list of approved
telehealth services for Medicare was in
no way a ‘‘non-coverage determination’’
for remote critical care services
described by the AMA’s Category III
tracking codes, 0188T–0189T.
Consistent with the AMA’s creation of
those tracking codes, we believe that
remote critical care services are different
from the telehealth delivery of critical
care services (as defined by CPT codes
99291 through 99292). Category III CPT
codes track utilization of a service,
facilitating data collection on, and
assessment of new services and
procedures. We believe that the data
collected for these tracking codes will
help provide useful information on how
to best categorize and value remote
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critical care services in the future.
However, at the present time, we do not
have sufficient evidence that the
provision of critical care services (as
represented by HCPCS codes 99291 and
99292) via telehealth is an adequate
substitute for an in person (face-to-face)
encounter.
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 subsequent 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 followup 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).
In the CY 2009 PFS proposed rule, we
proposed 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.
We proposed that the new HCPCS codes
would be limited to the range of services
included in the scope of the previous
CPT codes for follow-up inpatient
consultations, and the descriptions
would be modified to limit the use of
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such services for telehealth. The HCPCS
codes would clearly designate these
services as follow-up inpatient
consultations provided via telehealth,
and not subsequent hospital care used
for inpatient visits. Utilization of these
codes would allow for payment for
these services, as well as enable us to
monitor whether the codes are used
appropriately. We also proposed 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.
Comment: Several commenters
enthusiastically supported our proposal
to create a new series of HCPCS codes
for follow-up inpatient telehealth
consultations. Some commenters were
concerned that our proposed definition
of the new HCPCS codes did not clearly
distinguish these consultations from
subsequent hospital care, and they
believed it would not preclude the use
of telehealth for the ongoing E/M of an
inpatient. Other commenters supported
our effort to reinstitute follow-up
inpatient consultations delivered via
telehealth, but discouraged us from
creating new HCPCS codes for the longterm. A few commenters recommended
that instead we approve subsequent
hospital care for telehealth. The AMA
and others urged us to implement the
proposed G codes as an interim
measure, while working expeditiously
with the CPT Editorial Panel and the
RUC to develop appropriate codes and
RVUs for the long-term.
Response: We are pleased that the
majority of commenters supported our
proposal to create a new series of
HCPCS codes for follow-up inpatient
telehealth consultations. As discussed
in the CY 2009 PFS proposed rule, we
considered other approaches to provide
and bill for follow-up inpatient
consultations delivered via telehealth.
In response to the comments requesting
that we approve subsequent hospital
care for telehealth only when the codes
are used for follow-up inpatient
consultations, we were concerned that
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the other approaches under
consideration would lead to a misuse of
the service, and practitioners would
provide a broader range of services via
telehealth than was formerly approved,
including the ongoing, day-to-day E/M
of a hospital inpatient. We were also
concerned that it could be difficult to
implement sufficient controls and
monitoring to ensure that whatever
mechanism we created would be limited
to the delivery of services that were
formerly described as follow-up
inpatient consultations. We continue to
believe that creating HCPCS codes
specific to the telehealth delivery of
follow-up inpatient consultations allows
us to provide payment for these
services, as well as enables us to best
monitor whether the codes are used
appropriately.
As noted previously, CPT deleted the
follow-up inpatient consultation codes.
We determined that there was a need to
establish a method by which
practitioners could provide and bill
Medicare for follow-up inpatient
consultations delivered via telehealth,
without allowing the ongoing E/M of a
hospital inpatient via telehealth.
Physicians and NPPs furnishing followup inpatient consultations in a face-toface encounter must continue to utilize
subsequent hospital care codes (as
described by CPT codes 99231 through
99233).
In response to commenters concerns
that the new HCPCS codes will not
prevent the use of telehealth for the
ongoing E/M of an inpatient, we have
modified the definition of follow-up
inpatient telehealth consultations. We
clarified that the criteria for these
services will be subject to and
consistent with Medicare policy for
consultation services, including criteria
that would distinguish a follow-up
consultation from a subsequent E/M
visit.
Result of Evaluation of 2009 Requests
We will finalize our proposal not to
add DSMT (as defined by HCPCS codes
G0108 and G0109) and not to add
critical care services (as defined by
HCPCS codes 99291 and 99292) to the
list of Medicare telehealth services.
We will finalize our proposal to add
follow-up inpatient telehealth
consultation, as represented by HCPCS
codes G0406 through G0408, to the list
of Medicare telehealth services. We will
also finalize our proposal to add followup inpatient telehealth consultations to
the list of Medicare services at § 410.78
and § 414.65.
Practitioners would use the new
HCPCS codes to submit claims to their
Medicare contractors for payment of
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follow-up inpatient consultations
provided via telehealth. These new
HCPCS codes are limited to the range of
services included in the scope of the
previous CPT codes for follow-up
inpatient consultations, and the
descriptions limit the use of such
services for telehealth. The HCPCS
codes clearly designate these services as
follow-up inpatient consultations
provided via telehealth, and not
subsequent hospital care used for
inpatient visits. Utilization of these
codes will allow for payment for these
services, as well as enable us to monitor
whether the codes are used
appropriately.
We also will finalize our proposal 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). Physicians and NPPs 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 are finalizing our proposal to
create HCPCS codes specific to the
telehealth delivery of follow-up
inpatient consultations solely to reestablish 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 an in person (faceto-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 Medicare contractors
that process claims for the 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 12, § 190.6.1 for instructions for
submission of interactive telehealth
claims.)
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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 12, § 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 follow up on
an initial consultation, or subsequent
consultative visits requested by the
attending physician. The initial
inpatient consultation may have been
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.
Follow-up inpatient telehealth
consultations include monitoring
progress, recommending management
modifications, or advising on a new
plan of care in response to changes in
the patient’s status or no changes on the
consulted health issue. Counseling and
coordination of care with other
providers or agencies is included as
well, consistent with the nature of the
problem(s) and the patient’s needs. The
physician or practitioner who furnishes
the inpatient follow-up consultation via
telehealth cannot 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. Follow-up inpatient
telehealth consultations are subject to
the criteria for consultation services, as
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described in the CMS Internet-Only
Medicare Claims Processing Manual,
Pub 100–04, Chapter 12, § 30.6.10.
Payment for follow-up inpatient
telehealth consultations includes all
consultation related services furnished
before, during, and after communicating
with the patient via telehealth. Preservice 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. Intraservice activities must include at least
two of the three key elements described
below for each procedure code. Postservice 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 are establishing three codes.
Practitioners taking a problem focused
interval history, conducting a problem
focused examination, and engaging in
medical decision making that is
straightforward or of low complexity,
would bill a limited service, using
HCPCS code G0406. 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 code G0407. 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 code G0408. At
this level of service, practitioners would
typically spend 35 minutes or more
communicating with the patient via
telehealth.
We are establishing the following
HCPCS codes to describe follow-up
inpatient consultations approved for
telehealth:
• G0406, Follow-up inpatient
telehealth consultation, limited,
typically 15 minutes communicating
with the patient via telehealth.
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• G0407, Follow-up inpatient
telehealth consultation, intermediate,
typically 25 minutes communicating
with the patient via telehealth.
• G0408, Follow-up inpatient
telehealth consultation, complex,
typically 35 minutes or more
communicating with the patient via
telehealth.
3. Other Issues
Comment: In 2005, CMS received a
request to add the following procedure
codes to the list of approved telehealth
services: initial nursing facility care (as
described by HCPCS codes 99304
through 99306); subsequent nursing
facility care (HCPCS codes 99307
through 99310); nursing facility
discharge services (HCPCS codes 99315
and 99316); and other nursing facility
services (as described by HCPCS code
99318). In the CY 2007 PFS final rule
with comment period, we did not add
these nursing facility care services to the
list of approved telehealth services
because these procedure codes did not
describe services that were appropriate
to the originating sites eligible in CY
2007. At that time, SNFs were not
defined in the statute as originating
sites. (See 71 FR 69657.)
Section 149 of the MIPPA recognizes
SNFs as telehealth originating sites,
effective for services furnished on or
after January 1, 2009. In light of this
provision, the American Telemedicine
Association (ATA) urged us to add
nursing facility care codes to the list of
telehealth services for CY 2009, as
requested in 2005.
Response: Section 149 of the MIPPA
did not add any services to the
approved telehealth list. Currently,
telehealth may substitute for a face-toface, ‘‘hands on’’ encounter for
professional consultations, office visits,
office psychiatry services, and a limited
number of other PFS services that we
have determined to be appropriate for
telehealth. We will continue to review
requests for additions to this list using
our existing criteria.
Telehealth is a delivery mechanism
for otherwise payable Part B services.
Although the requested nursing facility
services are not on the approved
telehealth list, we will pay eligible
distant site physicians or practitioners
for eligible Medicare telehealth services
if the service is separately payable
under the PFS when furnished in a faceto-face encounter at a SNF effective
January 1, 2009.
Since we believed it was not relevant
to add these codes when SNFs were not
eligible originating sites, we did not
include a full review of these codes in
the CY 2007 PFS proposed rule or final
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rule with comment period. We also note
that in considering nursing facility care
for telehealth, we would need to
carefully evaluate the use of telehealth
for the personal visits that are currently
required under § 483.40, (which are
billed using procedure codes included
in this request). Overall, we believe that
it would be more appropriate to
consider the addition of nursing facility
care services for telehealth through full
notice and comment procedures.
In the CY 2010 PFS proposed rule, we
will address the request to add nursing
facility care services to the list of
approved telehealth services, as
received in 2005. In light of the previous
request to add these services and the
new legislation adding SNFs as
permissible telehealth originating sites,
we will accept additional information in
support of this request for consideration
in the CY 2010 proposed rule if received
prior to December 31, 2008.
Comment: We received a request to
add health and behavior assessment and
intervention codes (as described by
HCPCS codes 96150 through 96154) to
the list of approved telehealth services.
Response: Requests submitted before
the end of CY 2008 will be considered
for the CY 2010 proposed rule.
Requestors should be advised that each
request to add a service to the list of
Medicare telehealth services must
include any supporting documentation
the requestor wishes us to consider as
we review the request. For more
information on submitting a request for
an addition to the list of Medicare
telehealth services, including where to
directly mail these requests, visit our
Web site at https://www.cms.hhs.gov/
telehealth/.
E. Specific Coding Issues Related to the
Physician Fee Schedule
1. Payment for PreadministrationRelated Services for Intravenous
Infusion of Immune Globulin
In the CY 2009 PFS proposed rule (73
FR 38518), we proposed to discontinue
payment for HCPCS code G0332,
Services for intravenous infusion of
immunoglobulin prior to administration
(this service is to be billed in
conjunction with administration of
immunoglobulin), for services furnished
after December 31, 2008.
Immune globulin is a complicated
biological product that is purified from
human plasma obtained from human
plasma donors. 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.
When IVIG is furnished to a patient in
a physician’s office, three different
payments are usually recognized:
payment for the IVIG product itself
(described by a HCPCS J code); payment
for the administration of the IVIG
product (described by one or more CPT
codes); and similar payment for the
preadministration-related services
(HCPCS code G0332). The Medicare
payment rates for IVIG products are
established through the Part B average
sales price (ASP) drug payment
methodology.
As explained in detail in the CY 2006,
CY 2007 and CY 2008 PFS final rules
with comment period (70 FR 70218 to
70221, 71 FR 69678 to 69679, and 72 FR
66254 to 66255, respectively), we
created, in 2006, a temporary code in
order to pay separately for the IVIG
preadministration-related services in
order to assist in ensuring appropriate
access to IVIG during a period of market
instability. Part of this instability was
due to the implementation of the new
ASP payment methodology for IVIG
drugs which began in 2005. The
payment for preadministration-related
services was continued in 2007 and
2008 because of continued reported
instability in the IVIG marketplace. The
preadministration-related payment was
designed to pay the physician practice
for the added costs of obtaining
adequate supplies of the appropriate
IVIG product and scheduling the patient
infusion during a period of market
uncertainty.
The PFS rates for the preadministration service codes were $72,
$75, and $75 respectively in 2006, 2007,
and 2008.
In the CY 2009 PFS proposed rule, we
noted that the Office of the Inspector
General’s (OIG) study on the availability
and pricing of IVIG published in a April
2007 report entitled, ‘‘Intravenous
Immune Globulin: Medicare Payment
and Availability (OEI–03–05–00404),’’
found that for the third quarter of CY
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
3 distributors occurred at prices below
the Medicare payment amounts. We
reviewed national claims data for IVIG
drug utilization as well as utilization of
the preadministration-related services
HCPCS code. The data show modest
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increases in the utilization of IVIG drugs
and the preadministration-related
services code, which suggest that IVIG
pricing and access may be improving.
In the CY 2009 PFS proposed rule, we
noted that these factors, taken as a
whole, suggested a lessening of the
instability of the IVIG market. As a
result of these developments, we
proposed to discontinue the
preadministration-related service
payment in 2009 for HCPCS code
G0332. For CY 2009, under the
Outpatient Prospective Payment System
(OPPS), a proposal was made to package
payment for HCPCS code G0332 (73 FR
41457).
The following is a summary of the
comments received and our responses.
Comment: We received several
comments from beneficiaries, patient
advocate groups, manufacturers, and
physicians. Most commenters opposed
the elimination of the
preadministration-related services
payment. A few commenters requested
that the preadministration-related
services payment become permanent for
both the PFS and the OPPS. Some
commenters stated that the market
conditions for IVIG are not
fundamentally different than they were
when CMS initially instituted the
preadministration-related services
payment in CY 2006. The commenters
requested that CMS continue the
separate payment until there is more
stability in the IVIG market. Several
commenters stated that the information
CMS presented in the CY 2009 PFS
proposed rule did not conclusively
prove that the IVIG market was
stabilizing. The commenters stated that
significant access problems remain.
In response to the findings of the OIG
report, some commenters stated that the
lag inherent in the ASP pricing system
may have played a role in substantially
increasing the percentage of IVIG sales
at prices below the Medicare payment
amounts in the third quarter of 2006.
The preadministration-related service
fee was cited as providing some
assistance to physicians and hospitals
that are experiencing problems
obtaining IVIG. Several commenters
noted that the OIG report could be
interpreted as leaving a large percent of
hospitals and physicians unable to
acquire IVIG at prices below Medicare’s
payment amounts. Many commenters
stated that they do not believe the
introduction of new brand-specific
reporting codes for IVIG will result in a
more stable marketplace.
One commenter presented patient
surveys conducted in CYs 2006, 2007
and 2008 which described access
limitations and shifts in the site of
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service. These surveys were limited in
size and surveyed only patients
receiving IVIG for primary immune
deficiency. Another commenter referred
to a report on IVIG issued in February
2007 titled, ‘‘Analysis of Supply,
Distribution, Demand and Access Issues
Associated with Immune Globulin
Intravenous’’ prepared by the Eastern
Research Group under contract
(Contract No. HHSP23320045012XI) to
the Assistant Secretary of Planning and
Evaluation in the U.S. Department of
Health and Human Services and cited
this report as an important source of
information on IVIG usage and patient
access.
Response: The separate payment for
IVIG preadministration-related service
was designed to compensate the
physician practice for the additional,
unusual, and temporary costs associated
with obtaining IVIG products and
scheduling patient infusions during a
temporary period of market instability.
This payment was never intended to
subsidize payment for drugs made
under the ASP system.
In the CY 2009 PFS proposed rule, we
referred to data from the OIG study that
indicated 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. We agree with
the commenters that it is likely that
increased ASP payments were the result
of previous price increases from past
quarters influencing future ASP data.
Furthermore, the new HCPCS codes for
IVIG products allow the physician to
report and receive payment for the
specific product furnished to the
patient. We stated clearly in the CY
2006 PFS final rule with comment
period that the preadministrationrelated services payment policy was a
temporary measure to pay physicians
for the unusual and temporary costs
associated with procuring IVIG. We
expected that these costs would decline
over time as practices became more
familiar with the nuances of the IVIG
market and the availability of the
limited primary and secondary
suppliers in their areas.
We did not reference the report
conducted by the Eastern Research
Group (Contract No.
HHSP23320045012XI) in the proposed
rule. As the commenter noted, this
report provides important
comprehensive background on the IVIG
marketplace. For example, it provides
an analysis of IVIG supply and
distribution, and an analysis of the
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demand for and utilization of IVIG
products. This report describes how
IVIG is administered and paid and
includes information from the industry
and others on physician and patient
problems with access to IVIG. The study
is a collection of multi-source
information that provides an
understanding of the IVIG marketplace.
One limitation of the study is it depicts
the market only up through the first
quarter of 2006 and it does not have
detailed information on IVIG pricing as
the OIG report did. The OIG report also
contains data from a later time period
because it includes data through the
third quarter of 2006.
We note, based on the information
that follows, that the IVIG market today
appears more stable than it was in CY
2006. We have reviewed national claims
data for IVIG drug utilization, as well as
the utilization of the preadministrationrelated services HCPCS code. These data
show a modest increase in the
utilization of IVIG and the
preadministration-related services code
in both physicians’ offices and hospital
outpatient departments from CY 2006 to
CY 2007, after a period of decreased
IVIG utilization in physicians’ offices
with a shift of IVIG infusions to the
hospital outpatient department in the
previous year, which suggests that IVIG
pricing and access may be improving.
National Medicare claims history data
show that there were about 3.1 million
units of IVIG administered in
physicians’ offices in CY 2006, and 7.3
million units in hospital outpatient
departments. In CY 2007, those numbers
rose to estimates of 3.3 million units
and 8.1 million units in the office and
hospital outpatient department settings,
respectively. Under the OPPS, the total
number of days of IVIG administration
increased modestly from CY 2006 to CY
2007, from 113,000 to 119,000.
Aggregate allowed IVIG charges in the
physician’s office setting for CY 2006
were $82 million, while total payments
(including beneficiary copayments)
under the OPPS were $184 million for
the same time period. In CY 2007,
aggregate allowed charges in the
physician’s office setting are estimated
at $8 million, while total OPPS
payments are estimated at $246 million.
In summary, beginning in CY 2007,
IVIG utilization increased modestly in
both the physician’s office setting and
the hospital outpatient department, after
a prior shift to the hospital and away
from the physicians’ offices, presumably
reflecting increasing availability of IVIG
and appropriate payment for the drug in
both settings.
According to information on the
Plasma Protein Therapeutics
Association (PPTA) Web site regarding
the supply of IVIG, in the past year,
while the supply has spiked at various
times throughout the year, the supply
has remained above or near the 12month moving average. While we
acknowledge that the supply is only one
of several factors that influence the
market, we believe that an adequate
supply is one significant factor that
contributes to better access to IVIG for
patients.
Therefore, because we believe that the
reported transient market conditions
that led us to adopt the separate
payment for IVIG preadministrationrelated services have improved, we
believe that continuation of the separate
payment for preadministration services
beyond CY 2008 is not warranted.
After consideration of the public
comments received, we are finalizing
our CY 2009 proposal, without
modification, to discontinue separate
payment under the PFS for IVIG
preadministration-related services
described by HCPCS code G0332. The
treatment of payment for
preadministration-related services
under the OPPS will be addressed
separately in that final rule. We will
continue to work with IVIG stakeholders
to understand their concerns regarding
the pricing of IVIG and Medicare
beneficiary access to this important
therapy.
2. Multiple Procedure Payment
Reduction for Diagnostic Imaging
In general, we price diagnostic
imaging procedures in the following
three ways:
• The PC represents the physician’s
interpretation (PC-only services are
billed with the 26 modifier).
• The 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
percent and the TC of each subsequent
procedure is paid at 75 percent (a 25percent 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. In the CY
2009 PFS proposed rule, we proposed to
subject several additional procedures to
the MPPR (73 FR 38519). 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 also
proposed to remove CPT code 76778, a
deleted code, from the list. Table 6
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 BN
requirement. Therefore, we proposed
that expenditure reductions resulting
from these changes be exempt from BN.
(See the Regulatory Impact Analysis in
section XVI. of this final rule with
comment period for a discussion of BN.)
The complete list of procedures subject
to the MPPR is in Addendum F of this
final rule with comment period.
TABLE 6—PROCEDURES PROPOSED FOR MULTIPLE PROCEDURE PAYMENT REDUCTION
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CPT code
70336
70554
75557
75559
75561
75563
76776
76870
77058
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
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Code family
mri, temporomandibular joint(s) ..................
Fmri brain by tech .......................................
Cardiac mri for morph .................................
Cardiac mri w/stress img ............................
Cardiac mri for morph w/dye ......................
Cardiac mri w/stress img & dye ..................
Us exam k transpl w/doppler ......................
Us exam, scrotum .......................................
Mri, one breast ............................................
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Family
Family
Family
Family
Family
Family
Family
Family
Family
5
5
4
4
4
4
1
1
4
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MRI and MRA (Head/Brain/Neck).
MRI and MRA (Head/Brain/Neck).
MRI and MRA (Chest/Abd/Pelvis).
MRI and MRA (Chest/Abd/Pelvis).
MRI and MRA (Chest/Abd/Pelvis).
MRI and MRA (Chest/Abd/Pelvis).
Ultrasound (Chest/Abdomen/Pelvis—Non-Obstetrical).
Ultrasound (Chest/Abdomen/Pelvis—Non-Obstetrical).
MRI and MRA (Chest/Abd/Pelvis).
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Short descriptor
77059 .............................
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CPT code
Mri, broth breasts ........................................
The following is a summary of the
comments we received and our
responses.
Comment: Some commenters
indicated that the MPPR should not be
extended to additional procedures
without providing data supporting the
appropriateness of a 25-percent
payment reduction for the additional
procedures. A commenter expressed
concern that the MPPR was being
extended to include breast MRIs, but the
commenter provided no other
information.
Response: As stated in the CY 2006
PFS final rule with comment period (70
FR 70261), when multiple images are
taken in a single session, most of the
clinical labor activities and supplies are
not duplicated for subsequent
procedures. Specifically, the following
activities are not duplicated for
subsequent procedures:
• Greeting the patient.
• Positioning and escorting the
patient.
• Providing education and obtaining
consent.
• Retrieving prior exams.
• Setting up the IV.
• Preparing and cleaning the room.
In addition, we considered that
supplies, with the exception of film, are
not duplicated for subsequent
procedures.
To determine the appropriate level of
the payment reduction for multiple
procedures, we examined multiple pairs
of procedure codes from the families
representing all modalities (that is,
ultrasound, CT/CTA, and MRI/MRA
studies) that were frequently performed
on a single day based on historical
claims data. Using PE input data
provided by the RUC, we factored out
the clinical staff minutes for the
activities we indicated are not
duplicated for subsequent procedures,
and the supplies, other than film, which
we considered are not duplicated for
subsequent procedures. We did not
assume any reduction in procedure
(scanning) time or equipment for
subsequent procedures. However,
equipment time and indirect costs are
allocated based on clinical labor time;
therefore, these inputs were reduced
accordingly. Removing the PE inputs for
activities that are not duplicated, and
adjusting the equipment time and
indirect costs for the individual pairs of
procedures studied, supported payment
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Code family
Family 4 MRI and MRA (Chest/Abd/Pelvis).
reductions ranging from 40 to 59
percent for the subsequent services.
Because we found a relatively narrow
range of percentage payment reductions
across modalities and families, and
taking into consideration that we did
not eliminate any duplicative image
acquisition time for subsequent
procedures in our analysis, we
originally proposed an across-the-board
MPPR for all 11 families of 50 percent
(which is approximately the midpoint of
the range established through our
analysis). We believe this level of
reduction was both justified and
conservative (70 FR 45849). To allow for
a transition of the changes in payments
for these services attributable to this
policy, we implemented a 25 percent
payment reduction for all code families
in CY 2006 which was scheduled to
increase to a 50 percent reduction in CY
2007.
Subsequent to the publication of the
CY 2006 PFS final rule with comment
period, section 5102 (b) of the DRA
capped the PFS payment for most
imaging services at the amount paid
under the hospital outpatient
prospective payment system (OPPS). In
addition, in response to our request for
data on the appropriateness of the 50
percent reduction in the CY 2006 PFS
final rule with comment period, the
American College of Radiology (ACR)
provided information for 25 code
combinations supporting a reduction of
between 21 and 44 percent. Given the
expected interaction between the MPPR
policy and the further imaging payment
reductions mandated by section 5102(b)
of the DRA, along with the information
we received from the ACR on the MPPR
as it applies to common combinations of
imaging services, we decided it was
prudent to maintain the MPPR at its
current 25 percent level while we
continue to examine the appropriate
payment levels. Therefore, we have
maintained the MPPR at the 25 percent
level.
In establishing the MPPR, we elected
to use a single reduction percentage for
all code pairs. We adopted a percentage
reduction that is considerably lower
than the range supported by our prior
analysis, and slightly higher than the
lowest percentage supported by ACR’s
analysis. We do not believe it is
necessary to conduct another analysis
for the additional codes because we
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adopted a conservative reduction
percentage and are continuing use of a
single reduction percentage for all code
pairs. We believe the payment reduction
policy, described above, represents an
appropriate reduction for the typical
delivery of multiple imaging services
furnished in the same session.
Furthermore, in establishing the
MPPR, we limited it to codes in the
same family, that is, contiguous areas of
the body that are commonly furnished
on the same patient, in the same
session, on the same day. We believe
that the eight CPT codes that were
newly created for 2007 or 2008, and
proposed for inclusion in the MPPR
beginning in CY 2009 (CPT codes
70554, 75557, 75559, 75561, 75563,
76776, 77058, and 77059), would have
been included on the MPPR list when
it was finalized in CY 2006, had they
existed at the time. These CPT codes are
similar to CPT codes that were selected
for the list in CY 2006 and can be
classified into the 11 contiguous body
area families already in existence. For
example, the procedure described by
CPT code 76776 (Ultrasound,
transplanted kidney, real time and
duplex Doppler with image
documentation) is similar to the
procedure described by CPT code 76705
(Ultrasound, abdominal, real time with
image documentation; limited (for
example, single organ, quadrant, followup), which has been subject to the
MPPR since the creation of the policy in
CY 2006. Similarly, we believe we
should add CPT codes 70336 and 76870,
which were in existence in CY 2006, to
the list because they also share
characteristics with other procedures
subject to the MPPR.
In response to the commenter
expressing concern that we were adding
the breast MRI CPT codes 77058 and
77059 in particular, we are not certain
of the reason for his or her concern
because none was stated. However, we
continue to believe it is appropriate to
add these CPT codes because their
addition is consistent with our policy
for other procedures included in Family
4, which describe procedures involving
MRI of the chest area.
To the extent that the newly added
procedures do not meet the MPPR
criteria (for example, if they are not
performed in the same session), they
will be unaffected by the MPPR.
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Comment: Commenters noted that we
proposed to establish new composite
rates for certain multiple diagnostic
imaging procedures performed at the
same time in hospital outpatient
settings. One commenter asked whether
individual procedure payment rates, or
the composite payment rates under
hospital OPPS will be used for purposes
of applying the OPPS cap to PFS
services. The commenter also asked
whether we will continue our policy of
applying the MPPR before application of
the OPPS cap.
Response: Under the PFS, services are
paid based on the individual CPT or
HCPCS code. Therefore, the OPPS cap
will continue to be applied based on the
hospital OPPS ambulatory payment
classification (APC) rate for the
individual procedure, and not the
composite rate. The policy of applying
the MPPR before applying the OPPS cap
remains unchanged.
Comment: Several commenters
expressed concern that the proposed
MPPR undervalues the procedures and
jeopardizes beneficiary access to care.
One commenter indicated that we
should examine any shifts in the site-ofservice that may have resulted due to
the MPPR.
Response: The Government
Accountability Office (GAO) and the
Office of the Inspector General (OIG)
have been performing several reviews
relating to the utilization of imaging
procedures including the effects of the
OPPS cap and the MPPR on utilization,
payment, and access to care. We will
continue to monitor the effects of the
policies to ensure that beneficiaries
have proper access to care.
After reviewing the public comments,
we are proceeding with the policy as
proposed. The ten additional
procedures listed in Table 6 will be
subject to the MPPR, effective January 1,
2009.
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3. HCPCS Code for Prostate Saturation
Biopsies
In the CY 2009 PFS proposed rule, we
proposed to create four new G codes for
prostate saturation biopsy as shown in
Table 7, currently reported with CPT
code 88305, Surgical pathology, gross
and microscopic examination, which is
separately billed by the physician for
each core sample taken. We also
proposed to have Medicare contractors
price these codes.
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TABLE 7—G CODES FOR PROSTATE
BIOPSY
G code
Descriptor
G0416 ..
Surgical pathology, gross and microscopic examination for prostate needle saturation biopsy
sampling, 1–20 specimens.
Surgical pathology, gross and microscopic examination for prostate needle saturation biopsy
sampling, 21–40 specimens.
Surgical pathology, gross and microscopic examination for prostate needle saturation biopsy
sampling, 41–60 specimens.
Surgical pathology, gross and microscopic examination for prostate needle saturation biopsy
sampling, greater than 60 specimens.
G0417 ..
G0418 ..
G0419 ..
The following is a summary of the
comments we received and our
responses.
Comment: Some commenters
expressed opposition to this proposal,
while others supported it but
recommended modifications to the
proposed G codes. All commenters were
opposed to Medicare contractor pricing
the G codes and stated that CMS, rather
than the Medicare contractor, should
assign an appropriate work value for
each specimen level to capture the
expertise, skill, time, and resources used
to determine if prostate cancer is
present.
Response: First, for CY 2009, the CPT
Editorial Panel changed Category III
code (0137T) to a Category I code,
55706, Biopsies, prostate; needle,
transperineal, stereotactic template
guided saturation sampling including
image guidance, which the AMA RUC
valued at 6.15 work RVUs. As discussed
in the proposed rule, we currently pay
$102.35 for CPT code 88305, which is
the code used by pathologists when
interpreting prostate biopsy samples.
Patients requiring a prostate saturation
biopsy generally have 30 to 60
specimens taken. The pathologist would
bill CPT code 88305 for evaluation of
each individual specimen. When CPT
code 88305 is used to evaluate prostate
saturation biopsies, the average total
payment for the evaluation of samples
from one prostate needle saturation
biopsy ranges from $3000 to $6000,
depending on the number of biopsies
taken. We believe the use of CPT code
88305 to bill individually for the
evaluation of each biopsy sample would
result in overpayment for this service.
Therefore, we are proceeding with the
proposal to create four G codes for
pathologic examination of prostate
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69751
needle saturation tissue sampling for
services furnished beginning in 2009.
However, we agree with commenters
that, rather than having Medicare
contractors price the new G codes, it
would be preferable for us to specify the
payment for these services. We
generally use contractor pricing when
we do not have sufficient information to
set the price. Upon further reflection,
we believe we can set prices for the new
G-codes by analogy to the current RVUs
for two existing codes: 88304 and
88305. We selected the mid-point of the
range of samples for G0417, G0418, and
G0419 to calculate the average number
of samples for each code. We assumed
15 percent of the samples taken require
considerable clinical expertise to
differentiate and distinguish carcinoma
from hyperplasia. We assigned the work
and PE values of 88305 to the 15 percent
of samples requiring this level of
expertise. The remaining 85 percent of
samples require confirmation of prostate
tissue and interpretation indicating the
presence of cancer or not since the
diagnosis had been identified in the 15
percent of samples. We assigned the
work and PE of 88304 to this group of
samples. We assigned the full work and
PE payment to the 15 percent sample
component to reflect the skill, time, and
effort required to identify and diagnose
carcinoma. We applied the multiple
surgical procedure discount (RVUs were
reduced by 50 percent in accordance
with current CMS policy) to the
remaining 85 percent of samples
reviewed for identification and
confirmation of prostate tissue. We
selected the 75th percentile of samples
from G0416 to recognize the greater
degree of skill, time, and effort required
to review, identify, and interpret the
initial biopsy specimens sampled. (See
Addendum B for the values assigned to
these G codes.)
Note: Under the PFS, CPT code 88305 will
continue to be recognized for those surgical
pathology services unrelated to prostate
needle saturation biopsy sampling.
F. Part B Drug Payment
1. Average Sales Price (ASP) Issues
Medicare Part B covers a limited
number of prescription drugs and
biologicals. For the purposes of this
final rule with comment period, 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 generally fall into the
following three categories:
• Drugs furnished incident to a
physician’s service.
• DME drugs.
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• 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
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 four 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 × 20mg)/
10mg = 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.
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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.
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.
As a result of the legislation, we
proposed to revise § 414.904 to codify
the changes to the determination of
payment amounts as required by section
112 of the MMSEA. We solicited
comments on the proposed regulatory
text.
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The following is a summary of the
comments we received and our
responses.
Comment: We received a number of
comments regarding our proposed
regulatory text. All of comments we
received strongly supported our
proposed regulatory text. Several
comments strongly urged CMS to ensure
that the methodology is properly
applied to all drugs paid under the ASP
methodology.
Response: We appreciate the support
from the public with regard to the
implementation of this statutory
provision. We have been applying the
revised methodology since April 2008
and are unaware of payment issues
resulting from its usage. The new
methodology is being applied
consistently across all Part B drugs
subject to the ASP methodology.
Comment: One commenter requested
that we limit the application of the
special payment rule, established by
section 112(b) of MMSEA to only
albuterol and levalbuterol.
Response: We disagree with this
comment. While we currently believe
that we have identified all of the drugs
to which the special payment rule
applies, it would be imprudent to
expressly limit its application to
albuterol and levalbuterol in the
regulations text because the statute does
not do so. The statute refers to certain
drugs described in section 1842(o)(1)(G)
of the Act. Thus, we believe the
regulations text, as proposed,
adequately specifies the drugs to which
the special rule applies. We have
committed, via postings on our web site,
to proceeding transparently when
making pricing determinations and have
done so by posting our decisions on our
web site. We will continue to do so in
the future.
After review of the public comments,
we are finalizing our proposed
regulatory text at § 414.904.
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—
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• 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
comparisons. We based this decision on
the limited data available to support a
change in the current threshold
percentage.
For CY 2009, we proposed to specify
an applicable threshold percentage of 5
percent for the WAMP and the AMP
comparisons. As we stated in the
proposed rule, the OIG is continuing its
ongoing comparison of both the WAMP
and the AMP. However, information on
how recent changes to the ASP
weighting methodology may affect the
comparison of WAMP/AMP to ASP was
not available in time for consideration
prior to developing our proposal to
maintain the applicable threshold
percentage at 5 percent for CY 2009.
Although we have recently received
reports comparing ASP to AMP in
which the OIG states it has applied the
new volume-weighting methodology
consistently, we have not had sufficient
time to analyze these reports. Thus, we
do not have data suggesting a more
appropriate level for the threshold at
this time. Therefore, we believe that
continuing the 5 percent applicable
threshold percentage for both the
WAMP and AMP comparisons 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
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
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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 solicited comments on our
proposal to continue the applicable
threshold at 5 percent for both the
WAMP and AMP for CY 2009.
The following is a summary of the
comments we received and our
responses.
Comment: Most commenters
supported maintaining the threshold at
5 percent. Other commenters suggested
that we exercise caution in the
determination of price substitutions and
that we develop a formal process and
criteria to determine when substitutions
are necessary. Commenters also
recommended that we provide adequate
notice prior to making a price
substitution.
Response: We appreciate the
comments to maintain the threshold at
5 percent. As we noted in the CY 2008
PFS final rule with comment period (72
FR 66259), we understand that there are
complicated operational issues
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.
After reviewing of the public
comments, we are finalizing our
proposal to establish the WAMP/AMP
threshold at 5 percent for CY 2009.
2. Competitive Acquisition Program
(CAP) Issues
Section 303(d) of the MMA requires
the implementation of a competitive
acquisition program (CAP) for certain
Medicare Part B drugs not paid on a cost
or PPS 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
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with comment period (70 FR 70236).
The CY 2007 PFS final rule with
comment period (72 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 amounts 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
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 the CY 2009 PFS proposed rule, we
proposed 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 (73 FR 38522).
However, since the publication of our
proposed rule, we have announced the
postponement of the CAP for 2009 due
to contractual issues with the successful
bidders. As a result, CAP physician
election for participation in the CAP in
2009 is not being held this Fall, and
CAP drugs will not be available from an
Approved CAP Vendor for dates of
service after December 31, 2008.
Moreover, we are currently soliciting
public feedback on the CAP from
participating physicians, potential
vendors, and other interested parties.
We are soliciting public comments
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about a range of issues, including, but
not limited to the following issues: the
categories of drugs provided under the
CAP; the distribution of areas that are
served by the CAP; and procedural
changes that may increase the program’s
flexibility and appeal to potential
vendors and physicians. Interested
parties can submit feedback about the
CAP electronically or request to meet
with us in person. Feedback about the
CAP and meeting requests can be
submitted electronically to:
MMA303DDrugBid@cms.hhs.gov.
We will also host a CAP Open Door
Forum (ODF) this December for
participating physicians, potential
vendors, and other interested parties.
Participants will have an opportunity to
discuss the postponement and suggest
changes to the program. Additional
information about this event will be
available on the CMS CAP Web site at
https://www.cms.hhs.gov/
CompetitiveAcquisforBios/.
We will assess information from the
public and consider implementing
changes to the CAP before proceeding
with another bid solicitation for
Approved CAP Vendor contracts.
Furthermore, in light of the
postponement of the CAP, we believe it
would be prudent to consider the
additional information that is being
collected before finalizing any further
changes to the program. For this reason,
we will not finalize the CAP items in
the CY 2009 proposed rule at this time.
We appreciate the comments that we
have received and we will consider
these comments as we assess potential
changes to the program and future
rulemaking.
G. Application of the HPSA Bonus
Payment
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
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
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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 the CY 2009 PFS proposed rule, we
proposed to revise § 414.67 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.
Comment: We received comments in
support of using the AQ modifier to
ensure that all physicians furnishing
services in a geographic HPSA that is
not included in the list of zip codes
eligible for automatic bonus payments
will still receive the 10-percent HPSA
bonus payment. One commenter
emphasized that this clarification would
lessen the administrative burdens they
experienced from the lack of a modifier
in the past.
A few commenters expressed concern
that many physicians may not be aware
of the AQ modifier requirement for
services furnished in areas that are not
on the list of zip codes for automatic
payment. One commenter urged us to
use educational materials and outreach
in order to ensure physicians are aware
they may need to use the AQ modifier
when submitting their Medicare claims.
Another commenter requested that we
develop a method to ensure payments
are received automatically for all
physicians that would qualify for the
HPSA bonus payment.
One commenter suggested that we
change the HPSA bonus payment
program to include nonphysicians and
work with the Congress to allow all
persons who directly bill under Part B
to be eligible for the 10-percent bonus
for working in a designated HPSA.
Response: We appreciate the
comments in support of our efforts to
ensure all physicians furnishing
services to Medicare beneficiaries in an
area that is designated as a geographic
HPSA on December 31 of the prior year
receive the HPSA bonus payment.
As a result of refinements in our
systems, we expect that more areas that
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are eligible for the bonus payment will
be on the list of zip codes eligible for
automatic payment of the HPSA bonus,
thereby reducing the number of
physicians who need to use the
modifier. However, we acknowledge
that some physicians may not be aware
of the need to use the modifier if they
are furnishing services in a geographic
HPSA that was designated after the list
of eligible zip codes was created but
prior to December 31. We will continue
to utilize our provider education
resources to increase awareness of the
appropriate application of the AQ
modifier. We will also continue to refine
our systems to include as many areas as
possible to the list of zip codes that
receive automatic HPSA bonus
payments.
We recognize that there can be
shortages of all types of healthcare
practitioners and we indeed appreciate
the value of these nonphysicians.
However, section 1833(m) of the Act
provides for the payment of an
additional amount only to physicians
and a change would require a statutory
revision.
After careful consideration of all of
the comments, we are adopting our
proposal to add § 414.67(d) with minor
revisions 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
In the CY 2009 PFS proposed rule (73
FR 38527), we outlined for CY 2009 the
proposed updates to the case-mix
adjusted composite rate payment system
established under section 1881(b)(12) of
the Act, added by section 623 of the
MMA. These included updates to the
drug add-on component of the
composite rate system, as well as the
wage index values used to adjust the
labor component of the composite rate.
Specifically, we proposed the
following provisions which are
described in more detail below in this
section:
• A zero growth update to the
proposed 15.5 percent drug add-on
adjustment to the composite rates for
2009 required by section 1881(b)(12)(F)
of the Act (resulting in a $20.33 per
treatment drug add-on amount).
• An update to the wage index
adjustment to reflect the latest available
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wage data, including a revised BN
adjustment factor of 1.056672;
• 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.
A total of 56 comments were
submitted under the caption ‘‘ESRD
PROVISIONS.’’ Eight of these comments
pertained to the proposed changes to
ESRD payment related provisions listed
above. The remaining 48 comments
responded to the solicitation for public
comment pertaining to the application
of preventable hospital-acquired
condition (HAC) payment provisions for
IPPS hospitals in settings other than
IPPS hospitals, including ESRD
facilities. Please refer to section II.H.6.
of this final rule with comment period
for a discussion of the applicability of
the HAC payment provision for IPPS
hospitals in settings other than IPPS
hospitals.
The ESRD payment related comments
are discussed in detail below in this
section. In addition, subsequent to the
publication of the CY 2009 PFS
proposed rule, section 153 of the
Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA) (Pub. L.
110–275), enacted on July 15, 2008,
mandates changes in ESRD payment
effective January 1, 2009.
Section 153(a) of the MIPPA amends
section 1881(b)(12)(G) of the Act to
increase the composite rate component
of the payment system and amends
section 1881(b)(12)(A) to revise
payments to ESRD facilities. The
amendments that are effective January 1,
2009 include an update of 1 percent to
the composite rate component of the
payment system (for services furnished
on or after January 1, 2009, and before
January 1, 2010), and the establishment
of a site neutral composite rate for both
hospital-based and independent dialysis
facilities which, when applying the
geographic index, shall reflect the labor
share based on the labor share otherwise
applied for renal dialysis facilities. The
labor share for both hospital-based and
independent dialysis facilities is 53.711.
In addition, since we compute the
drug add-on adjustment as a percentage
of the weighted average base composite
rate, the drug add-on percentage is
decreased to account for the higher
composite payment rate and will result
in a 15.2 percent drug add-on
adjustment for CY 2009. Since the
statutory increase only applies to the
composite rate, this adjustment to the
drug add-on percentage is needed to
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ensure that the total drug add-on dollars
remains constant.
Prior to the MIPPA provisions,
effective for CY 2008, hospital-based
dialysis facilities received a base
composite rate of $136.68 and
independent dialysis facilities received
a base composite rate of $132.49, and so
the CY 2009 base composite rate for
independent dialysis facilities prior to
the MIPPA was $132.49. The MIPPA
mandates that payments for both the
hospital-based dialysis facilities and
independent dialysis facilities be based
on the independent dialysis facilities
rate. The 1 percent increase to the
independent dialysis facility’s 2008
composite rate of $132.49 results in a
2009 base composite rate for both
hospital-based and independent dialysis
facilities of $133.81. A drug add-on
amount of $20.33 per treatment remains
the same for 2009, which results in a
15.2 percent increase over the base
independent composite rate of $133.81.
1. 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 us to establish an addon to the composite rate to account for
changes in the drug payment
methodology stemming from enactment
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 the 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 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).
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69755
a. Estimating Growth in Expenditures
for Drugs and Biologicals for CY 2009
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
expenditures beginning in CY 2010.
For CY 2009, we proposed revising
the interim methodology for estimating
the growth in ESRD drug expenditures
by using ASP pricing instead of the PPI
to estimate the price component of the
update calculation.
As detailed below in this section, we
proposed 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.
b. Estimating Growth in ESRD Drug
Prices
For CY 2009, we proposed to estimate
price growth using ASP pricing data for
the four quarters of CY 2006 and
CY2007, and the two available quarters
of CY 2008. For this final rule with
comment period, we are using four
quarters of ASP prices for CYs 2006,
2007, and 2008. We calculated the
weighted price change, for the original
top ten ESRD drugs for which we had
acquisition pricing, plus Aranesp. 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 weighted average ESRD drug pricing
change projected for CY 2009 is a
reduction of 1.9 percent.
Comment: Commenters were
generally opposed to the use of ASP
prices to estimate the price component
of the drug add-on adjustment. One
commenter stated that although the
price of EPO has declined in the past
few years, it has now stabilized and will
likely not decline again in CY 2009.
Two commenters, including MedPAC,
supported the use of ASP prices stating
that it is more closely related to the
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actual ESRD drug pricing than the use
of the overall drug PPI. Another
commenter stated that the PPI was a
more accepted proxy for predicting drug
price increases compared to ASP price
trends which have never been used in
forecasting drug price changes. Some
suggested that we use a blend of ASP
and PPI to soften the impact of the
change in the methodology.
Response: Given that the statutory
language mandates that we estimate the
growth in ESRD drug expenditures in
order to update the drug add-on
adjustment, we believe we have an
obligation to utilize the best data
available to make those estimates.
Although the PPI is a well recognized
measure of overall drug price growth, it
is not specific to ESRD drug prices.
Given that ESRD drug pricing trends are
very different from overall drug pricing
trends, we do not believe it would be
appropriate to continue using the PPI
when more specific data are available.
ASP pricing data that are specific to
ESRD drugs provide the most accurate
measure for estimating the price
component of the total ESRD drug
expenditure estimate for CY 2009.
Therefore, for this final rule with
comment period, we used ASP pricing
data to estimate price growth in ESRD
drugs.
cprice-sewell on PROD1PC64 with RULES_2
c. Estimating Growth in per Patient Drug
Utilization
To isolate and project the growth in
per patient utilization of ESRD drugs for
CY 2009, we removed the enrollment
and price growth components from the
historical drug expenditure data, and
considered the residual to be utilization
growth. As discussed previously in this
section, we proposed to use ESRD
facility drug expenditure data from CY
2006 and CY 2007 to estimate per
patient utilization growth for CY 2009.
We first estimated total drug
expenditures for all ESRD facilities. For
the CY 2009 PFS proposed rule (73 FR
38528), 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 this
final rule with comment period, we are
using 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.
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15:01 Nov 18, 2008
Jkt 217001
For the CY 2009 PFS proposed rule,
we adjusted the December 2007 file to
reflect our estimate of what total drug
expenditures would be using the final
June 30, 2008 bill file for CY 2007. The
net adjustment we applied to the CY
2007 claims data was an increase of 12.6
percent to the December 2007 claims
file. To calculate the proposed 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 calculated the 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.
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 or 1.00/(1.03 * 0.982) =
0.99.
Since we observed a 1 percent drop in
per patient utilization of drugs between
CY 2006 and CY 2007, we projected a
1 percent drop in per patient utilization
for ESRD facilities in CY 2009.
Comment: A few commenters
suggested that the use of CY 2007 billing
data to predict utilization change in CY
2009 is not accurate since the utilization
change in CY 2007 was driven by a
revision to the EPO monitoring policy
which caused a one-time decline in
utilization that has since leveled off.
Response: We agree that the revised
monitoring policy for erythropoesis
stimulating agents (ESAs) that took
effect in CY 2007 could have
contributed to the observed decrease in
ESRD drug utilization between CY 2006
and CY 2007, especially given that EPO
and Aranesp make up over 75 percent
of all ESRD drug expenditures.
Moreover, this effect could distort our
estimate of per patient utilization
growth in CY 2009. Since CY 2007, we
have analyzed 2 years of historical
claims data for estimating growth in
utilization (CY 2005 and CY 2006).
During that period, utilization based on
an analysis of independent ESRD
facility drug data has indicated no
growth. We believe the use of CY 2005
and CY 2006 drug data is the best data
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Sfmt 4700
available for use in projecting utilization
in CY 2009. Therefore, for CY 2009, we
will continue to use our estimate of
growth in utilization based on CY 2005
and CY 2006 data (72 FR 66282). That
is, we are finalizing an estimation of no
growth in utilization for CY 2009.
2. Applying the Proposed Growth
Update to the Drug Add-on Adjustment
In the CY 2007 PFS final rule with
comment period (71 FR 69684), we
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.
For CY 2009, we proposed no update
to the per treatment drug add-on
amount of $20.33 established in CY
2008.
3. Update to the Drug Add-On
Adjustment
In the CY 2009 PFS proposed rule (73
FR 38529), we estimated a 1 percent
reduction in per patient utilization of
ESRD drugs for CY 2009. Using the
projected decline of the CY 2009 ASP
pricing for ESRD drugs of 1.9 percent,
we projected 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, we proposed
to apply a zero percent update to the
drug add-on adjustment and maintain
the $20.33 per treatment drug add-on
amount for CY 2009 that reflects a 15.5
percent drug add-on adjustment to the
composite rate for CY 2009.
In addition, for CY 2009 we presented
an alternative approach to the zero
percent update. The alternative
approach would be to apply an
adjustment of less than 1.0 to the drug
add-on adjustment. For CY 2009, we
would ‘‘increase’’ the drug add-on 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 drug add-on adjustment to
the composite rate for CY 2009 would
be equal to 1.155 * 0.996 = 1.15 or 15.0
percent.
We solicited public comment on our
proposal of a zero update, as well as the
alternative approach presented above,
so that we could make an informed
decision with respect to the final update
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to the CY 2009 drug add-on adjustment
to the composite rate.
Comment: Commenters were
uniformly opposed to any decrease in
the drug add-on adjustment, citing the
plain reading of the statute which calls
for an annual ‘‘increase’’ in the
adjustment. As support for the reliance
on the plain reading of the statute,
several commenters cited case law
examples in which courts have relied on
dictionary definitions, biblical text, and
common usage of terms for purposes of
interpreting statutory text. One
commenter disagreed with CMS’
alternative reading of 1881(b)(12)(F) of
the Act, under which an increase in the
drug add-on could not be implemented
when estimated drug growth is negative,
pointing to MMA Conference Report
language that referenced a payment
update that would be based on a
‘‘growth’’ in drug spending and ‘‘drug
cost increases.’’ Commenters further
argued, citing case law the priority on
plain language over policy arguments
and cautioned against identifying gaps
in statutes.
One commenter suggested that we
should use the methodology to estimate
growth in ESRD drug expenditures that
yields a positive adjustment as required
by the statute. Another commenter
stated that if we believe ESRD drug
expenditures will decline, this would
indicate that the spread between AWP
and ASP pricing will widen in CY 2009,
thus justifying an increase in the drug
add-on adjustment.
Response: We agree that the plain
reading of the statute would preclude
any decrease in the drug add-on
adjustment and would not support a
negative growth update. Specifically,
section 1881(b)(12)(F) of the Act states
in part that ‘‘the Secretary shall
annually increase’’ the drug add-on
amount based on the growth in
expenditures for separately billed ESRD
drugs. We interpret the statutory
language ‘‘annually increase’’ to mean a
positive or zero update to the drug addon given that the statute also requires
that the annual ‘‘increase’’ to the drug
add-on adjustment reflect our estimate
of the growth in ESRD drug
expenditures. Since our analysis
indicates a projected reduction in ESRD
drug expenditures for CY 2009, we do
not believe it would be appropriate to
provide an increase that cannot be
substantiated by the best data available.
Therefore, we are finalizing our
proposal to provide a zero update to the
drug add-on adjustment for CY 2009. If
the statute had included, instead of the
word ‘‘increase,’’ a broader term, we
believe we would have had authority to
decrease the rate to take into account
the projected reduction.
4. Final Growth Update to the Drug
Add-On Adjustment for 2009
As we indicated earlier, we have
decided not to use CY 2007 expenditure
data to estimate utilization growth for
CY 2009, because of the potential
distortion of our estimates due to the
implementation of the ESA monitoring
policy in 2007. Therefore, for this final
rule with comment period, we are using
the same data we use to estimate growth
in utilization for CY 2008 as outlined in
the CY 2008 PFS final rule with
comment period (72 FR 66282). That is,
for CY 2009, we estimate no growth in
per patient utilization of ESRD drugs for
CY 2009.
69757
Similar to the CY 2009 PFS proposed
rule, we estimated growth in ESRD drug
prices using ASP pricing data for CYs
2006, 2007 and 2008. In the proposed
rule, we had only 2 quarters of data for
2008, but for this final rule all four
quarters of ASP pricing data are
available. We calculated the weighted
price change for the top eleven ESRD
drugs. Tables 8 and 9 show the average
ASP prices and the 2007 weights used.
We note that the final CY 2007 weights
are derived from the final CY 2007
ESRD facility claims file as of June 30,
2008. For 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 1.9 percent between CY
2007 and CY 2008. The overall average
price reduction is 1.8 percent over the
3-year period. Thus, the weighted
average ESRD drug pricing change
projected for CY 2009 is a reduction of
1.8 percent.
We project that the combined growth
in per patient utilization and pricing of
ESRD drugs for CY 2009 would result in
a negative update equal to ¥1.8 percent
(1.00 * 0.982 = 0.982). If we implement
this decrease in the update to the drugon adjustment, the resulting savings
would have been $14 million. However,
as indicated above, for this final rule
with comment period, we are applying
no update to the drug add-on
adjustment for CY 2009. Thus, we are
applying a zero update to the $20.33 per
treatment drug add-on amount for CY
2009. After adjusting for the MIPPA
changes as discussed earlier in this
section, the final drug add-on
adjustment to the composite rate for CY
2009 is 15.2 percent.
TABLE 8—CY 2006, 2007 AND 2008 ESRD DRUG ASP PRICES
Independent drugs
CY 2006
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EPO .............................................................................................................................................
Paricalcitol ....................................................................................................................................
Sodium-ferric-glut .........................................................................................................................
Iron-sucrose .................................................................................................................................
Levocarnitine ................................................................................................................................
Doxercalciferol .............................................................................................................................
Calcitriol .......................................................................................................................................
Iron-dextran ..................................................................................................................................
Vancomycin .................................................................................................................................
Alteplase ......................................................................................................................................
Aranesp ........................................................................................................................................
TABLE 9—CY 2007 DRUG WEIGHTS
FOR ESRD FACILITIES
Independent drugs
CY 2007
weights
(%)
EPO ......................................
Paricalcitol ............................
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TABLE 9—CY 2007 DRUG WEIGHTS
FOR ESRD FACILITIES—Continued
69.1
11.9
Jkt 217001
CY 2007
weights
(%)
Independent drugs
Sodium-ferric-glut .................
Iron-sucrose ..........................
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Fmt 4701
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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
CY 2007
$9.17
3.79
4.76
0.37
8.07
2.68
0.54
11.69
3.43
33.21
3.29
$9.05
3.78
4.81
0.36
6.31
2.75
0.40
11.69
3.19
33.06
2.86
TABLE 9—CY 2007 DRUG WEIGHTS
FOR ESRD FACILITIES—Continued
Independent drugs
2.5
6.1
CY 2008
Levocarnitine ........................
Doxercalciferol ......................
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CY 2007
weights
(%)
0.2
2.8
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TABLE 9—CY 2007 DRUG WEIGHTS
FOR ESRD FACILITIES—Continued
CY 2007
weights
(%)
Independent drugs
Calcitriol ................................
Iron-dextran ..........................
Vancomycin ..........................
Alteplase ...............................
Aranesp ................................
0.1
0.0
0.1
1.0
6.2
5. Update to the Geographic
Adjustments to the Composite Rates
Section 1881(b)(12)(D) of the Act, as
added 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 wage indexes are calculated for
each urban and rural area. 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.
a. 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
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/.
b. 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.
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 (BNF).
We proposed 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 BNF is 1.056689. This figure
differs slightly from the figure in the
proposed rule (1.056672) because we
used updated hospital wage data and
treatment counts from the most current
claims data. (See section II.H.5.c. of this
final rule with comment period for
details about this adjustment.) For a
detailed description of the development
of the CY 2009 wage index values based
on FY 2005 hospital data, see the FY
2009 ‘‘Hospital Inpatient Prospective
Payment Systems (IPPS) and Final
Fiscal Year 2009 Rates’’ rule (73 FR
23630). Section III.G. of the preamble to
the FY 2009 IPPS final rule,
Computation of the Final FY 2009
Unadjusted Wage Index, 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 Final Rule
Occupational Mix Adjusted and
Unadjusted Average Hourly Wage and
Pre-reclassified Wage Index by CBSA.’’
i. Fourth Year of the Transition
In the CY 2006 PFS final rule with
comment period (70 FR 70167 through
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 case-mix
adjustments) is a blend of its old MSAbased wage-adjusted payment rate and
its new CBSA-based wage adjusted
payment rate for the transition year
involved. 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, each ESRD facility’s
composite payment rate will be based
entirely on the CBSA-based wage index.
For CY 2009, we proposed to reduce
the wage index floor from 0.75 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 floor and blended
share applicable for CY 2009 are shown
in Table 10.
TABLE 10—WAGE INDEX TRANSITION BLEND
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CY payment
2009 ............
Floor
0.70*
Ceiling
Old MSA
None .......................................................................................................
New CBSA
0%
100%
* Each wage index floor is multiplied by a BN adjustment factor. For CY 2009 the BN adjustment is 1.056689 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.
Comment: We received a few
comments that commend CMS for its
use of a transition policy in shifting the
Medicare ESRD program into a new
geographic wage index system.
Commenters stressed that prior to the
elimination to the floor, we should
provide protection to facilities in areas
that would otherwise not be able to
support dialysis facilities, which will
ensure that access to care for
beneficiaries is not compromised.
Response: We note that our goal is the
eventual elimination of all wage index
floors. However, 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. We will continue
to reassess the need for a wage index
floor in future years.
ii. 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 CY 2008, we used an alternative
methodology as explained below.
• 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
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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 will continue
to use the same methodology for CY
2009. Under this methodology, the CY
2009 wage index values for the counties
of Barnstable (CBSA 12700, Barnstable
Town, MA–1.2643) and Bristol (CBSA
39300, Providence-New Bedford-Fall
River, RI–MA–1.0696) were averaged
resulting in an imputed proposed wage
index value of 1.1670 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 final
ESRD wage index floor of 0.70.
Therefore, we will apply the ESRD wage
index floor of 0.70 to all ESRD facilities
that are located in rural Puerto Rico.
For Hinesville, GA (CBSA 25980),
which is an urban area without specific
hospital wage data, we proposed to
apply the same methodology in 2009
that we used to impute a wage index
value in CY 2006, CY 2007, and CY
2008. Specifically, we proposed to use
the average wage index value for all
urban areas within the State of Georgia.
We are finalizing our proposal, which
results in a CY 2009 wage index value
of 0.9110 for the Hinesville-Fort Stewart
GA CBSA.
In the CY 2008 PFS final rule with
comment period (72 FR 66283 through
66284), 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, have emerged.
Therefore, for ESRD purposes, we
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continue to believe this is an
appropriate policy. We received no
comments on this section and are
finalizing our policies for wage areas
with no hospital data as proposed.
iii. Evaluation of Wage Index Policies
Adopted in the FY 2008 IPPS Final Rule
We stated in the CY 2008 PFS final
rule with comment period (72 FR
66284) 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 also proposed 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 the ESRD
composite payment rates effective
beginning January 1, 2009.
(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 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
counties, 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.
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In the FY 2008 IPPS final rule with
comment period, for purposes of IPPS,
§ 412.64(b)(1)(ii)(B) was amended 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). For purposes of the
ESRD wage index, we have recognized
OMB’s CBSA designations, as well as
generally followed the policies under
the IPPS with regard to the definitions
for ‘‘urban’’ and ‘‘rural’’ for the wage
index, but we do not to take into
account IPPS geographic
reclassifications in determining
payments under the composite payment
system. Accordingly, to reflect our
general policy for the 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
Hartford-East Hartford, CT) and urban
CBSA 31700 (Manchester-Nashua, NH),
respectively.
(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
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 that were 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. In the proposed rule,
we noted 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
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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, under the 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).
This resulted in the allocation of
salaries and hours to the campuses of
two multi-campus 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 Addenda
G and H of this final rule with comment
period.)
For CY 2009, we will use the FY 2009
wage index data (collected from cost
reports submitted by hospitals for cost
reporting periods beginning during FY
2005) to compute the ESRD composite
payment rates effective beginning
January 1, 2009.
Although we solicited comments, we
did not receive any comments on this
section and are implementing these
provisions in this final notice. (For a
detailed explanation of the multicampus and New England deemed
counties policies, refer to the CY 2009
PFS proposed rule (73 FR 38531
through 38532)).
c. Budget Neutrality Adjustment
Section 1881(b)(12)(E)(i) of the Act, as
added by section 623(d) of the MMA,
requires that 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 did not propose 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 proposed
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to apply a BN adjustment factor 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 final CY 2009 wage
index BN adjustment factor (1.056689),
we used the most current FY 2005 prefloor, pre-reclassified, non-occupational
mix-adjusted hospital data to compute
the wage index values, treatment counts
from the most current 2007 outpatient
claims (paid and processed as of June
30, 2008), and geographic location
information for each facility which may
be found on 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
Final Proposed Rule Occupational Mix
Adjusted and Unadjusted Average
Hourly Wage and Pre-Reclassified Wage
Index by CBSA.’’
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
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.
Section 153(a) of the MIPPA updated
section 1881(b)(12)(G) of the Act and
revised payments to ESRD facilities. The
revisions that are effective January 1,
2009 include an update of 1 percent to
the composite rate component of the
payment system, and the establishment
of a site neutral composite rate to
hospital-based and independent dialysis
facilities. We note that when computing
the 4th year new amount, we did not
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include the MIPPA provisions because
they are not budget neutral.
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 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 BN
adjustment factor for the CY 2009 wage
index is 1.056689. This figure differs
slightly from the figure in the proposed
rule (1.056672) because we have used
updated hospital wage data and
treatment counts from the most current
claims data.
To ensure BN, we also must apply the
BN adjustment factor to the wage index
floor of 0.7000 which results in a
adjusted wage index floor of 0.7397
(0.7000 × 1.056689) for CY 2009.
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d. ESRD Wage Index Tables
The 2009 wage index tables are
located in Addenda G and H of this final
rule with comment period.
6. 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 Data for the Annual Payment
Update), 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
the Physician Group Practice
Demonstration.
The preventable hospital-acquired
conditions (HAC) payment provision for
IPPS hospitals is another of our valuebased purchasing initiatives. The
principle behind the HAC payment
provision (Medicare will not provide
additional payments to IPPS hospitals to
treat certain preventable conditions
acquired during a beneficiary’s IPPS
hospital stay) could be applied to the
Medicare payment systems for other
settings of care. Section 1886(d)(4)(D) of
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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 Medicare Severity-Diagnosis
Related Group (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 was
not present, or could not be identified
based on clinical judgment, on
admission. That is, the case will be paid
as though the secondary diagnosis
related to the HAC 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 (that is, Medicare not paying
more for certain reasonably preventable
hospital-acquired 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, ambulatory
surgical centers, SNFs, HHAs, ESRD
facilities, and physician practices.
Implementation would be different for
each setting, as each payment system is
different and the level of reasonable
prevention through the application of
evidence-based guidelines would vary
for candidate conditions across different
settings of care. However, alignment of
incentives across settings of care is an
important goal for all of our VBP
initiatives, including the HAC payment
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 reasonably
preventable condition acquired in the
first setting but treated in the second
setting.
We note that we did not propose new
Medicare policy in this discussion of
the possible application of the HAC
payment policy for IPPS hospitals to
other settings, as some of these
approaches may require new statutory
authority. Instead of proposing policy,
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69761
we solicited public comment on the
application of the preventable HAC
payment provision for IPPS hospitals to
other Medicare payment systems. We
also stated that we look forward to
working with stakeholders in the fight
against all healthcare-associated
conditions.
The following is a summary of the
comments we received and our
responses.
Comment: Commenters recommended
that CMS work with technical experts,
such as physicians and hospitals, to
determine the impact, burden, and
accuracy of POA indicator reporting in
the inpatient setting before it is
expanded to other settings of care.
Commenters specifically recommended
that CMS consider issues of adverse
selection and access to care for
vulnerable populations. Many
commenters had concerns with CMS’
authority and ability to implement such
a policy for the physician office setting.
Response: We agree that the HAC
payment provision should be studied to
determine its impact. We also recognize
the importance of aligning VBP policy
across all Medicare payment systems.
We believe it is appropriate to consider
policies of not paying more for medical
care that harms patients or leads to
complications that could have been
prevented. For example, we note that
CMS is currently considering National
Coverage Determinations (NCDs) for
three of the National Quality Forum’s
Serious Reportable Events: (1) Surgery
on the wrong body part, (2) surgery on
the wrong patient, and (3) wrong
surgery performed on a patient. NCDs
can address physician services as well
as institutional services. We will work
with stakeholders as we move forward
in combating healthcare-associated
conditions in all Medicare payment
settings. Any additional policies, within
statutory authority, addressing these
issues would be proposed through
notice and comment rulemaking.
Comment: Some commenters stated
that CMS may need to implement a
Present on Admission (POA)-type
indicator to recognize healthcareacquired conditions in the physician
office and ESRD settings of care, similar
to the IPPS POA indicator.
Response: We agree that a POA-type
indicator would aid in determining the
onset of a healthcare-acquired
condition. We welcome the opportunity
to work with stakeholders to consider
expansion of a POA-type indicator to all
Medicare settings of care. We look
forward to working with entities such as
the National Uniform Billing Committee
(NUBC) on the implementation of a
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POA-type indicator for all settings of
care.
Comment: Many commenters
identified attribution of a healthcareacquired condition to an individual
physician who is broadly managing the
patient’s care as a challenge in
expanding the principle behind the
HAC payment provision to the
physician office setting. Some
commenters noted that several
physicians may be responsible for the
care of a patient, therefore attribution of
the adverse event to a single physician
may be difficult.
Response: We recognize that because
health care is delivered by a team of
professionals, several providers could
potentially share responsibility for the
occurrence of a healthcare-associated
condition. We have extensive
experience in testing various attribution
methodologies in our cost of care
measurement initiative. We refer readers
to section III.C. of this final rule with
comment period (section 131(c) of the
MIPPA) for further discussion of
attribution.
Comment: Some commenters
expressed concern regarding
implementation of the Medicare
secondary payer policy to hold the
provider in which a health-care
associated condition occurred liable for
the cost of subsequent care required to
treat the condition.
Response: We appreciate the
comments regarding MSP policy and
payment for health-care associated
conditions in downstream care settings.
We look forward to further exploring
these issues with stakeholders.
Comment: A few commenters
recognized that the HAC payment
provision targets a portion of an MSDRG payment and were unsure how this
concept could be transferred to the
physician office setting. Further, several
commenters mentioned bundled or
global payment as a more rational way
to pay for Medicare services, which
could obviate the need for a healthcareacquired condition payment provision.
Response: As commenters noted, the
HAC payment provision prohibits
payment for a portion of the MS-DRG
when a HAC occurs in the inpatient
setting. In that the HAC payment
provision results in payment being
adjusted to a lower level of payment, the
basic payment concept could be made
applicable to other Medicare payment
settings. Implementation of such
policies would likely depend on the
specific coding and payment systems
used for each payment system.
Comment: Several commenters
expressed the need to adjust for patientspecific factors like severity of illness
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and patient compliance. A few
commenters stated that unlike the
inpatient setting, the physician office
setting does not lend itself to close
monitoring of patient compliance.
Response: We recognize that certain
beneficiaries may pose a greater risk of
contracting a healthcare-acquired
condition. We also note that providers
must carefully consider those risk
factors to avoid preventable conditions.
We refer readers to the FY 2009
Inpatient Prospective Payment System
final rule (73 FR 48487 through 48488
(https://edocket.access.gpo.gov/2008/
pdf/E8-17914.pdf)) where we discussed
risk-adjustment as a potential
enhancement to the IPPS HAC
provision.
Comment: Many commenters believe
that it could be more effective to combat
healthcare-acquired conditions by
adjusting payments based on a
provider’s rates of healthcare-associated
conditions rather than to directly adjust
the payment for an individual service.
Response: We agree that capturing
rates of healthcare-associated conditions
and using those rates for performancebased payment may be a more
sophisticated and effective way to adjust
payment. Rates of healthcare-associated
conditions may be good candidates as
possible quality measures for VBP
programs like the PQRI as discussed in
more detail in section II.O. of this final
rule with comment period. Further, the
ESRD pay-for-performance program and
the forthcoming Physician VBP Plan
Report to Congress may also address
healthcare-associated conditions.
Comment: Commenters raised
concern regarding the use of financial
incentives to combat healthcareassociated conditions. Many
commenters suggested that CMS should
encourage compliance with evidencebased guidelines rather than use direct
payment adjustments to address
healthcare-associated conditions in the
physician office setting.
Response: We agree that it is
important for Medicare providers to
provide care that is consistent with
evidence-based guidelines. We intend to
consider all of our statutory and
regulatory authorities, including the
implementation of quality measures and
payment adjustments, to encourage
provision of care that is consistent with
evidence-based guidelines. We look
forward to working with stakeholders to
further identify and apply available
methods to combat healthcare-acquired
conditions.
Comment: Many commenters
supported the alignment of incentives
across all Medicare settings of care.
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Response: We appreciate the public’s
support of our efforts to align incentives
across all Medicare payment settings.
We look forward to working with
stakeholders to expand VBP initiatives
in all Medicare payment settings.
Further, we intend to host a public
listening session toward the end of CY
2008 to discuss the expansion of the
HAC payment provision, specifically
targeting both the inpatient and hospital
outpatient department (HOPD) settings
of care.
I. Independent Diagnostic Testing
Facility (IDTF) Issues
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 Medicareenrolled 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 the proposed rule, we proposed 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 furnishing
diagnostic testing services for Medicare
beneficiaries, and who have enrolled in
the Medicare program as a clinic, group
practice, or physician’s 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. Because these
comments were outside of the scope of
the provisions in the CY 2008 PFS
proposed rule, we were not able to take
action regarding these comments in the
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CY 2008 PFS final rule with comment
period.
In the CY 2009 PFS proposed rule, we
stated that we are concerned that—
• Certain physician entities,
including physician group practices,
and clinics, can enroll as a group
practice or clinic and furnish 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.
Therefore, we proposed 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
patients may make 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 proposed that physician entities do
not need 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 proposed 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
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services; and (2) is subject to the
provisions found 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).’’ As discussed in
section II.J. of this preamble, we
proposed 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 maintained 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 proposed 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 solicited 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.
We stated in the proposed rule that
while we believe that most physician
and NPP organizations utilize
nonphysician personnel described in
§ 410.33(c) to furnish diagnostic testing
services, we also solicited comments on
whether physician or NPPs conduct
diagnostic tests without benefit of
qualified nonphysician personnel and
under what circumstances the testing
occurs.
While we proposed to apply the IDTF
requirement to all diagnostic testing
services furnished in physicians’ offices,
we stated that we were 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
solicited comments 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 solicited comments 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 X-
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ray, ultrasound, and fluoroscopy). We
also solicited comments on what would
be appropriate criteria to limit this
provision.
Finally, since these changes, if
adopted, would take time to implement
for suppliers that have enrolled in the
Medicare program, we proposed an
effective date of September 30, 2009,
rather than the effective date of the final
rule with comment period. For newly
enrolling suppliers, we proposed the
effective date of this rule which is
January 1, 2009.
With the enactment of section 135 of
the MIPPA legislation and after
reviewing public comments, we are
deferring the implementation of these
proposals while we continue to review
the public comments received on this
provision and we will consider
finalizing this provision in a future
rulemaking effort if we deem it
necessary. Section 135 of the MIPPA
requires that the Secretary establish an
accreditation process for those entities
furnishing advanced diagnostic testing
procedures which 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) by
January 1, 2012.
Accordingly, we are not adopting our
proposal to require physicians and NPPs
to meet certain quality and performance
standards when providing diagnostic
testing services, except mammography
services, within their medical practice
setting and have removed the
paperwork burden and regulatory
impact analysis associated with this
provision in this final rule with
comment period.
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 proposed
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
furnished. 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 furnish.
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While we understand that a mobile
entity can furnish diagnostic testing
services in various types of locations,
we stated that we believe that it is
essential that mobile entities use
qualified physicians or nonphysician
personnel to furnish diagnostic testing
procedures and that the enrolled mobile
supplier bill for the services furnished.
We maintain that it is essential to our
program integrity and quality
improvement efforts that an entity
furnishing mobile diagnostic testing
services complies with the performance
standards for IDTFs and bill the
Medicare program directly for the
services furnished 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, we
proposed that this provision would be
effective with the effective date of this
final rule with comment period.
Comment: Several commenters
supported our proposal to require
mobile diagnostic service providers to
enroll in Medicare as IDTFs and to be
required to bill Medicare directly for the
TC services they furnish.
Another commenter stated that this
provision creates a single, universal
quality standard for outpatient imaging
that eliminates any possible inequity in
standards that could exist between
office-based imaging and IDTF imaging.
Several other commenters support the
concept that all providers and suppliers
serving Medicare beneficiaries must be
enrolled to be eligible to receive
payments from Medicare, directly or
indirectly.
Response: We agree with these
comments and thank the commenters
for their support.
Comment: One commenter stated that
this provision would eliminate two
distinct and unfair competitive
advantages that mobile cardiac nuclear
imaging providers enjoy under existing
regulations. One advantage is the ability
to operate under a ‘‘mobile’’ Nuclear
Regulatory Commission Radioactive
Materials license, which does not
require the same regulatory filings as
fixed-site cardiac nuclear medicine
laboratories, and in the case of some
state Radioactive Materials licenses, it
does not subject the mobile provider to
the same pre-opening inspections that
the fixed sites are subject to. Second,
some mobile providers are able to
secure accreditation from certain
accrediting agencies that furnish a
global, or ‘‘hub’’, accreditation
certification.
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Response: We thank the commenter
for its support.
Comment: One commenter stated that
our proposal to require mobile providers
to enroll in Medicare as IDTFs, be
subject to all IDTF performance
standards, and to bill Medicare directly,
not only would it create a single,
universal standard for quality among all
imaging providers, but would also level
the playing field in the competitive
market for management services for
companies which provide high quality
fixed site programs for Medicareenrolled physician practices and their
Medicare enrollees.
Response: We appreciate the
comments and thank the commenter for
their support.
Comment: One commenter supports
the proposal requiring these entities to
enroll in Medicare and as such, for them
to be required to abide by applicable
Medicare policies. The commenter
continued to state that they do not
oppose the direct billing requirement
but that if the proposal is finalized, CMS
needs to provide a great amount of
detail in how the provision will work
and its impact on hospital billing
practices.
Response: We have revised the
provision at § 410.33(g)(17) for those
IDTFs that are billing under
arrangement with hospitals as described
in section 1862(a)(14)of the Act and
§ 482.12(e).
Comment: Several commenters urged
CMS to clarify that its proposal to
require mobile testing entities to bill
directly for services they furnish would
not apply when such services are
furnished ‘‘under arrangement to
hospital inpatients and outpatients.’’ In
addition, these commenters
recommended that mobile diagnostic
testing facilities that furnish these
services to hospitals be excluded from
the proposed IDTF performance
standards.
Response: Although we are requiring
all mobile entities that furnish
diagnostic testing services to enroll in
the Medicare program, we are not
requiring mobile testing entities to bill
directly for the services they furnish
when such services are furnished under
arrangement with hospitals as described
in sections 1861(w)(1) and 1862(a)(14)of
the Act and § 482.12(e).
Comment: One commenter urges CMS
to exclude from the definition of entities
furnishing mobile diagnostic testing
services those entities that do the
following: lease equipment and provide
technicians who conduct diagnostic
tests in the office of the billing
physician or physician organization;
and furnish testing under the
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supervision of a physician who shares
an office with the billing physician or
physician organization.
Response: We disagree with the
commenter. We maintain that a mobile
entity providing diagnostic testing
services must enroll for any diagnostic
imaging services that it furnishes to a
Medicare beneficiary, regardless of
whether the service is furnished in a
mobile or fixed base location so that
CMS knows which entity is providing
these diagnostic testing services.
Comment: One commenter stated that
the proposed IDTF performance
standard is contrary to the Medicare
‘‘under arrangement’’ provisions and if
the IDTF performance standard were
extended into the hospital setting, it
would prohibit hospitals from providing
diagnostic imaging services under
arrangement and present significant
administrative and operational
challenges for hospitals and their
patients.
Response: We agree and have revised
the provision to account for mobile
IDTFs billing under arrangement with
hospitals as described in sections
1861(w)(1) and 1862(a)(14)of the Act
and § 482.12(e).
Comment: Several commenters
requested that we not require mobile
units that furnish diagnostic testing
services to enroll in Medicare or be
required to bill for all of the services
they furnish.
Response: We disagree with the
commenters. In order to maintain
program integrity and enable CMS to
monitor services furnished by mobile
units providing diagnostic testing
services, we maintain that a mobile
entity providing diagnostic testing
services must enroll for diagnostic
imaging services that it furnishes to a
Medicare beneficiary, regardless of
whether the service is furnished in a
mobile or fixed base location. We are
requiring these mobile IDTFs to bill for
the services that they furnish unless
they are billing under arrangement with
hospitals.
Comment: One commenter stated the
contractual arrangement between
mobile diagnostic imaging services
companies and hospitals are
commonplace throughout the United
States health care industry and these
long-standing arrangements, which can
be short-term or long-term depending
upon hospital demand, service a variety
of important needs within the hospital
and provider community, including a
valuable means to address capacity,
volume and equipment cost issue and
limitations imposed by State Certificate
of Need (CON) requirements.
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Response: We understand the
commenters’ concerns and we are
requiring these mobile IDTFs to bill for
the services that they furnish unless
they are billing under arrangement with
hospitals.
Comment: One commenter suggested
that we should provide clear and
concise guidance on billing protocols
that permit hospitals to continue billing
for mobile diagnostic testing services
furnished as inpatient and outpatient
hospital services and allow
informational billing (that is, no
payment impact) by the mobile entities
through the use of a billing modifier.
Response: We believe these comments
are outside the scope of the rule.
Comment: One commenter does not
support a restriction of an enrolled
provider/supplier that would preclude
them from arrangements that are
allowed under the purchased diagnostic
test or purchased interpretation rules
due to their method of connecting a
patient with testing equipment.
Response: We understand the
commenters’ concerns and we are
requiring these mobile IDTFs to bill for
the services they furnish unless they are
billing under arrangement with
hospitals.
Comment: One commenter states that
they believe that the provision of
diagnostic and other therapeutic
services by a contracted provider to
registered inpatients and outpatients is
fully consistent with longstanding
Medicare provisions expressly
permitting hospitals to furnish services
directly or ‘‘under arrangements,’’ and
that the mobile entities that may furnish
these services under arrangement would
not bill directly for their services but
would be under the control of another
entity.
Response: We agree with the
commenter and although we are
requiring all mobile entities that provide
diagnostic testing services to enroll in
the Medicare program, we are not
requiring mobile testing entities to bill
directly for the services they furnish
when such services are furnished under
arrangement to hospitals.
After reviewing public comments, we
are finalizing the provision at
§ 410.33(g)(16), which would require
that entities furnishing mobile
diagnostic services enroll in Medicare
program as an IDTF regardless of where
the services are furnished. By enrolling
in the Medicare program, CMS or our
contractor can determine if the mobile
IDTF meets all of the performance
standards found in § 410.33(g) and that
its owners are not otherwise excluded or
barred from participation in the
Medicare program. We believe that
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requiring mobile IDTFs to enroll in
order to furnish services to Medicare
beneficiaries is consistent with the
existing enrollment regulation found at
§ 424.505 which states that to receive
payment for covered Medicare items or
services from either Medicare or a
Medicare beneficiary, a provider or
supplier must be enrolled in the
Medicare program. Moreover, by
requiring mobile IDTFs to enroll in
order to furnish services to Medicare
beneficiaries, the Medicare contractor
will be able to certify that mobile IDTFs
are in compliance with the requirements
for enrolling and maintaining
enrollment set forth at § 424.520.
Finally, the owner of a mobile IDTF is
responsible for ensuring that the mobile
IDTF meets all applicable regulatory
requirements to maintain their
enrollment in the Medicare program.
In addition, we are finalizing the
provision at § 410.33(g)(17) requiring
that mobile diagnostic services bill for
the mobile diagnostic services that they
furnish, unless the mobile diagnostic
service is part of a hospital service and
furnished under arrangement with that
hospital as described in section
1862(a)(14)of the Act and § 482.12(e). To
ensure that IDTFs are actually
furnishing services under arrangement
with a hospital, we will require that
mobile IDTFs provide documentation of
the arrangement with their initial or
revalidation enrollment application, or
change in enrollment application.
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 proposed to limit
the claims submission timeframe after
revocation. In § 424.535(g) (redesignated
as § 424.535(g)), we proposed 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 stated that
this change is necessary to limit the
Medicare program’s exposure to future
vulnerabilities from physician and NPP
organizations and individual
practitioners that have had their billing
privileges revoked. Accordingly, the
proposed change would allow a
Medicare contractor to conduct focused
medical review on the claims submitted
during the claims filing period to ensure
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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 also proposed
to add a new provision at § 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.
Comment: Several commenters
recommended that we withdraw all of
our proposed changes to the
requirements for physician enrollment
in Medicare, including changes to the
effective date of billing privileges,
eligibility to participate in the program,
enrollment processing, reporting
requirements, and revocation of billing
privileges. Many of the commenters
were concerned that it would be
burdensome to add new requirements
where they must submit all claims
within 60 days of the effective date of
revocation because of the time it takes
to process claims and that it would be
easier to leave the retrospective billing
rules as they are.
Response: We are not adopting this
recommendation. Instead, we will
respond to the specific comments
received in response to our specific
proposals.
Comment: Several commenters
requested that we make no revisions to
current physician and NPP enrollment
rules at this time.
Response: We are not adopting this
recommendation. Instead, we will
respond to the specific comments
received in response to our specific
proposals.
After reviewing public comments, we
are finalizing the provisions found at
§ 424.535(h) (formerly § 424.535(g)) that
require a revoked physician
organization, a physician, a NPP, or an
IDTF to submit all outstanding claims
not previously submitted within 60
calendar days of the revocation effective
date. Since IDTFs are already afforded
approximately 30 days notification
before the effective date of revocation
(except for revocations identified in
§ 405.874(b)(2) and § 424.535(f) of this
final rule), we believe that almost 90
days is more than sufficient time to file
any outstanding claims.
In addition, we are finalizing the
provisions found at § 424.44(a) related
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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 or
IDTFs. We revised this provision so that
it is consistent with § 424.521 which
limits the ability of these suppliers to
bill Medicare retrospectively.
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J. Physician and Nonphysician
Practitioner (NPP) Enrollment Issues
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 that were furnished 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 final rule
with comment period, we believe that
an NPP includes, but is not limited to,
the following individuals:
anesthesiology assistants, audiologists,
certified nurse midwives, certified
registered nurse anesthetists (CRNA),
clinical social workers, nurse
practitioners (NPs), physician assistants
(PAs), clinical psychologists,
psychologists billing independently,
speech language pathologists, 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 furnished 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 allowed to bill Medicare prior
to their enrollment date. Therefore, it is
possible that the physician and NPP
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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 furnished up to
27 months prior to their enrolling in the
Medicare program. In the proposed rule,
we stated our concern 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 solicited 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
furnished 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
to their National Provider Identifier
(NPI). Physicians and NPPs are eligible
for NPIs and may apply for their NPIs
at any time. To enroll in Medicare, a
physician or NPP must have an NPI. If
an enrollment application is received
that is absent the NPI, it will be rejected.
The NPI regulation, at 45 CFR
162.410(a)(1), requires a health care
provider who is a covered entity under
HIPAA to obtain an NPI. At 45 CFR
162.410(b), the NPI regulation states that
a health care provider who is not a
covered entity under HIPAA may obtain
an NPI. The definition of ‘‘health care
provider’’ is found at 45 CFR 160.103.
The preamble of the NPI final rule (69
FR 3450) states that HIPAA does not
prohibit a health plan from requiring its
enrolled health care providers to obtain
NPIs if those health care providers are
eligible for NPIs (that is, that they meet
the definition of ‘‘health care
provider’’). With exceptions for the two
entities that are eligible to enroll in
Medicare but are not eligible for NPIs,
Medicare requires all providers,
including physicians and NPPs, who
apply for enrollment to have NPIs, and
to report them on their Medicare
enrollment applications. When applying
for NPIs, providers indicate they are one
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of the following: An Entity type 1 (an
individual person, such as a physician
or an NPP, to include a sole proprietor/
sole proprietorship); or an Entity type 2
(an organization, which is any legal
entity other than an individual).
The date of approval is the date that
a designated Medicare contractor
determines that the physician or NPP
organization or individual practitioner
meets all Federal and State
requirements for their supplier type
Given this first approach, in proposed
§ 424.520, we stated that 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 a NPI.’’
We also stated in the CY 2009 PFS
proposed rule that we believe that this
approach—
• Prohibits physicians, 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
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 that are allowed to
bill for services only after they are
approved to participate in the Medicare
program. Surveyed suppliers are those
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 furnishing 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
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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,
newly enrolling physicians 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
proposed § 424.520, we stated that 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 a FFS
contractor; or (2) The date that the
physician or NPP organization or
individual practitioner first furnished
services at a new practice location.’’
We also stated in the CY 2009 PFS
proposed rule that 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
physicians 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 physicians 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
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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.
To assist physician and NPP
organizations and individual
practitioners in enrolling and updating
their existing enrollment record, we
established an Internet-based
enrollment process known as the
Internet-based Provider Enrollment,
Chain and Ownership System (PECOS)
that is more streamlined and efficient
than the traditional paper-application
enrollment method.
By using Internet-based PECOS, we
expect that physician and NPP
organizations and individual
practitioners will be able to reduce the
time necessary to enroll in the Medicare
program or to 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 also proposed 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 a clinic or
a group practice. In addition to
establishing an organizational structure
as a sole proprietorship, physicians and
NPPs are able to establish various
organizational relationships including
corporations, professional associations,
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partnerships, limited liability
corporations, and subchapter S
corporations. We believe that the
proposed definition would include sole
proprietorships that receive a type 1 NPI
and any organizational entity that is
required to obtain a type 2 NPI.
Comment: Several commenters urged
CMS to adopt the proposal to limit
retrospective billing to the later of the
date of filing or date the practice
location was established.
Response: We agree with these
commenters and have finalized this
approach in this final rule with
comment period.
Comment: One commenter
recommended that we should not
implement the revised effective date for
billing privileges until January 1, 2010.
Response: We disagree with the
commenter because we believe that it is
essential that Medicare only pay for
services to eligible practitioners that are
qualified to bill for services.
Comment: Several commenters
recommended that we refrain from
implementing any proposed changes to
the effective date of Medicare billing
privileges until the Provider Enrollment,
Chain and Ownership System (PECOS)
system is fully functional and a
thorough discussion is held between all
affected parties and/or all current
National Provider Identifier (NPI)
applications are processed.
Response: While we understand this
comment, we disagree with these
commenters. By establishing an
effective date of billing for physicians,
NPPs, and physician and NPP
organizations, we believe that Medicare
will only pay for services furnished by
licensed practitioners that meet all of
the Medicare program requirements. In
addition, we implemented the NPI on
May 23, 2008. Accordingly, we do not
believe that there is a nexus between the
implementation of the effective date for
physicians, NPPs, and physician and
NPP organizations and the
implementation of the Internet-based
PECOS or the implementation of the
NPI.
Comment: One commenter suggested
that payment not commence until the
provider’s application has been
processed and approved and that if the
approval date is after the date the
provider first started to render services,
then payments will be paid retroactive
to the rendering date. The commenter
also requested that CMS implement an
electronic enrollment processing
system.
Response: We are finalizing a
provision that allows physicians, NPPs
(including CRNAs), and physician or
NPP organizations to retrospectively bill
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for services up to 30 days prior to their
effective date of billing when the
physician or NPP organization met all
program requirements, including State
licensure requirements, where services
were provided at the enrolled practice
location prior to the date of filing and
circumstances precluded enrollment in
advance of providing services to
Medicare beneficiaries in
§ 424.521(a)(1). Further, we are
implementing Internet-based PECOS for
physicians and NPPs by the end of CY
2008 to facilitate the electronic
enrollment process.
Comment: One commenter suggested
that the enrollment payment policy for
CRNAs remain as it is.
Response: We are finalizing a
provision that allows physicians, NPPs
(including CRNAs), and physician or
NPP organizations to retrospectively bill
for services up to 30 days prior to their
effective date of billing when the
physician or nonphysician organization
has met all program requirements,
including State licensure requirements,
where services were provided at the
enrolled practice location prior to the
date of filing and circumstances, such
as, when a physician is called to work
in a hospital emergency department
which precluded enrollment in advance
of providing services to Medicare
beneficiaries in § 424.521(a)(1).
Comment: One commenter would like
to recommend that CMS not make the
new Web-based enrollment system too
cumbersome. Their concerns are based
on current member experiences with the
IACS for review of PQRI claims. The
requirements for the practice to
designate a security officer, submit old
IRS documents, etc., are extremely timeconsuming, burdensome and serve as
disincentives to physician participation.
Response: This comment is outside
the scope of the proposed rule and
cannot be addressed within this final
rule.
Comment: One commenter asked that
if we adopt either of these enrollment
strategies, we should consider an
exemption for hospital-based emergency
physicians and NPP organizations to
allow a period of retroactive billing and
payment once an enrollment application
is approved by the contractor.
Response: We are finalizing a
provision that allows physicians, NPPs,
and physician or NPP organizations to
retrospectively bill for services up to a
30 days prior to their effective date of
billing when the physician or NPP
organization met all program
requirements, including State licensure
requirements, where services were
furnished at the enrolled practice
location prior to the date of filing and
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circumstances precluded enrollment in
advance of providing services to
Medicare beneficiaries in
§ 424.521(a)(1).
Comment: One commenter stated that
they support our efforts to ensure
participating providers and suppliers of
services are complying with Medicare
program requirements in a matter
consistent with policy and are not
attempting to ‘‘game’’ the system.
However, should we move forward with
this proposal, the commenter advises
the drafting of policies to identify
unusual activities beyond the control of
the provider or supplier, such as
hurricanes and other natural disasters,
that necessitate a provider or supplier of
services obtaining additional Medicare
billing privileges in order to provide
services.
Response: We are finalizing a
provision that allows physicians, NPPs,
physician or NPP organizations to
retrospectively bill for services up to a
90 days prior to their effective date of
billing when the physician or NPP
organization met all program
requirements, including State licensure
requirements, services were furnished at
the enrolled practice location prior to
the date of filing and a Presidentiallydeclared disaster under the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. §§ 5121–5206
(Stafford Act) precluded enrollment in
advance of providing services to
Medicare beneficiaries in
§ 424.521(a)(2).
Comment: A large number of
commenters do not support either
approach and go further to state that
both proposals will negatively impact
the ability of hospital emergency
departments and their physicians to
meet their statutory obligations under
the Emergency Medical Treatment and
Active Labor Act (EMTALA). Many of
these commenters stated that in these
emergency department situations,
physicians are hired in very short
timeframes, sometimes just days before
they begin working in a new location
that they cannot submit an enrollment
application in such a short timeframe.
They also continued to state that if we
adopted the enrollment provisions as
proposed, these emergency department
enrollment situations would cause the
physicians to forgo payment because
they would not be able to submit an
enrollment application before they
begin furnishing services. Other
commenters were opposed to both
proposed approaches to limit
retrospective billing after enrolling in
the Medicare program and asked that we
withdraw any proposed changes to the
enrollment process.
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Response: We disagree with the
commenters. We believe that we have
adopted an approach that balances the
need to strengthen the Medicare
enrollment process, protect the
Medicare Trust Funds, and ensure that
individual practitioners and physician
and NPP organizations receive payment
for services furnished to Medicare
beneficiaries. The revised provision
allows up to 30 days after furnishing
services to submit an enrollment
application (and up to 90 days when a
Presidentially-declared disaster under
the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42
U.S.C. 5121–5206 (Stafford Act)) so the
physician, NPP or physician or NPP
organization has sufficient time to
submit their enrollment application.
Comment: One commenter stated that
they believe that it is unreasonable to
expect physicians to furnish care to
their patients without the ability to be
paid for their services until they are
officially enrolled in the Medicare
program.
Response: While we agree that
physicians should be reimbursed for the
services furnished to Medicare
beneficiaries, we also believe that
physicians, NPPs and physician and
NPP organizations are responsible for
enrolling or making a change in their
enrollment in a timely manner. In most
cases, we believe that physicians and
NPP practitioners can submit an
enrollment application prior to
providing Medicare services at a new
practice location.
Comment: One commenter stated that
in emergency room situations these
enrollment scenarios will not work and
gives the example using the second
approach of when an emergency
department is in desperate need of a
provider. The department is able to
obtain a physician almost immediately
who is already employed within the
organization and is also an approved
provider in the Medicare program at
their current practice location. Simply
because the events in this example
happened so quickly, the physician’s
CMS–855R was submitted to the
Medicare contractor 1 week after he
began providing services in the
emergency department. If the second
approach were in effect, 1 week of
services the physician furnished to
Medicare beneficiaries in the emergency
department would be denied as his
enrollment at this location was not in
effect.
Response: We understand this
commenter’s concerns and are finalizing
a provision that allows physicians,
NPPs, physician or NPP organizations to
retrospectively bill for services up to 30
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days prior to their effective date of
billing when the physician or NPP
organization met all program
requirements, including State licensure
requirements, where services were
furnished at the enrolled practice
location prior to the date of filing and
circumstances precluded enrollment in
advance of providing services to
Medicare beneficiaries in
§ 424.521(a)(1).
Comment: One commenter stated that
should we adopt the second approach,
they requested that a standard be
established that defines what constitutes
the receipt of a substantially complete
application form for which the effective
date under approach two may be
established. This approach would
address the situations where denial
errors and clarifications can be
corrected without delaying the effective
date.
Response: As a general rule,
applicants are given at least 30 days to
cure any deficiencies/technicalities
before a contractor rejects an enrollment
application (see § 424.525). During the
application review process, contractors
notify applicants about missing
information and documentation and
afford the applicant at least 30 days to
correct deficiencies. With the
implementation of Internet-based
PECOS, we expect that physicians and
NPPs using the Web process will
significantly decrease the number of
incomplete applications and the need
for contractors to request additional
information. With the implementation
of this final rule, we would require
contactor to deny, rather than reject
paper or Web applications when a
physician, NPP, or physician or NPP
organization fails to cure any
deficiencies/technicalities.
Comment: One commenter urged
CMS to adopt a standard establishing
that the filing date for an enrollment
application is when a signed application
is first received by a contractor and not
when the application is deemed
complete and ready for approval by that
contractor. Otherwise, delays associated
with contractor processing could
become a larger concern.
Response: We agree with this
commenter and have adopted the ‘‘date
of filing’’ as the date that the Medicare
contractor receives a signed provider
enrollment application that the
Medicare contractor is able to process to
approval.
Comment: Several commenters
strongly opposed the approach where
billing privileges would be conveyed
based on the date of approval by the
Medicare contractor and maintain that
tying billing privileges to a contractor’s
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approval of a practitioner’s Medicare
enrollment application could create
unintended access problems for some
patients. Other commenters added that
in certain situations, the physicians
would furnish services and would not
be able to be compensated which they
do believe is an unintended
consequence by CMS.
Response: We agree with the
commenters and have not adopted the
proposed approach as it was proposed
but revised it so that it would establish
the effective date of billing for
physicians, NPPs, and physician and
NNP organizations as the later of date of
filing of a Medicare enrollment
application that was subsequently
approved by a Medicare contractor or
the date they first began furnishing
services at a new practice location.
Comment: The suggestion to use the
Medicare contractor’s date of approval
as the initial enrollment date would
mean that an employer can expect to
generate no revenue from a new hire for
a minimum of 3 to 6 months, which is
unacceptable.
Response: As stated above, we have
not adopted the proposed approach but
revised it so that it would establish the
effective date of billing for physicians,
NPPs, and physician and NNP
organizations as the later of date of
filing of a Medicare enrollment
application that was subsequently
approved by a Medicare contractor or
the date they first began furnishing
services at a new practice location.
Comment: One commenter supports
the establishment of an effective billing
date for physicians, NPPs, and
physician and NPP organizations as the
later of: (1) The date of filing of a
Medicare enrollment application that
was subsequently approved by a
Medicare contractor; or (2) the date an
enrolled physician or NPP first started
furnishing services at a new practice
location. The commenter further urges
the agency to tie enrollment and when
billing privileges begins to offering
services at a new practice location.
Response: We appreciate this
comment and have adopted a modified
approach where that date of filing is the
effective date of billing for physicians,
NPPs, and physician and NPP
organizations.
Comment: One commenter requests
that current procedures change and
allow enrollment applications to be
submitted 60 days prior to a change.
Response: We disagree with the
commenter and maintain that
permitting billing 30 days before the
filing of an enrollment application will
provide a sufficient amount of time in
most cases.
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Comment: One commenter stated that
the establishment of an effective billing
date for physicians, NPPs, and
physician and NPP organizations as:
(1) The date of filing of a Medicare
enrollment application that was
subsequently approved by a Medicare
contractor; or (2) the date an enrolled
physician or NPP first started furnishing
services at a new practice location will
improve patient access to Medicare
providers, since patients could be
scheduled for appointments based on
the date that a Medicare provider
submits an enrollment application to
the Medicare Administrative Contractor
(MAC). This also allows new Medicare
providers more flexibility when
initiating services under Medicare.
Response: We thank the commenter
for their support of this provision.
Comment: Several commenters
recommend that providers should be
able to submit enrollment applications
with a requested effective date.
Response: We believe limiting
retrospective payments will ensure that
physicians, NPPs, and physician and
NPP organizations will ensure that only
qualified practitioners are able to bill for
services furnished to Medicare
beneficiaries. Moreover, we believe that
establishing an effective date of
Medicare billing privileges and
establishing limited retrospective
payments will encourage physicians,
NPPs, and physician and NPP
organizations to enroll and maintain
their enrollment in with the Medicare
program. However, the effective date of
billing privileges is 30 days prior to the
later of the date an enrollment
application is filed or the date services
were furnished at a new practice
location.
Comment: Several commenters urged
CMS to retain its current retrospective
billing policy for physicians and NPPs.
However, these commenters stated that
if CMS revised its retrospective billing
policy for physicians, NPPs, and NPP
organizations that they preferred option
2 (establishment of an effective billing
date for physicians, NPPs, and
physician and NPPs as the later of: (1)
The date of filing of a Medicare
enrollment application that was
subsequently approved by a Medicare
contractor; or (2) the date an enrolled
physician or NPP first started furnishing
services at a new practice location),
which limited retrospective billing to
the later of the date of filing or the date
the practice location was established.
Response: We agree with these
commenters and have adopted this
approach in this final rule.
Comment: One commenter
recommends allowing those physicians
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who are about to complete their
fellowship to submit an application to
Medicare for a generic provider number
which at a later date can be linked to an
eventual employer.
Response: Since we do not establish
a provisional enrollment status for
physicians or other suppliers, but rather
convey billing privileges to a NPI, we
disagree with this commenter.
Comment: One commenter suggests
that to improve the Medicare enrollment
process, the processing of enrollment
applications should take 30 to 45 days
versus a 90 to 120 days activity.
Medicare could follow the process
employed by private payers and utilize
one central repository for provider
enrollment given that all processes
basically require the same essential
information.
Response: CMS already utilizes a
single national repository of enrollment
information. The national enrollment
repository is known as the Provider
Enrollment, Chain and Ownership
System (PECOS).
Comment: Several commenters
supported our proposed approach that
would establish the initial enrollment
date for individual practitioners and
physician and NPP organizations as the
date an enrolled supplier started
furnishing services at the new practice
location as it would be the fairest option
for all enrollees.
Response: We appreciate this
comment, and as stated above, we are
finalizing this proposal with revisions
so that it would establish the effective
date of billing for physicians, NPPs, and
physician and NNP organizations as the
later of date of filing of a Medicare
enrollment application that was
subsequently approved by a Medicare
contractor or the date they first began
furnishing services at a new practice
location.
Comment: One commenter stated that
physician practices that allow new
practitioners to treat Medicare patients
before their applications are approved
run the risk of submitting an application
that is ultimately returned on a
technicality, forcing them to begin the
application process all over again.
Response: As stated above, to address
the concern that enrollment
applications are returned based on a
technicality, we expect that physicians
and NPPs using the Web process will
significantly decrease the number of
incomplete applications and the need
for contractors to request additional
information. With the implementation
of this final rule, we would require
contactor to deny, rather than reject
paper or Web applications when a
physician, NPP, or physician or NPP
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organization fails to cure any
deficiencies/technicalities.
Comment: One commenter stated that
new physicians’ practices must begin
paying rent, salaries and other expenses
the minute they become operational, if
not before. This commenter also stated
that many of these physicians are
already forced to take out loans to pay
expenses in the early days of operation
until they enroll and can bill for
services furnished in the interim.
Finally, this commenter stated that our
proposal to limit retrospective billing to
the later of the date of filing or the date
the practice location is operational will
inhibit the ability of physicians and
NPPs to create their own organizations,
and instead, it will force them to join
already existing entities.
Response: We do not believe that the
Medicare program pays for services
rendered prior to the date a new
practice location is established. As
described above, the physician or NPP
would be allowed to file his or her
enrollment application 30 days prior to
the opening of new practice location
and receive payments for services
provided from the day the practice
location was established or opened
assuming that the physician met State
licensing requirements and other
Medicare program requirements at the
time of filing and subsequently
thereafter.
Comment: One commenter urged
CMS to withdraw any proposed changes
to the enrollment process, but stated
that they would consider supporting
limiting retrospective billing to the later
of the date of filing or the date the
practice location is operational but only
after Internet-based PECOS has been
proven to facilitate timely enrollment
processing (fewer than 30 days).
Another commenter supported CMS
implementing this requirement once the
enrollment processing time is at a
period of 30 to 45 days.
Response: We do not believe that a
change to the effective date of Medicare
billing privileges has a nexus to the
implementation of the Internet-based
PECOS.
Comment: One commenter suggested
that we allow 30 to 60 days before
submission of an application to serve as
the date of approval because this
timeline will allow for practices to
obtain provider signatures, licenses, and
certifications so that we can approve
back to the date of licensure and/or the
date the provider started furnishing
services with a minimum of 30 to 60
days.
Response: We disagree with this
commenter, because physicians, NPPs
and physician and NPP organizations
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should have all the necessary licenses/
certifications at the time of filing, not 30
or 60 days after filing an enrollment
application.
Comment: Several commenters asked
for clarification of the ‘‘date of filing’’
when submitting an application for
enrollment.
Response: We have clarified the ‘‘date
of filing’’ in the provision of the final
rule as the date that the Medicare
contractor receives a signed provider
enrollment application that the
Medicare contractor is able to process to
approval.
Comment: One commenter
recommends that we wait until the
Internet-based PECOS system has been
released and used by the physician
population before making these
changes.
Response: As stated above, we do not
believe that a change to the effective
date of Medicare billing privileges has a
nexus to the implementation of the
Internet-based PECOS.
Comment: Several commenters
recommended that we shorten the
period of time during which
retrospective billing is permitted from
27 months to 12 months. Another
commenter stated that reducing
retrospective billing from 27 months to
12 months would provide sufficient
time for enrollment to occur, reduce the
possibility of improper billing and
eliminate the unreasonable
administrative burden that the our
alternatives would place on all new
physicians.
Response: We appreciate these
comments, but continue to believe that
allowing retrospective billing for 12
months prior to enrollment poses a
significant risk to the Medicare program.
Accordingly, with the implementation
of this final rule, physician and NPPs
and physician and NPP organizations
will have a limited time period to
submit claims before the effective date
of their respective Medicare billing
privileges.
Comment: Several commenters urged
CMS to establish the new Web-based
program and determine the accuracy
and ease of the system before making
new enrollment rules. This commenter
also stated the new Web-based system
should be far easier to use than the
current process.
Response: We agree with these
commenters and, as previously stated,
we expect to implement Internet-based
PECOS for individuals by the end of CY
2008.
Comment: One commenter stated that
they have been advised by Medicare
that this change means upon receiving
notice that a graduate nurse anesthetist
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had passed his or her certifying exam
that the ‘‘graduate’’ now a CRNA can
retain any Medicare claims from his or
her certification date forward and then
submit these held claims upon receiving
his or her National Provider Identifier
(NPI). Further, the commenter stated
that Medicare carriers have allowed this
payment practice with the
understanding that graduate nurse
anesthetists are qualified to bill
Medicare for their services upon their
certification date.
Response: While we understand this
comment, we believe that physicians
and NPPs must meet all State licensing
requirements before Medicare can
convey billing privileges. Moreover,
with the implementation of this final
rule, physician and NPPs and physician
and NPP organizations will have a
limited time period to submit claims
before the effective date of their
Medicare billing privileges.
Comment: One commenter stated that
they understand that there have been
Medicare Carriers that allow CRNAs to
hold their claims and back bill for up to
1 year prior to the date they are
certified, consistent with Medicare
payment policy.
Response: We believe that physician
and NPPs must meet all State licensing
requirements before Medicare can
convey billing privileges. Moreover,
with the implementation of this final
rule, physician and NPPs and physician
and NPP organizations will have a
limited time period to submit claims
before their effective date of Medicare
billing privileges.
Comment: One commenter urged
CMS to adopt the Council for Affordable
Quality Healthcare’s (CAQH) Universal
Credentialing Database (UCD) as its
provider credentialing information
gathering tool. This commenter stated
that CAQH has over 600,000 providers
and suppliers in its database and is
working with hospitals and State
Medicaid programs as well.
Response: While we appreciate this
comment, this comment is outside the
scope of this final rule. However, it is
important to understand that CMS’
national enrollment repository, PECOS,
maintains Medicare enrollment records
on more than 610,000 physicians,
280,000 NPPs, 75,000 single specialty
clinics, and 130,000 multi-specialty
clinics. In addition, PECOS maintains
enrollment records for all other provider
and supplier types, except durable
medical equipment, prosthetics,
orthotics, and supplies (DMEPOS)
suppliers. This means that we have
collected and retained current
enrollment information on
approximately 80 percent of physicians
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and 98 percent of the NPPs enrolled in
and billing the Medicare program. In
addition, since the information obtained
during the enrollment process for
physician and NPP organizations
updates our claims payment systems for
Part B services, we are able to help
ensure claims processing accuracy by
utilizing its existing processes.
Comment: One commenter urged
CMS to produce educational materials
beyond the vague tip sheets located at
the beginning of each application. In
addition, this commenter recommends
that we develop a series of frequently
asked questions on Medicare provider
enrollment.
Response: We already maintain a link
to provider enrollment frequently asked
questions at https://www.cms.hhs.gov/
MedicareProviderSupEnroll. In
addition, this Web site maintains more
than 10 different provider enrollment
outreach documents that the public can
view online or download for future
reference.
In an attempt to ensure that all
physicians, NPPs, and NPP
organizations are aware of and comply
with their reporting responsibilities, we
developed and posted reporting
responsibilities for physicians, NPPs,
and physician organizations on our
provider enrollment Web page at
https://www.cms.hhs.gov/
MedicareProviderSupEnroll on
September 16, 2008. In addition, on
September 17, 2008, we issued a listserv
announcement to those individual
physicians and NPPs who subscribe to
the CMS Physician Open Door Forum
and to more than 150 national and
State-level organizations that subscribe
to the CMS provider partnership
network. We also expect that contractors
will continue to notify physicians and
NPP organizations about their reporting
responsibilities by listserv, bulletin,
and/or direct mail in FY 2009 and
beyond. With the implementation of
this final rule with comment period on
January 1, 2009, we will revise the
educational materials found on our Web
site and distribute this information
through our established communication
channels. Finally, we will post
educational material, including fact
sheets and frequent asked questions,
regarding Internet-based PECOS as soon
as this system is available to the public.
Comment: One commenter asked that
we create extensive educational
programming on provider enrollment
for both our contractors and providers to
ensure that both sides thoroughly
understand the process and
expectations.
Response: We provide Medicare
contractors with manual instructions
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and other directives to ensure consistent
enrollment processing. In addition, as
stated above, we are disseminating
additional educational materials to
ensure that the public understands their
reporting responsibilities.
Comment: One commenter suggested
a process for the Medicare Contractor to
notify the provider that the application
has been received and it is being
processed to ensure the approved billing
date is the same between the provider
and the Medicare contractor.
Response: Due to cost constraints,
most Medicare contractors can not
notify an applicant when their paper
enrollment application is received;
however, Medicare contractors are
required to notify an applicant when the
application is missing information or if
additional supporting documentation is
needed to process the enrollment
request.
Comment: One commenter stated that
the NPP nomenclature is ambiguous
because CMS lists all suppliers as NPPs
(including audiologists and physical
and occupational therapists) on page
38535 of the proposed rule, rather than
limiting this term to physician
assistants, nurse practitioners, and
clinical nurse specialists as defined in
Medicare policy manuals.
Response: We have revised this rule
to refer to individual physicians and
NPPs and physician and NPP
organizations.
Comment: One commenter urges CMS
to require contractors to provide
accurate and complete information to
applicants, allowing their practices to
complete their enrollment applications
in an easy and efficient manner.
Response: While we appreciate this
comment, this comment is outside the
scope of this proposed rule and can not
be addressed in this final rule.
Comment: One commenter urged
CMS to require Medicare contractors to
communicate requests for additional
information in such a manner that the
communications can be easily tracked.
Response: We believe that this issue
is outside the scope of the proposed rule
and can not be addressed in this final
rule.
Comment: One commenter urged a
‘‘timeout’’ on the release of new rules
and regulations surrounding the
Medicare provider enrollment process.
Response: We recognize that we have
published several regulations within the
last 3 years and a number of program
integrity manual instructions designed
to strengthen the enrollment process.
However, we continue to believe that
CMS must maintain the flexibility to
issue regulations in accordance with the
Administrative Procedures Act.
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Comment: One commenter urged
CMS to clarify the apparent inconsistent
policies on revalidation as set forth in
the April 21, 2006 provider enrollment
rule titled, ‘‘Medicare Program:
Requirements for Providers and
Suppliers to Establish and Maintain
Medicare Enrollment (CMS–6002–F)’’
and the June 27, 2008 provider
enrollment rule titled, ‘‘Medicare
Program: Appeals of CMS or CMS
Contractor Determinations When a
Provider or Supplier Fails to Meet the
Requirements for Medicare Billing
Privileges (CMS–6003–F).’’
Response: In response to comment in
the April 21, 2006 final rule (71 FR
20754), we stated, ‘‘We expect that a feefor-service contractor would notify the
provider or supplier in writing
regarding the need to revalidate its
enrollment information. Once notified,
providers and suppliers would be
expected to review, update, and submit
any changes and supporting
documentation regarding the enrollment
record within 60 days. If no changes
have occurred, a provider or supplier
would simply sign, date, and return the
revalidation application.’’ In addition,
we stated in the provisions of the final
rule that, ‘‘We will contact all providers
and suppliers directly as to when their
5-year revalidation cycle starts
beginning with those providers and
suppliers currently enrolled in the
Medicare program but that have not
submitted a completed enrollment
application. The revalidation process
would ensure that we collect and
maintain complete and current
information on all Medicare providers
and suppliers and ensure continued
compliance with Medicare
requirements. In addition, this process
further ensures that Medicare
beneficiaries are receiving items or
services furnished only by legitimate
providers and suppliers, and
strengthens our ability to protect the
Medicare Trust Funds.’’
In response to a comment in the June
27, 2008 final rule (73 FR 36448), we
stated, ‘‘Therefore, providers and
suppliers that enrolled in the Medicare
program prior to 2003, but who have not
completed a Medicare enrollment
application since then, have had more
than 2 years to come into voluntary
compliance with our enrollment criteria
by submitting a complete enrollment
application. With this final rule, we are
again notifying physicians, providers,
and suppliers that they may voluntarily
complete and submit a Medicare
enrollment application and the
necessary supporting documentation
prior to our formal request for
revalidation. Accordingly, providers
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and suppliers who choose not to come
into voluntary compliance or fail to
respond to a revalidation request in a
complete and timely manner fail to
satisfy our enrollment criteria and may
be subject to revocation of their billing
privileges.’’ Accordingly, we do not
believe that these policies are
inconsistent. We continue to encourage
all physicians, providers, and suppliers
to update their enrollment records when
a reportable change occurs, and absent
a reportable change we encourage all
physicians, providers, and suppliers
who have not updated their enrollment
record within the last 5 years to do so
in advance of contractor’s revalidation
request. Once we initiate revalidation
efforts, physicians and other providers
and suppliers will only be provided 60
days to respond to a contractor’s
request.
Comment: One commenter stated that
we should monitor, track, and make
publicly available the average length of
time from submission of an enrollment
application for new procedures to the
time the Medicare contractors actually
process and notify the providers of
acceptance of that enrollment
application.
Response: While we monitor
contractor provider enrollment
processing timeliness using PECOS, we
do not currently calculate an average
length of time for initial enrollments,
changes, and reassignments. We will
consider calculating the average length
of time for initial enrollment
applications, changes of information,
and reassignments and making this
information available to the public.
Comment: One commenter requests
that if we finalize these provisions, a
notice of onsite review should be
provided 14 days in advance to allow
the pharmacy to appropriately schedule
for the onsite review.
Response: We disagree with this
commenter. We believe that onsite
reviews provide CMS and our
contractors a valuable tool to ensure that
providers and suppliers are in
compliance.
Comment: Several commenters
remain concerned about the failure of
CMS to permit the use of electronic
signatures and electronic documents
which would provide practitioners and
practices the opportunity to complete
and submit the entire application
package online.
Response: This comment is outside
the scope of this proposed rule and can
not be addressed in this final rule.
Comment: One commenter
recommended that we hold an open and
thorough dialogue with its contractors
and the provider community regarding
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the enrollment process as it currently
stands and the problems encountered by
all.
Response: We believe that this issue
is outside the scope of the proposed rule
and can not be addressed in this final
rule.
Comment: One commenter stated that
they support CMS and the
establishment of an electronic
enrollment process but they do not
believe it will address the provisions in
the rule.
Response: While we do not expect
that Internet-based PECOS will remedy
all provider enrollment processing
issues, we do believe that an Internetbased enrollment process will allow
physicians and other providers and
suppliers to reduce the time necessary
to enroll or make a change in enrollment
in the Medicare program.
Comment: One commenter
recommended that we establish
streamlined and user-friendly
procedures that will encourage high
rates of physician participation in the
Medicare program.
Response: We appreciate this
comment and believe that Internetbased PECOS will allow physicians and
NPPs the ability to enroll or make
changes in their enrollment records
faster and more accurately than the
paper-based enrollment process.
Comment: One commenter
commended CMS for PECOS as it will
provide timely ease of use for
enrollment as well as updating the
enrollment record.
Response: We appreciate this
comment.
Comment: One commenter requested
that we consider modifying existing
provider enrollment applications to
include an attestation statement for
which an applicant would attest to
those certain requisite program
requirements having been met prior to
the filing of the application.
Response: This recommendation is
outside the scope of the proposed rule
and can not be addressed in this final
rule.
Comment: One commenter stated that
we should provide notice 14 days in
advance of conducting an onsite review
and that reviews on Mondays should be
avoided.
Response: This comment is outside
the scope of this proposed rule and can
not be addressed in this final rule.
Comment: One commenter urged that
CMS and the NSC coordinate so that
only a single onsite review would be
required and the least disruptive to an
operation.
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Response: This comment is outside
the scope of the proposed rule and can
not be addressed in this final rule.
After reviewing public comments, we
are finalizing the definition of
‘‘physician or nonphysician practitioner
(NPP) organization’’ at § 424.502 as ‘‘any
physician or NPP organization that
enrolls in the Medicare program as a
sole proprietorship or any
organizational entity.’’ Organizational
entities include, but are not limited to,
limited liability corporations,
Subchapter S corporations,
partnerships, professional limited
liability corporations, professional
corporations, and professional
associations.
After reviewing public comments, we
are finalizing the provision at
§ 424.520(d) to state that we will
establish an effective date of billing for
physicians, NPPs and physician and
NPP organizations that would be the
later of: (1) The date of filing of a
Medicare enrollment application that
was subsequently approved by Medicare
contractor (that is, carrier, fiscal
intermediary or A/B Medicare
Administrative Contractor); or (2) the
date a physician, NPP or physician and
NPP organization first started furnishing
services at its new practice location.
In § 424.521, Request for Payment by
Physicians, Nonphysician Practitioners,
Physician or Nonphysician
Organizations, we are finalizing the
proposals.
In § 424.521(a)(1), we are finalizing a
provision that allows physicians, NPPs,
physician or NPP organizations to
retrospectively bill for services up to 30
days prior to their effective date of
billing when the physician or NPP
organization met all program
requirements, including State licensure
requirements, services were furnished at
the enrolled practice location prior to
the date of filing and circumstances
precluded enrollment in advance of
providing services to Medicare
beneficiaries. Thus, physicians, NPPs,
and physician or NPP organizations
would be limited to receiving
reimbursement for services for a
maximum of 30 days prior to filing an
enrollment application that was
subsequently approved by a Medicare
contractor.
In § 424.521(a)(2), we are finalizing a
provision that allows a physician, NPP,
and physician or NPP organization to
retrospectively bill for services up to 90
days prior to their effective date of
billing privileges when the physician or
NPP organization met all program
requirements, including State licensure
requirements, services were furnished at
the enrolled practice location prior to
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the date of filing, and a Presidentiallydeclared disaster under the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. §§ 5121–5206
(Stafford Act) precluded enrollment in
advance of providing services to
Medicare beneficiaries.
While these changes limit the
retrospective payments that a physician,
NPP, or physician and NPP organization
may obtain from the Medicare program,
we believe that this approach will
ensure that a Medicare contractor is able
to verify that a physician, NPP or
physician and NPP organization meets
all program requirements at the time of
filing, including State licensure. In
addition, this approach will afford
Medicare beneficiaries the appropriate
protections under the statute,
regulations, and CMS policy.
To ensure that eligible physicians,
NPPs or physician and NPP
organizations receive reimbursement for
services furnished, we will require that
Medicare contractors deny Medicare
billing privileges when a Medicare
contractor is not able to process an
incomplete enrollment application that
is submitted by a physician, NPP or
physician and NPP organization. This is
a change from our earlier final rule,
‘‘Medicare Program; Requirements for
Providers and Suppliers to Establish
and Maintain Medicare Enrollment,’’
(CMS–6002–F) which was published on
April 21, 2006. In this earlier
rulemaking effort, we stated that we
would reject an incomplete enrollment
application. In order to provide
physician and NPP organizations and
individual practitioners with the
opportunity to preserve an initial
application filing date, we will deny
incomplete applications for these
supplier types. We believe that
§ 424.530(a)(1) permit a Medicare
contractor to deny an incomplete
enrollment application.
By denying billing privileges for
enrollment in the Medicare program or
to establish a new practice location,
rather than rejecting an enrollment
application, physicians, NPPs or
physician and NPP organizations will be
afforded appeal rights which will
preserve the original date of filing the
application. Reimbursement for services
furnished back to the effective date of
billing will be permitted as long as the
applicant submits a corrective action
plan or appeal in accordance with
§ 405.874 and submits the necessary
information to cure any application
deficiencies. However, if the applicant
does not submit a corrective action plan
or appeal within the timeframe
established in § 405.874, then the
applicant would not preserve the right
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69773
to bill the Medicare program for services
furnished from the date of the initial
filing of the application or the date the
practitioner or organization first started
furnishing services at its new practice
location.
We are also adopting the ‘‘date of
filing’’ as the date that the Medicare
contractor receives a signed provider
enrollment application that the
Medicare contractor is able to process to
approval. If the Medicare contractor
denies an enrollment application that is
not later overturned during the appeals
process, the new date of filing would be
established when a physician or NPP
organization submits a new enrollment
application that the contractor is able to
process to approval.
PECOS is the system that supports the
Medicare provider and supplier
enrollment process by collecting and
storing provider and supplier
information obtained from the Medicare
enrollment application (that is, the
CMS–855). The PECOS database retains
enrollment information on Part A
providers that bill fiscal intermediaries
(FIs) or A/B Medicare Administrative
Contractors (A/B MAC) and Part B
providers, including physicians and
NPPs that bill carriers or A/B MACs.
Medicare contractors use PECOS to
establish new enrollment records for
providers and suppliers, update
provider and supplier information, and
process requests from individual health
care practitioners for assignment of
benefits. PECOS standardized the
Medicare enrollment process and
supplies enrollment data to the Part A
and Part B claims processing systems.
In June 2002 and November 2003, we
implemented PECOS for fiscal
intermediaries (FIs) and carriers
respectively. Today, PECOS is used by
carriers, FIs, and A/B MACs to enter
data submitted on the Medicare
enrollment application. However, by
establishing an Internet-based
enrollment process, we will allow
providers and suppliers (except
suppliers of durable medical equipment,
prosthetics, orthotics, and supplies
(DMEPOS)) suppliers, the option of
enrolling or making a change in their
Medicare enrollment information via
the Internet.
Internet-based PECOS will allow
Medicare providers and suppliers to
enroll or make a change in their
Medicare enrollment record. The
primary objectives for the Web
enablement of PECOS are to: (1) Reduce
the time necessary for providers and
suppliers to enroll or make a change in
their Medicare information; (2)
streamline the enrollment process for
providers and suppliers; (3) allow
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physicians and NPPs to manage their
enrollment information and verify their
reassignments of benefits; and (4)
reduce the administrative burden
associated with completing and
submitting enrollment information to
Medicare.
Additional information regarding
Internet-based PECOS will be made
available later this year. This
information will be posted on the
Medicare provider/supplier enrollment
Web site at https://www.cms.hhs.gov/
MedicareProviderSupEnroll.
With the implementation of an
Internet enrollment process referred to
as the Internet-based PECOS, the date of
filing for individual practitioners
submitted through Internet-based
PECOS is the date the Medicare
contractor receives both: (1) An
electronic version of the enrollment
application; and (2) a signature page
containing an original signature that the
Medicare contractor processes to
approval. The date of filing for
organizational entities submitted
through Internet-based PECOS is the
date the Medicare contractor receives all
of the following: (1) An electronic
version of the enrollment application;
(2) a signature page containing an
original signature that the Medicare
contractor processes to approval.
To address public concerns regarding
the burden and complexity associated
with the Medicare enrollment process,
we will implement Internet-based
PECOS in three distinct phases. We will
implement Internet-based PECOS for all
individual physicians and NPPs
enrolling or making a change to an
existing enrollment record in Phase I. In
Phase II, we will implement Internetbased PECOS for all organizational
providers and suppliers, except
DMEPOS suppliers, enrolling or making
a change to an existing enrollment
record. In Phase III, we will implement
Internet-based PECOS for DMEPOS
suppliers.
Based on current operating
assumptions, we expect to begin
implementation of Phase I by the end of
CY 2008, with full implementation
scheduled for completion in January
2009. We also expect to make Internetbased PECOS available to physicians
and NPPs in all States, including
California, Missouri, and New York.
Phase II is tentatively scheduled for
implementation beginning in Spring
2009, with full implementation
scheduled for completion by June 30,
2009. Phase III is tentatively scheduled
for implementation in CY 2010.
Since Internet-based PECOS is a
scenario-driven application process
with front-end editing capabilities and
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built-in help screens, we believe that
this new enrollment application process
will significantly simplify and
streamline the enrollment process for
physicians, providers and suppliers,
reduce the time necessary to enroll or
make a change to a Medicare enrollment
record, reduce the administrative
burden associated with completing and
submitting enrollment information to
Medicare, decrease the errors during the
application submission process, and
allow physicians and NPPs to take
personal responsibility for their
Medicare enrollment in a timely
manner. Moreover, unlike the paperbased enrollment process, Internetbased PECOS’ scenario-driven
application process will ensure that
prospective providers and suppliers or
enrolled providers and suppliers only
complete and submit the information
necessary to apply or make a change in
their Medicare enrollment record.
Physicians and NPPs will no longer see
questions that are not applicable for
their supplier-type.
While we will encourage all
physicians, NPPs, physicians and NPP
organizations and other providers and
suppliers to utilize Internet-based
PECOS when it is made available for
their provider/supplier type and their
State, all providers and suppliers will
continue to have the option of
submitting an enrollment application by
paper.
In order to use Internet-based PECOS
to enroll or make a change in an
enrollment record, physicians and NPPs
will be required to use the User ID and
user password obtained when applying
for or updating their National Provider
Identifier (NPI) with the National Plan
and Provider Enumeration System
(NPPES). Accordingly, physicians and
NPPs will need to know their NPPES
User ID/password information before
trying to enroll or change their
enrollment record with Medicare via
Internet-based PECOS. To ensure
privacy and security for these
individual practitioners, we encourage
that physicians and NPPs to reset their
user password prior to initiating their
first enrollment action via Internetbased PECOS, reset their user password
at least once a year thereafter, and that
physicians and NPPs not share their
NPPES User ID/password with billing
agents, clearinghouses, academic
medical institutions, or staff within
their practice.
Physicians and NPPs choosing to use
billing agents, clearinghouses, academic
medical institutions, etc. will be
required to submit a paper enrollment
application to enroll or make a change
in their Medicare enrollment record.
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In order to use Internet-based PECOS
to enroll or make a change in an
organizational enrollment record, we
will verify that the authorized official
associated with the Medicare
enrollment record is employed by the
organization and is authorized by the
organization to submit or make changes
to the organization enrollment record.
Over the last 2 years, we have stressed
the importance of filing a complete
application at the time of filing or in
response to a contractor’s request for
additional information. However,
Medicare contractors continue to report
that a significant number of applications
are incomplete at the time of filing or
that applicants do not respond timely
and completely to a contractor’s request
for additional information.
Finally, in the April 21, 2006 final
rule, physicians, NPPs, and physician
and NPP organizations learned about
our intent to begin a revalidation
process.
Specifically, § 424.515 states that a
provider or supplier (other than a
DMEPOS supplier), must resubmit and
recertify the accuracy of its enrollment
information every 5 years. Therefore,
physicians, NPPs and physician and
NPP organizations that enrolled in the
Medicare program prior to 2003, but
who have not completed a Medicare
enrollment application since then, have
had more than 2 years to come into
voluntary compliance with our
enrollment criteria by submitting a
complete enrollment application. To
date, approximately 80 percent of the
enrolled physicians and 98 percent of
NPPs have updated their Medicare
enrollment record within the last 5
years.
To ensure that Medicare only pays
eligible physicians and NPPs, we are
again notifying physicians and NPPs
that they may voluntarily complete and
submit a Medicare enrollment
application and the necessary
supporting documentation prior to our
formal request for revalidation. In
accordance with the existing provision
at § 424.535(a)(1)(ii), providers and
suppliers who choose not to come into
voluntary compliance or fail to respond
to a revalidation request within 60 days
of the Medicare contractor’s request may
be subject to the revocation of their
billing privileges.
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 CY 2005
had tax debts totaling over $1 billion.
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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
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
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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
whom a tax delinquency exists and we
are unable to directly levy future
payments through the FPLP. While we
did not propose this change in this
year’s PFS proposed rule, 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 for whom we are
unable to directly levy future payments
through the FPLP. In addition, we
expect to conduct outreach regarding
our implementation of the FPLP in FY
2009.
We believe that this change, if
proposed and adopted, would prohibit
an individual with a tax delinquency
from shielding their future payments
through reassignment of benefits to a
third party. Finally, since the tax
delinquency would be 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 a serious tax delinquency.
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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
payments to an individual who has not
met his or her obligation to pay their tax
debts.
Finally, we solicited comments on
whether we should consider revoking a
physician’s 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 also
solicited 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.
Comment: One commenter
recommends an alternative to payment
denial where an individual with a tax
delinquency has reassigned their
benefits to a group. The commenter
suggested that the government garnish a
portion of the individual practitioner’s
salary directly, as appropriate. Another
commenter does not believe it is
appropriate to penalize all of the
partners in a practice, when only one
individual is guilty of tax evasion. One
commenter requests that we define, in
greater detail, the term ‘‘reliable
information,’’ and also that we assure
some formal type of appeals process
apart from a simple rebuttal. Another
commenter questions if there is a
mechanism in place whereby a potential
new hire can be held harmless should
his or her potential employer find itself
in a delinquent status within a 12month period. One commenter
questions whether the burden of
reporting an adverse legal action would
be placed upon the individual saddled
with the action rather than his or her
group managing partners, for sometimes
the principals are not aware of the
actions of their employees. Another
commenter stated that at a minimum,
the third party involved should be sent
notification of the provider’s revoked
billing privileges 18 months before the
date of revocation. One commenter
believes that this provision is not
logistically possible because it raises too
many issues, including taxpayer
privacy, equal opportunity employment
concerns, and perhaps even
whistleblower triggers regarding
noncompliance.
Response: Section 189 of the MIPPA
requires that CMS take all necessary
steps to participate in the Federal
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Payment Levy Program (FPLP) under
section 6331(h) of the Internal Revenue
Code of 1986. The FPLP process allows
CMS to levy current and future
payments until the tax delinquency is
eliminated.
After reviewing comments received in
response to our solicitation for
comments regarding whether we should
consider revoking billing privileges or
taking some other administrative action
when a physician or NPP has a Federal
tax delinquency that cannot be levied
through the FPLP process, we are
considering whether future rulemaking
or administrative action is needed in
this area. We appreciate the public
insight regarding our solicitation for
comments and will consider these
comments in developing any future
rulemaking proposals; however, we
continue to maintain that physicians
and NPPs should resolve any existing
Federal tax delinquency before enrolling
in the Medicare program or as soon as
practical if the physician is enrolled in
Medicare.
3. Denial of Enrollment in the Medicare
Program (proposed § 424.530(a)(6) and
(a)(7))
Currently, owners, authorized
officials, and delegated officials of
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 furnished 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
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
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an administrative action against it and
bill and receive payment under another
NPI.
Consistent with existing § 405.371, we
will impose a payment suspension
when we possess reliable information
that an overpayment or fraud, or willful
misrepresentation exists, or that
payments to be made may not be
correct. Suspension procedures give
providers and suppliers an opportunity
to 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 apply 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, or if the
overpayment determination is upheld
on appeal, we will initiate a recovery
action.
Accordingly, we proposed 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 proposed to allow a Medicare FFS
contractor 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 suspension has
been terminated or the Medicare
overpayment has been repaid in full.
Specifically, we proposed 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 stated that we believe that the
change to our denial policy would help
protect the Medicare program from
unscrupulous or problematic physician
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and NPP organizations and individual
practitioners. Moreover, we believe this
change would: (1) Allow 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.
Comment: Several commenters stated
that our proposal to deny additional
billing privileges to a physician or an
NPP when the physician or NPP is
suspended or has an outstanding
overpayment is a denial of due process
and is in conflict with the principle of
innocent until proven guilty.
Response: We believe that we have an
obligation to protect the Medicare
program from inappropriate payments.
Conversely, physicians and NPPs have
an obligation to the Medicare program
to resolve payment suspensions and
overpayment actions in a timely
manner. Finally, as a payer of health
care, we believe that additional billing
privileges should not be conveyed to a
physician, NPP or owners, authorized
and delegated officials who have an
existing payment suspension or
overpayment. To grant additional billing
privileges to individuals with an
existing payment suspension or
overpayment exposes the Medicare
Trust Funds to additional risks.
With Medicare’s implementation of
the NPI on May 23, 2008, Medicare
contractors no longer issue billing
numbers to providers and suppliers
participating in the Medicare program.
However, Medicare contractors do
convey billing privileges to providers
and suppliers that have an NPI and meet
all of the program requirements for their
provider or supplier type. Once
enrolled, providers and suppliers are
required to use their NPI to submit
claims to Medicare, and based on the
NPI final rule, organizations may obtain
one or more NPIs.
After reviewing public comments, we
are finalizing the provisions at
§ 424.530(a)(6) and (a)(7) to deny
enrollment applications for additional
Medicare billing privileges if a
physician, NPP, physician or NPP
organization has an existing payment
suspension or has an existing
overpayment that has not been repaid.
We believe that permitting a Medicare
contractor to deny enrollment
applications submitted by individual
practitioners, authorized officials,
delegated officials, and owners until
such time as the Medicare overpayment
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has been repaid in full will require
providers and suppliers to resolve
overpayments in a timely manner. Once
CMS has imposed a payment
suspension, a provider or supplier may
submit a rebuttal to CMS for the
purpose of reducing or terminating the
payment suspension. As long as the
payment suspension is effective, the
contractor has the task of making an
overpayment determination.
Specifically, we are adopting the
provision to deny enrollment to any
physician, or NPP current owner (as
defined in § 424.502), authorized or
delegated official who is participating in
the Medicare program and is under an
existing Medicare payment suspension
or has an outstanding overpayment that
has not been repaid in full. As adopted,
physicians and NPPs will not be
allowed to enroll and reassigning
payments to a third-party if the
individual practitioner has an existing
payment suspension or overpayment
that have not been repaid.
4. Reporting Requirements for Providers
and Suppliers (§ 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 final adverse 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 as described
in § 424.535(a)(3), or other final adverse
action, such as a revocation or
suspension of a license to a provider of
health care by any State licensing
authority, or a revocation or suspension
of accreditation, because reporting this
action may result in the revocation of
their Medicare billing privileges. Thus,
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unless CMS or our designated contractor
becomes aware of the conviction or final
adverse 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 final
adverse action after the fact, we have
lacked 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 adopting a
new § 424.516(d) which would establish
more stringent reporting requirements
for physician NPP organizations and
individual practitioners. (We proposed
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
proposed to add § 424.516(d)(1)(ii)
requiring all physician and NPP
organizations and individual
practitioners to notify our designated
contractor of any final adverse action
within 30 days. We stated that final
adverse actions include, but are not
limited to, felonies, license suspensions,
and the HHS 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 a final
adverse 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 final adverse action.
In addition, we added the word
‘‘final’’ to the beginning of the term
‘‘adverse legal action’’ in the regulation
text in § 424.535 on overpayment. We
define the term as a ‘‘final adverse
action’’ in the definition section at
§ 424.502 and want to be consistent
with that definition. Also, we want to be
consistent with our definition of this
term in the Durable medical Equipment
prosthetics Orthotics and Supplies
surety bond rule (CMS–6006–F).
Moreover, we want this term to be
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consistent with the definition of ‘‘final
adverse action’’ found in section
221(g)(1)(A) of the Health Insurance
Portability and Accountability Act
(HIPAA) of 1996. Finally, we believe
that a final adverse action has occurred
when the sanction is imposed and not
when a supplier has exhausted all of the
appeal rights associated with the action
itself.
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 a final adverse action
that occurred on June 30, 2007, that
physician may be subject to an
overpayment for all Medicare payments
beginning June 30, 2007 and have their
Medicare billing privileges revoked
effective retroactively back to June 30,
2007 as well.
Additionally, we proposed 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 furnished by
placing the physician and NPP
organizations and individual
practitioners into a new Core Based
Statistical Area (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 a final adverse 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 proposed to add § 424.535(a)(9)
which would specify that failure to
comply with the reporting requirements
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specified in § 424.516(d) would be a
basis for revocation. Additionally, we
proposed in § 424.565, ‘‘Failure to
comply with the reporting requirements
specified in § 424.516(d) would result in
a Medicare overpayment from the date
of a final adverse 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 final adverse 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–
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 1 year.
Comment: One commenter would like
to laud CMS for expounding on
reporting requirements for the updates
regarding address changes, as well as
reporting an adverse legal action in a
manner to be complete within 30 days.
The commenter continued to state that
failure to report changes in location,
leading to potential overpayment, and
revocation of Medicare billing privileges
needs to be highlighted for all providers.
Response: We appreciate this
comment and will consider expanding
this provision to all providers and
suppliers in a future rulemaking effort.
Comment: One commenter stated that
it disagrees with our assumption that all
payments subsequent to an adverse legal
action are collectable overpayments.
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Response: Since final adverse actions
such as Federal exclusion or debarment,
felony convictions as described in
§ 424.535(a)(3) or license suspension or
revocation that precluded continued
enrollment in the Medicare program.
Comment: One commenter stated that
while a CMS representative publicly
stated that the proposed rule should
have referenced adverse legal actions
that have been finally adjudicated, the
commenter recommends that CMS
clarify this language in the final rule.
Several commenters recommended that
only adverse legal actions that are
relevant to the practice of medicine
should be required to be reported to
CMS.
Response: Based on these comments,
we are adding a definition of a final
adverse action to § 424.502(a).
Specifically, we have defined a final
adverse action to mean one or more of
the following actions: (1) A Medicareimposed revocation of any Medicare
billing privileges; (2) Suspension or
revocation of a license to provide health
care by any State licensing authority; (3)
Revocation or suspension by an
accreditation organization; (4) A
conviction of a Federal or State felony
offense (as defined in § 424.535(a)(3)(i))
within the last 10 years preceding
enrollment, revalidation, or reenrollment; or (5) An exclusion or
debarment from participation in a
Federal or State health care program.
Comment: One commenter suggested
that we should clarify in the final rule
that with regard to adverse legal actions,
the requirements should apply only to
notification within 30 days of ‘‘final’’
legal actions that are relevant to or
otherwise impact the practice of
medicine.
Response: While we understand that
physicians and NPPs are afforded
different appeal rights depending on the
type of final adverse action, we do not
believe that it is appropriate to allow
physicians and NPPs to continue to
furnish services to Medicare
beneficiaries if their State medical
license has been suspended or revoked,
a Federal exclusion or debarment or
Medicare revocation has been imposed,
or the physician or NPP was found
guilty or pled to felony conviction as
described in § 424.535(a)(3).
Comment: One commenter believes
that if CMS wants to collect alleged
overpayments for services paid during
the 90 days as if they were performed
in a higher-paying locale, then they
should also pay the difference for
underpayments when a physician
provides services for up to 90 days in
a higher paying locality prior to
notifying CMS of the change in location.
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Response: We maintain that it is the
responsibility of the physician, NPP or
physician or NPP organization to update
their enrollment information within the
appropriate timeframes. Further, note
that CMS will not reprocess claims for
the services provided when there has
been a failure to report a change in
practice location.
Comment: Several commenters stated
that a State licensing board is the proper
authority to weigh the significance of
legal actions against a physician.
Another commenter stated that State
licensing and other requirements
already protect beneficiaries from the
most important kinds of issues that
could arise in medical care.
Response: While we agree that State
licensing boards are responsible for
determining whether an individual
meets or continues to meet the
qualifications for a specific State
medical license, we do not agree that a
State license is the only criteria that an
individual must maintain in order to
receive billing privileges from the
Medicare program.
Comment: One commenter stated that
they do not oppose changing the time
period for reporting adverse legal
actions from 90 days to 30 days, as
generally payments should not be made
under these circumstances.
Response: We appreciate this
comment.
Comment: One commenter stated that
they did not agree that a change in
practice location should be treated as an
urgent matter that would support a
retroactive revocation of billing
authority.
Response: We disagree with this
commenter. Since physicians and NPPs
receive payments in part on locality
adjustments based on the place of
service, we believe that physicians,
NPPs, and physician and NPP
organizations are responsible for
updating their enrollment record within
30 days of a change in practice location.
It is also important to note that we
already have existing authority to
revoke the billing privileges of a Part B
supplier, including physicians and
NPPs, if CMS or our contractor
determines that upon an on-site review
or other reliable evidence that the
supplier is not operational (see
§ 424.535(b)(5)).
Comment: One commenter stated that
they oppose changing the time period
for reporting a change in location from
90 days to 30 days because the
physician is still eligible for payment
and Medicare’s vulnerability to
overpayments is limited.
Response: While we agree that a
physician may still be eligible to receive
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payment, the issue in question is the
amount of payment. Moreover, as a
payer of health care, we believe that
physicians and all other providers and
suppliers have a responsibility to
update their enrollment record when a
change in practice location occurs. This
will allow CMS or our contractor to
verify that services are actually
furnished at the practice locations
identified by the medical practices.
Comment: One commenter stated that
if we finalize our reporting
requirements, a better option would be
to limit the types of actions that are
reportable to similar actions that are
required to be reported to the National
Practitioner Data Bank (NPDB) which
was established by the Congress to
address the need to improve the quality
of medical care by encouraging State
licensing boards, health care entities
such as hospitals, and professional
societies to identify and discipline those
who engage in unprofessional behavior,
as well as restrict a practitioner’s ability
to move from State to State without
disclosure of previous adverse action
history.
Response: We disagree with this
commenter. In considering the types of
events that should be reported within 30
days of the reportable event, with this
final rule with comment period, we
have limited the types of reportable
events to three specific types of events:
(1) Change in ownership, (2) final
adverse actions, and (3) change in
practice location. We believe that the
failure to report any of these types of
reportable events may result in
payments to the wrong organization,
erroneous payments if the physician or
NPP payment no longer meets State
licensure requirements, or payments in
the wrong amount when a change in
practice location impacts the payment
to a physician, NPP or physician or NPP
organization.
Comment: One commenter stated that
our proposal to revoke billing privileges
for a period of not less than 1 year for
failure to comply with the proposed 30day reporting period is a harsh and
unjust penalty for a minor paperwork
offense.
Response: While we understand this
commenter’s concern, we believe that
physicians, NPPs, physician and NPP
organizations have an obligation to
report certain changes, including State
license suspensions and revocations,
felony convictions as described in
§ 424.535(a)(3), Federal debarments and
exclusions, within 30 days since these
adverse actions may affect a physician,
NPP or physician or NPP organization’s
ability to continue to participate in the
Medicare program.
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Comment: One commenter urged
CMS to consider that the failure to
notify Medicare contractors of a change
in location is an oversight rather than a
true attempt to defraud the Medicare
program.
Response: Since physicians, NPPs,
and physician and NPP organizations
routinely notify State medical societies,
vendors, employees, utility companies,
leasing companies, and others prior to a
change in practice location, we disagree
with this commenter that change in
location is an oversight.
Comment: One commenter stated that
that while there is a need to maintain
timely provider records and track
Medicare payments, proposed penalties
for failure to report an address change
promptly are so out of proportion to the
offense as to be draconian.
Response: We disagree with this
commenter. As stated above, we
understand that physicians, NPPs, and
physician and NPP organizations
routinely notify other payers and
affiliated business partners about a
change of practice location in advance
of the change. In addition, to ensure
payment accuracy, it is essential that
physicians, NPPs, and physician and
NPP organizations report changes in
practice locations prior to change, but
not later than 30 days after the
reportable event.
Comment: One commenter stated that
it seemed sufficient to collect any
overpayment from providers that file
their change of address notice within
the traditional 90-day window for
updating enrollment records.
Response: As a payer of health care,
it is essential that we make every
attempt to make correct payments for
services furnished by qualified
providers and suppliers. To help ensure
that we are making the correct payments
the first time, we believe that it is
necessary that physicians, NPPs, and
physician and NPP organizations update
their enrollment records when a change
in practice location occurs.
Comment: One commenter urges CMS
to withdraw the proposal to establish
authority to require that physicians
report a change in ownership, ‘‘any’’
adverse legal action, or change in
practice location within 30 days since
these events may be unrelated to the
Medicare program and the reporting
time frame is unduly burdensome to
physicians.
Response: We disagree with this
commenter. Since June 20, 2006,
physicians and NPP organizations have
been required to report a change in
ownership within 30 days and changes
in practice locations and final adverse
actions within 90 days (see
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§ 424.516(d)). Since we are aware of
situations where physicians and NPPs
have not reported State license
suspensions/revocations or final adverse
actions which may affect a physician or
NPPs eligibility to participate in the
Medicare program, we believe that it is
essential to establish more stringent
reporting requirements than in the past.
We believe that these requirements
along with corresponding enforcement
procedures will encourage physicians,
NPPs and physician and NPP
organizations to report changes in
ownership, final adverse actions, and
changes in practice location in a timely
manner (that is, 30 days.)
Comment: One commenter stated that
‘‘any adverse legal action’’ is not
defined; therefore a 30-day reporting
requirement is unreasonable as are the
other proposed requirements. The
commenter also stated that we should
save our severe penalties for proven
fraudulent behavior, not minor clerical
oversights.
Response: We disagree with this
commenter that failure to report a final
adverse action is a minor clerical
oversight. Since reporting a final
adverse action may affect a physician or
NPP’s ability to continue to participate
in the Medicare program, we
understand why these actions may not
be reported to a Medicare contractor;
however, we believe that final adverse
actions, including State licensing
suspensions and revocations, should be
reported within 30 days of the
reportable event, even if the physician
or NPP plans on appealing the final
adverse action. By reporting the final
adverse action within 30 days, the
Medicare program will carefully review
any revocation action and exercise its
discretion as to whether to impose a
revocation and the length of time of the
reenrollment bar.
Comment: One commenter stated that
a revocation of billing privileges seems
to be a disproportionately severe
penalty for infractions such as: (1)
Failure to report changes in ownership,
adverse legal actions, and changes in
practice location, or (2) not maintaining
ordering and referring documentation
for a 10-year period.
Response: We disagree with this
commenter. As stated above, we believe
reporting changes in ownership, final
adverse actions, and changes in practice
locations are essential to ensuring that
the Medicare program makes correct
payments to eligible practitioners and
organizations. We also believe that it is
essential that physicians and NPPs
maintain ordering and referring
documentation to support the claims
submissions.
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Comment: One commenter stated that
levying an overpayment for failure to
report a ‘‘reportable event,’’ within 30
days is excessive for what is likely an
honest oversight.
Response: We disagree with this
commenter that establishing an
overpayment is excessive when a
physician, NPP or physician and NPP
organization fails to report a final
adverse action, such as a State license
suspension or revocation or adverse
legal action, that may preclude
participation in the continued
participation in the Medicare program
in a timely manner (that is, 30 days).
Comment: One commenter stated that
Federal regulations regarding
overpayments are already established at
42 CFR part 405, therefore, changing the
provider enrollment requirements to
prevent overpayments is not necessary.
Response: We disagree with this
commenter because the existing
overpayment regulations do not allow
us to assess an overpayment based on
the failure of a physician, NPP, or
physician or NPP organizations to report
certain reportable enrollment events.
Comment: One commenter stated that
they were concerned over inconsistency
in the verbiage of this section where we
state in the CY 2009 PFS proposed rule
(73 FR 38538 through 38539) that billing
privileges may be revoked in one place
and in the other place state that they
would be revoked.
Response: We appreciate this
comment and have clarified in this final
rule to use the word, ‘‘may’’ when
referring to the revocation of Medicare
billing privileges.
Comment: One commenter
recommends that a 60-day limit be
imposed rather than the proposed 30
days for notifying CMS about a
‘‘reportable event.’’
Response: We believe that changes of
ownership, adverse legal actions, and
changes in practice locations can and
should be reported within 30 days of the
reportable event. By reporting these
types of reportable events within 30
days, the Medicare program can take the
necessary steps to ensure that we are
paying physicians and NPPs correctly
and ensure that only eligible physicians
and NPPs are enrolled in the Medicare
program.
After reviewing public comments, we
are finalizing the provision at proposed
§ 424.516(d) which would require
physicians, NPPs or physician and NPP
organizations to notify its Medicare
contractor of a change of ownership,
change in practice location or any final
adverse action within 30 days of the
reportable event. In addition, we believe
that physician and NPP organizations’
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and individual practitioners’ failure to
comply with the reporting requirements
within the time frame described above
may result in the revocation of Medicare
billing privileges and the imposition of
a Medicare overpayment from the date
of the reportable change. Specifically,
we believe that a final adverse action
may preclude payment, and thus,
establish an overpayment from the date
of the adverse legal 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 date of the adverse legal action.
In addition, physicians, NPPs, or
physician and NPP organizations who
voluntarily report a final adverse action
that prohibits further payment will have
their Medicare billing privileges
revoked and have an overpayment
assessed back to the date of the
reportable event. CMS has the discretion
to revoke the supplier’s billing
privileges. Moreover, revocation affords
the supplier appeal rights and by
reporting an adverse legal action within
30 days of the reportable event, a
physician or NPP or physician or NPP
organization may regain billing
privileges if the final adverse action no
longer impedes the applicant’s
reenrollment into the Medicare
program.
We are also finalizing the provision at
§ 424.516(d)(1)(iii) which requires
physicians, NPPs and physician and
NPP organizations to report a change of
practice location within 30 days. While
we may not revoke the billing privileges
of physicians, NPPs and physician and
NPP organizations if a change of
practice location is reported by the
practitioner or organization after the
prescribed 30-day timeframe, we will
assess an overpayment, if applicable, for
the difference in payment rates
retroactive to the date the change in
practice location occurred. In addition,
with limited exceptions such as a
Presidentially-declared disaster under
the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42
U.S.C. 5121–5206 (Stafford Act),
physicians, NPPs, and physician and
NPP organizations can report a change
of practice location in advance of the
reportable event. We note that
individual practitioners and physician
and NPP organizations routinely notify
staff, the U.S. Post Office, telephone and
electric companies, suppliers, vendors,
State medical associations and other
practitioner partners prior to a change in
practice location. Accordingly, we
believe that it is appropriate that
physicians and NPP organizations notify
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the Medicare contractor in advance of
any pending change of practice location,
but no later than 30 days after the
reportable event.
As such, we will not reprocess claims
for those individual practitioners and
physician and NPP organizations that
do not report a change of practice
location prior to a change in practice
location where the reported change
would result in an underpayment,
unless the change of location was the
direct result of a Presidentially-declared
disaster under the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121–5206
(Stafford Act). We believe that this
change will create an incentive for
physicians, NPPs, and physician and
NPP organizations to report changes in
practice locations prior to the change of
practice location or, at a minimum,
within the 30 days of the reportable
event.
Moreover, if we determine that a
change of practice location occurred and
it has not been reported within the 30
days of the reportable event, we may
revoke billing privileges and assess any
applicable overpayment for the
difference in payment rates retroactive
to the date the change in practice
location occurred. We believe that the
authority to revoke billing privileges has
already been established in
§ 424.535(a)(5)(ii).
We are finalizing the provision at
proposed § 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 also
finalizing the provision we proposed 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 a final
adverse 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 final adverse 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.
Based on public comments, we are
adding a definition of final adverse
action to § 424.502(a). A final adverse
action means one or more of the
following actions: (1) A Medicareimposed revocation of any Medicare
billing privileges; (2) Suspension or
revocation of a license to furnish health
care by any State licensing authority;
(3) Revocation or suspension by an
accreditation organization; (4) A
conviction of a Federal or State felony
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offense (as defined in § 424.535(a)(3)(i))
within the last 10 years preceding
enrollment, revalidation, or reenrollment; or (5) An exclusion or
debarment from participation in a
Federal or State health care program.
5. Maintaining Ordering and Referring
Documentation
We proposed 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 proposed to add
§ 424.535(a)(10) that would state that
failure to comply with the
documentation requirements specified
in § 424.516(f) would serve 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 proposed to codify the
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 submission and
subsequent 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 7 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
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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.
Comment: One commenter urged
CMS to adopt its proposal that would
specify that a provider or supplier is
required to maintain ordering and
referring documentation, including the
NPI received from the physician or
eligible NPP, for 10 years from the date
of service, but that this provision only
apply to services furnished on or after
the effective date of this final rule with
comment period.
Response: We agree with this
commenter in that we are basing the
ordering and referring record retention
requirement based upon the date of
service, however we are adopting the
provision for 7 years from the date of
service. We believe that this approach is
administratively consistent with current
manual record retention policy that
requires that suppliers retain ordering
and referring documentation for 7 years
from the date of billing. We maintain
that it is less burdensome for providers
and suppliers to maintain ordering and
referring documentation for 7 years from
the date of service rather than requiring
providers and suppliers to maintain
ordering and referring documentation
associated with the proposed provision
for 10 years after the date of payment.
Comment: One commenter disagrees
with increasing the retention of ordering
and referring documentation beyond the
current 7 years from the date of
payment. The commenter continued to
state that the provision as proposed may
represent an additional cost for 3 years
of additional record retention.
Response: As stated above, we are
establishing an ordering and referring
record retention period as 7 years from
the date of service.
Comment: One commenter believes
that CMS must understand that in
virtually all cases, the only information
the laboratory receives is the laboratory
requisition submitted by the physician.
Response: We continue to believe that
it is necessary that providers and
suppliers retain ordering and referring
documentation for services furnished 7
years from the date of service. However,
we understand that the supplier may
not maintain the NPI documentation for
each service, but the provider or
supplier must maintain sufficient
documentation to identify the
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individual who ordered or referred the
beneficiary for their services. In
addition, upon review, CMS or our
contractor may validate the ordering/
referring documentation maintained by
the billing provider or supplier with the
individual practitioner who ordered/
referred the beneficiary for these
services.
Comment: One commenter
recommends that CMS defer to the
judgment of the State boards of
pharmacy regarding the length of record
retention, and also allow offsite
electronic storage of ordering and
referring records.
Response: We appreciate the
importance of the requirements of State
boards of pharmacy; however, we
uphold that Medicare is a national
program and it is necessary to establish
national standards for maintaining the
ordering and referring record retention
period. We believe that this approach
will lead to consistency. Further, the
provisions of the final rule do not
preclude offsite or electronic storage as
long as these records are readily
accessible and retrievable.
Comment: One commenter proposes
CMS to abandon its proposal for the 10year record retention period and allow
pharmacies to follow record retention
requirements under State law.
Response: We appreciate the
importance of the requirements of State
boards of pharmacy, however we
uphold that Medicare is a national
program and it is necessary to establish
national standards for maintaining the
ordering and referring record retention
period. We believe that this approach
will lead to CMS consistency. While we
are not changing our record retention
policy to account for different State
pharmacy laws, we are revising the
proposed 10-year record retention
policy and establishing an ordering and
referring record retention period as 7
years from the date of service
Comment: One commenter believes
that pharmacies should be allowed to
maintain their hard-copy records offsite
electronically after a certain time.
Response: The provisions of the final
rule do not preclude offsite or electronic
storage as long as these records are
readily accessible and retrievable.
Comment: Several commenters
recommended that pharmacies should
maintain the prescription record in
written form for the greater of 3 years or
the requirements in State law, and then
allow the prescription to be stored
electronically for the remaining years.
The commenter continued to state that
this would bring consistency to the
Medicare Parts B and D programs, and
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reduce the need to create new storage
capacity for paper prescription records.
Response: Since Medicare is a Federal
program that already requires a 7-year
retention period from the date of billing,
we disagree that this change will create
a significant burden.
Comment: One commenter stated that
the extension from 7 to 10 years would
add a substantial recordkeeping burden.
Response: We agree with this
commenter and have revised this final
rule with comment period to establish
an ordering and referring record
retention period as 7 years from the date
of service.
Comment: One commenter urged
CMS to reconsider our position
regarding maintaining ordering and
referring documentation. In addition,
this commenter stated that this change
would constitute an unfunded mandate.
Response: We disagree with this
commenter that this change is an
unfunded mandate because providers
and suppliers are already required by
CMS’ manual instructions to maintain
ordering and referring documentation
for 7 years from the date of billing.
Comment: One commenter stated that
we should allow offsite and electronic
storage of ordering and referring
records.
Response: The provisions of the final
rule do not preclude offsite or electronic
storage as long as these records are
readily accessible.
Comment: One commenter urged
CMS to adopt the proposed requirement
for record retention, but only with a
provision that such record retention
requirements became effective as of the
effective date of the final rule. Further,
the commenter states that those
providers and suppliers that, until now,
have not kept ordering and referring
documentation for 10 years from the
date of service (and were under no other
statutory or regulatory requirement to
do so) would not be liable and face
possible revocation of billing privileges
as long as the provider or supplier was
in compliance with currently existing
requirements.
Response: We agree with this
commenter; however, we have revised
this final rule to establish the ordering
and referring record retention period as
7 years from the date of service.
After reviewing public comments, we
are finalizing the provision at proposed
§ 424.516(f) that would require
providers and suppliers 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 7 years from the date
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of service. In addition, we are finalizing
the provision found at § 424.535(a)(10)
that states that failure to comply with
the documentation requirements
specified in § 424.516(f) is a reason for
revocation.
Finally, the aforementioned
provisions regarding ordering and
referring documentation are effective
with services furnished on or after the
implementation date of this final rule.
6. Revocation of Enrollment and Billing
Privileges in the Medicare Program
(§ 424.535(h))
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 the Medicare program,
we proposed to limit the claims
submission timeframe after revocation.
In § 424.535(g) (Redesignated as
§ 424.535(h), we proposed 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 stated
that this change is necessary to limit the
Medicare program’s 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, we stated
that the 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 also
stated 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
submits claims on a nexus to the date
of service, we stated that the proposed
change will not impose a significant
burden on physician organizations or
individual practitioners. In addition, we
also proposed to add § 424.44(a)(3) to
account for this provision related to the
requirements for the timely filing of
claims.
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Comment: One commenter supports
our proposal to limit, to 30 days, the
time frame in which a provider whose
billing services have been revoked may
continue to submit claims for services
furnished prior to such revocation.
Response: We appreciate this
comment.
Comment: One commenter
appreciated our concern regarding the
current period of up to 27 months but
offered alternative time periods of 60 or
90 days rather than the proposed time
period of 30 days.
Response: We are finalizing the
provisions at § 424.535(h) (proposed as
§ 424.535(g)) that require a revoked
physician, NPP or a physician or NPP
organization to submit all outstanding
claims not previously submitted within
60 calendar days of the effective date of
the revocation, (except for revocations
identified in § 405.874(b)(2) and
§ 424.535(f) of this final rule).
Comment: Several commenters
encouraged CMS to reset the period of
time a provider can submit claims after
billing privileges have been revoked
from up to 27 months to 6 months,
instead of the proposed 30 days.
Response: As stated above, we are
finalizing the provisions found at
§ 424.535(g) (Redesignated as
§ 424.535(h)) that require a revoked
physician, NPP or a physician or NPP
organization to submit all outstanding
claims not previously submitted within
60 calendar days of the effective date of
the revocation, (except for revocations
identified in § 405.874(b)(2) and
§ 424.535(f) (redesignated as
§ 424.535(g)) of this final rule).
Comment: One commenter stated that
30 days is simply not enough time to
wrap up all of the details of a practice,
in addition to the other circumstances
associated with a revocation of billing
privileges.
Response: We are finalizing the
provisions found at § 424.535(h)
(proposed as § 424.535(g)) that require a
revoked physician, NPP or a physician
or NPP organization to submit all
outstanding claims not previously
submitted within 60 calendar days of
the effective date of the revocation,
(except for revocations identified in
§ 405.874(b)(2) and § 424.535(f)
(redesignated as § 424.535(g)) of this
final rule).
After reviewing public comments, we
are finalizing the provisions found at
§ 424.535(h) (proposed as § 424.535(g))
that require a revoked physician, NPP or
a physician or NPP organization to
submit all outstanding claims not
previously submitted within 60
calendar days of the effective date of the
revocation. Since the physician, NPP or
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a physician or NPP organization is
already afforded approximately 30 days
notification before the effective date of
revocation (except for revocations
identified in § 405.874(b)(2) and
§ 424.535(f) (redesignated as
§ 424.535(g)) of this final rule), we
believe that almost 90 days is more than
sufficient time to file any outstanding
claims with the Medicare program.
In addition, we are amending
§ 424.44(a) to account for this provision
related to the requirements for the
timely filing of claims. We are revising
the § 424.44(a) to clarify that this
provision is consistent with § 424.521
which limits the ability of physicians,
NPPs and physician and NPP
organizations to bill retrospectively. The
timely filing requirements in
§ 424.44(a)(1) and (a)(2) will no longer
apply to physician, NPPs, or physician
or NPP organizations or IDTFs.
7. Technical Changes to Regulations
Text
We proposed to make the following
technical changes:
• Existing § 424.510(d)(8) would be
redesignated as § 424.517. This 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
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 proposed to
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, we proposed to add
the phrase ‘‘in the Medicare program’’ to
the section heading to remain consistent
with other headings in the subpart.
After reviewing public comments, we
are finalizing the following technical
changes:
• Existing § 424.510(d)(8) has been
redesignated as § 424.517. This revision
would separate our ability to conduct
onsite reviews from the provider and
supplier enrollment requirements.
• Existing § 424.520 has been revised
and redesignated as § 424.516. This
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 are adopting
the effective dates for Medicare billing
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privileges for the following entities:
Surveyed, certified, or accredited
providers and suppliers; IDTFs; and
DMEPOS suppliers.
• In § 424.530, we are adding the
phrase ‘‘in the Medicare program’’ to the
section heading to remain consistent
with other headings in the subpart.
K. Amendment to the Exemption for
Computer-Generated Facsimile (Fax)
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
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 final rule with comment period 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
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February 4, 2005 Federal Register (70
FR 6256)
2. Regulatory History
a. Foundation Standards and Exemption
for Computer-Generated Facsimiles
(Facsimiles)
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
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 (facsimiles
generated by one computer and
electronically transmitted to another
computer or facsimile 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.
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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 facsimile
exemption to the NCPDP SCRIPT
standard for the communication of
prescription or certain prescriptionrelated information between prescribers
and dispensers for the transactions
specified in § 423.160(b)(1)(i) through
(xii).
Since computer-generated facsimiles
retain 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
NCPDP SCRIPT. We believed the
elimination of the computer-generated
facsimile exemption would encourage
prescribers and dispensers using this
computer-generated facsimile
technology to, where available, utilize
true e-prescribing (electronic data
interchange using the NCPDP SCRIPT
standard) capabilities.
We proposed to eliminate the
computer-generated facsimile
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 e-prescribing
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-facsimile
transactions.
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 facsimiles, indicating that
eliminating the exemption for
computer-generated facsimiles would
act as an incentive to move prescribers
and dispensers toward true eprescribing (electronic data interchange
using the NCPDP SCRIPT standard),
although many commenters suggested
that we continue to allow for the use of
computer-generated facsimiles in the
case of transmission failure and network
outages. Less than half of the
commenters disagreed with our
proposal to eliminate the exemptions for
computer-generated facsimiles, citing
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concerns about increased hardware/
software costs, transaction fees,
certification, and other activation costs.
Several commenters 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 data on the impact
of the elimination of the computergenerated facsimile exemption on
prescription refill requests, and not
considering the industry’s 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/transient
network transmission failures, effective
January 1, 2009.
3. Proposal for CY 2009
Following the publication of the CY
2008 PFS final rule with comment
period, we received additional
information regarding how the
modification of the exemption for
computer-generated faxing to eliminate
use of computer-generated faxing in all
instances other than temporary/
transient network transmission failures
would adversely impact the electronic
transmission of prescription refill
requests. The submitted information
offered additional support to the claim
that in all instances other than
temporary/transient network
transmission problems, elimination of
the use of computer-generated
facsimiles would adversely impact the
electronic transmission of prescription
refill requests. These later materials
substantiated the earlier claims that the
elimination of the exemption in all
instances other than temporary/
transient network transmission failures
would force dispensers who e-prescribe
and use these transactions to revert to
paper prescribing. These materials
offered more specific information
regarding the economic and workflow
impacts associated with the elimination
of the exemption for computergenerated facsimiles in all instances
other than temporary/transient network
transmission failures that was not
forthcoming in the prior public
comment period for the CY 2008 PFS
proposed rule. We also received
unsolicited comments on this issue
during the comment period for the
November 16, 2007 Part D e-prescribing
proposed rule (proposing the adoption
of certain final Part D e-prescribing
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standards and the use of NPI in Part D
e-prescribing transactions) (72 FR
64900). As a result of the new
information, we reexamined this issue
and proposed additional modifications
to the computer-generated facsimile
exemption in the CY 2009 PFS proposed
rule (73 FR 38502).
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
facsimile) nearly all prescription refill
requests from chain pharmacies to
prescribers are sent electronically, either
via an e-prescribing application or via
computer-generated 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
prescriptions 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 would this be
counterproductive to the advances and
efficiencies made in pharmacy practice,
it would impose an undue
administrative burden on dispensing
pharmacies and pharmacists.
As a result of this additional
information regarding the larger than
anticipated impact of the elimination of
computer-generated facsimiles for the
prescription refill request transaction,
we proposed to further amend the
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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 proposed to retain the
computer-generated facsimile
exemption in instances of transient/
temporary network transmission
failures, effective January 1, 2009. We
also proposed to revisit the computergenerated facsimile exemption for the
purpose of ultimately eliminating it for
the prescription refill request
transaction found at § 423.160(b)(1)(vii),
and specifically solicited industry and
interested stakeholder comments
regarding what would constitute an
adequate time to allow the industry to
transition to the use of the NCPDP
SCRIPT standard.
We also solicited industry input on
any other e-prescribing transaction that
might be similarly adversely impacted
by the elimination of computergenerated facsimiles in all instances
other than transient/temporary network
transmission failures.
We received 52 relevant and timely
public comments on our proposal to
further amend the exemption of
computer-generated facsimiles from the
NCPDP SCRIPT standard for Part D eprescribing to include an exemption for
refill request transactions with
prescribers who are not capable of eprescribing using the adopted NCPDP
SCRIPT standard as detailed in the CY
2009 PFS proposed rule (73 FR 38600).
While the comments were few in
number, they tended to provide
multiple detailed comments on what
had been proposed.
Comment: Several commenters
recommended that we reinstate the
exemption for computer-generated
facsimiles in its entirety. The
commenters referenced the Medicare
Improvements for Patients and
Providers Act of 2008 (MIPPA) and its
potential to help drive e-prescribing
adoption, stating that the e-prescribing
incentives contained in the MIPPA
provide a better, more transitional path
towards that goal.
One commenter recommended that
the elimination of the computergenerated facsimile exemption coincide
with the incentive provisions contained
in the MIPPA legislation. The
commenter noted the eventual penalty
for Medicare providers who do not
adopt e-prescribing by the year 2012.
The commenter also stated that
structuring the elimination of the
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computer-generated facsimile
exemption to coincide with this date
would allow organizations the time
needed to appropriately implement eprescribing.
Other commenters recommended that
we adopt a computer-generated
facsimile exemption for pharmacies in
areas where prescribers who do not eprescribe fall under the ‘‘significant
hardship’’ exception contained in the
MIPPA. Commenters also recommended
that the computer-generated facsimile
exemption be further modified so as to
allow for use of the computer-generated
facsimile exemption that was adopted in
the November 7, 2005 final rule (the
‘‘original’’ computer-generated facsimile
exemption) until 2014, when provider
disincentives/penalties are maximized
under the MIPPA, at which time a study
could be conducted to determine the
number of prescriptions being eprescribed. We assume that the
commenters’ intent would be to use the
information gleaned from such a study
as an indicator of whether or not eprescribing had reached an acceptable
level of adoption among providers and
pharmacies, and that if an acceptable
level of adoption among providers and
pharmacies had been demonstrated, that
the computer-generated facsimile
exemption could be eliminated.
Similarly, other commenters
suggested that the exemption should be
eliminated in 2012 when disincentives
under the MIPAA e-prescribing
incentive program go into effect, or in
2014, when e-prescribing provider
disincentives/penalties are maximized
under the MIPPA. Another commenter
urged that we reinstate the original
(from the November 7, 2005 final rule
(70 FR 67568)) exemption for computergenerated facsimiles in its entirety, not
just for prescription refill requests and
transmission failures.
Response: We agree with the
commenters regarding the impact of the
MIPPA. In general, the MIPPA provides
payment incentives for eligible
professionals who are ‘‘successful
electronic prescribers’’ as that term is
defined in the law. The incentive
payments are 2 percent of the eligible
professional’s allowed charges under
the PFS for CY 2009 through CY 2010;
1.5 percent in CY 2011 through CY
2012, and a 0.5 percent in CY 2013.
Conversely, the MIPPA calls for
payment reductions, or disincentives,
for those who are not successful
electronic prescribers beginning in CY
2012. For CY 2012, the payment amount
under the PFS will be reduced by 1
percent for eligible professionals who
are not successful electronic prescribers.
In subsequent years, the payment
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69785
reduction is increased by 0.5 percent
each year through CY 2014, and then is
fixed at 2 percent for later years. For
more information on the e-prescribing
provisions of the MIPPA, please see
section 132 of the MIPPA legislation
enacted on July 15, 2008 (Pub. L. 110–
275, https://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=110_cong_
public_laws&docid=f:publ275.110.pdf).
We envision that the MIPPA-created
incentive payments for those prescribers
who successfully implement electronic
prescribing in accordance with MIPPA
guidelines will provide the ‘‘tipping
point’’—an adequate level of industry
adoption of e-prescribing using
electronic data interchange (EDI) that
would in turn move the entire industry
toward widespread e-prescribing
adoption. We believe that data from the
e-prescribing incentive program under
the MIPPA and eventually from Part D
e-prescribing will offer evidence of the
rate of e-prescribing adoption, therefore
making a study of e-prescribing for
purposes of determining e-prescribing
adoption rates unnecessary.
We analyzed the industry feedback
that we received in response to the
computer-generated facsimile
exemption proposals in the CY 2009
PFS proposed rule in light of the recent
MIPPA legislation. While the MIPPA
legislation was not yet been enacted at
the time of the CY 2009 PFS proposed
rule’s publication, it was enacted in
time for commenters to discuss its
provisions in their comments to our
proposals. Based on MIPPA-based and
other comments received in response to
our proposal to further modify the
computer-generated facsimile
exemption, and taking into
consideration the potential positive
impact on the industry of the Part D eprescribing incentives included in the
recently-enacted MIPPA legislation, we
are reinstating the original exemption
for computer-generated facsimiles
effective January 1, 2009. We also agree
with those commenters who suggested
that the computer-generated facsimile
exemption should be eliminated (in all
instances other than transient/
temporary network transmission
failures) once provider e-prescribing
disincentives under the MIPAA program
are initiated.
Although several commenters
suggested that we should wait until the
disincentives are maximized in 2014,
we feel that it is more appropriate to
eliminate the reinstated exemption (in
all instances other than temporary/
transient network transmission
problems) sooner, when the MIPPA eprescribing program disincentives for
those who are not successful electronic
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prescribers begin in 2012. We believe
that the January 1, 2012 compliance
date for the elimination of the
computer-generated facsimile
exemption (in all instances other than
temporary/transient transmission
problems) will take advantage of the
momentum that will be built by the eprescribing incentive program under the
MIPPA, and affords the industry an
additional 3 years from the effective
date of this final rule with comment
period to move toward true eprescribing. We also believe that the
January 1, 2012 date will enable the
industry to begin taking advantage of
the benefits of e-prescribing sooner, and
in so doing pass those advantages on to
their patients in the way of increased
patient safety and convenience.
Therefore effective January 1, 2012, we
will eliminate the reinstated 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 in all instances
other than transient/temporary network
transmission failures.
We do not believe that a computergenerated facsimile exemption is
needed for pharmacies in areas where
prescribers who do not have access to
the technology that would allow them to
e-prescribe under the ‘‘significant
hardship’’ exception contained in the
MIPPA. We would expect that by the
year 2012, the effective date of the
elimination of the computer-generated
facsimile exemption (in all instances
other than temporary and transient
network transmission failures), that
most areas would have the
telecommunication and/or Internet
connectivity capacity to allow providers
to conduct e-prescribing, and an
exemption is not warranted in the rare
instance where this may not be the case.
Comment: We received feedback from
19 commenters who agreed with the
proposal to extend the exemption to
computer-generated facsimiles for the
prescription refill request transaction in
cases where the physician is not NCPDP
SCRIPT enabled.
Response: We agree with commenters.
This issue will be resolved with this
final rule’s reversal of the CY 2008 PFS
final rule’s e-prescribing provisions that
would have eliminated the computergenerated faxing exemption (in all
instances other than temporary and
transient network transmission failures)
effective on January 1, 2009, and
concurrent reinstatement of the original
exemption for computer-generated
facsimiles from the November 7, 2005
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final rule effective January 1, 2009.
However, we will eliminate the
reinstated exemption for computergenerated facsimiles (in all instances
other than transient/temporary network
transmission failures) effective when the
MIPPA e-prescribing program
disincentives take effect on January 1,
2012.
Comment: Some commenters
expressed opposition to the proposed
elimination of the exemption for
computer-generated facsimiles in all
instances other than temporary/
transient network transmission failures.
One commenter erroneously identified
January 1, 2010 as the proposed
compliance date, but still asked for
additional time for NCPDP SCRIPTnoncompliant providers to become
compliant with the NCPDP SCRIPT
standard.
Another commenter stated that the
overall e-prescribing adoption rate has
not met a critical mass to justify a
January 2009 deadline for the
elimination of the computer-generated
facsimile exemption in all instances
other than transient/temporary network
transmission failures. The commenter
noted that with the effective date fast
approaching, unless the computergenerated facsimile exemption is
modified once again, many
organizations will have to hastily
implement e-prescribing solutions or
revert back to paper prescribing.
Response: We agree with commenters
that it is in the best interests of the
industry and consumers that the CY
2008 PFS final rule’s modifications to
the computer-generated facsimile
exemption be reversed and the broad
exemption originally created in the
November 7, 2005 final rule for
computer-generated facsimiles in Part D
e-prescribing be reinstated to prevent a
reversion by providers to paper
prescriptions, and a reversion by
pharmacies to traditional paper faxing.
Therefore, by this rule we have
reinstated the original exemption for
computer-generated facsimiles effective
January 1, 2009. However, we will
eliminate the reinstated computergenerated facsimiles exemption in all
instances other than transient/
temporary network transmission failures
effective when the MIPPA e-prescribing
program disincentives take effect on
January 1, 2012.
Comment: Some commenters
requested clarification of our proposed
amendment to the exemption for
computer-generated facsimiles. One
commenter stated that their customers
believe that all Part D prescriptions,
without exception, must be sent via
electronic transmission as of January 1,
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2009, and otherwise they may be liable
for conducting an ‘‘illegal’’ transaction.
To avoid undue hardship, costs, and
confusion, the commenter asked that
CMS clearly specify that e-prescribing is
preferred but still voluntary for
providers and dispensers; and those
prescribers not currently e-prescribing
under the Medicare Part D pharmacy
benefit program may still write paper
prescriptions, or call in or fax their
prescriptions using a traditional paper
fax machine to a pharmacy.
Another commenter asked CMS to
clarify that providers who use
prescription writing systems that enable
computer based facsimiles but do not
enable NCPDP SCRIPT transactions are
not subject to the provisions of the
computer-generated facsimile
exemption. One commenter asked CMS
to clarify the definition of a ‘‘true’’ eprescribing system.
Response: We recognize that there
might be some confusion for prescribers
and dispensers with the elimination of
certain portions of the computergenerated facsimile exemption. In the
November 7, 2005 e-prescribing final
rule (70 FR 67568), we defined ‘‘eprescribing’’ to mean the transmission,
using electronic media, of prescription
or prescription-related information,
between a prescriber, dispenser, PBM,
or health plan, either directly or through
an intermediary, including an eprescribing network.
As we noted above, section 101 of the
MMA amended title XVIII of the Act to
establish the Part D prescription drug
benefit program. As part of that
program, the Congress required the
establishment of a ‘‘voluntary’’ eprescribing program. It is voluntary in
that providers and dispensers are not
required to conduct e-prescribing for
Medicare covered drugs prescribed for
Medicare Part D eligible beneficiaries,
but if they do conduct such eprescribing, they must do so using the
applicable standards that are in effect at
the time of the transmission. Part D
sponsors, in turn, must support eprescribing so that providers and
dispensers who wish to conduct eprescribing transactions with plans will
be able to do so using the adopted
standards that are in effect at the time
of the transaction. We refer those
commenters with questions regarding
the creation and scope of the Medicare
Part D e-prescribing program 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)
In the CY 2008 PFS proposed rule (72
FR 38194), we proposed to revise
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§ 423.160(a)(3)(i) to eliminate the
computer-generated facsimile
exemption to the NCPDP SCRIPT
standard for the communication of
prescription or certain prescriptionrelated information between prescribers
and dispensers for the transactions
specified in § 423.160(b)(1)(i) through
(xii). In keeping with the comments that
we received, we finalized modifications
that required prescribers and dispensers
to use NCPDP SCRIPT compliant eprescribing software when they conduct
e-prescribing transactions for Part D
covered drugs that are prescribed for
Part D eligible individuals in all
instances other than transient/
temporary network transmission
failures, effective January 1, 2009. Those
prescribers who choose not to eprescribe Part D covered drugs for Part
D eligible individuals can continue to
use non-computer-generated facsimiles
as a means to deliver such prescriptions
to a dispenser.
Providers who use electronic
prescription writing systems that are
only capable of producing computergenerated facsimiles are not in
conformance with the adopted
standards because they do not transmit
information using the adopted NCPDP
SCRIPT standard. Those who utilize
their NCPDP SCRIPT enabled systems to
produce computer-generated facsimiles
are likewise not in compliance with the
adopted standards because computergenerated facsimiles on these systems
also do not use the adopted standard.
We believed that eliminating the
exemption (in all instances other than
transient/temporary network
transmission failures) might encourage
those with NCPDP SCRIPT capabilities
that have not been activated to use the
NCPDP SCRIPT standard in electronic
data interchanges, and those without
such capabilities to upgrade their
current software products, or, where
upgrades are not available, to switch to
new products that would enable such
true e-prescribing.
We believe that eliminating the
computer-generated facsimile
exemption in 2012 would provide
sufficient notice to prescribers and
dispensers who would need to
implement or upgrade e-prescribing
software to look for products and
upgrades that are capable of generating
and receiving transactions that utilize
NCPDP SCRIPT. Eliminating the
reinstated computer-generated facsimile
exemption in 2012 would also afford
current e-prescribers time to work with
their trading partners to eventually
eliminate the use (in all instances other
than transient/temporary network
transmission failures) of computer-
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generated facsimiles in e-prescribing
transactions.
From our analysis of the public
comments that asked that the
elimination of the computer-generated
facsimile exemption (in all instances
other than temporary/transient network
transmission failures) be reversed, and
in view of the recent MIPPA legislation
that provides a more powerful incentive
to providers to e-prescribe in
accordance with the standards adopted
under Medicare Part D, we are reversing
the modifications to the computergenerated facsimile exemption that were
made in the CY 2008 PFS final rule with
comment period and reinstating the
original computer-generated facsimile
exemption that was adopted in the
November 7, 2005 e-prescribing final
rule in its entirety, effective January 1,
2009. However, we will eliminate the
reinstated exemption for computergenerated facsimiles in all instances
other than transient/temporary network
transmission failures when the MIPPA
e-prescribing program disincentives take
effect on January 1, 2012.
Comment: Several commenters who
agreed with our proposal to eliminate
the computer-generated facsimile
exemption (in all instances other than
transient/temporary network
transmission failures) suggested that we
delay the January 1, 2009 effective date
stated in the CY 2008 PFS final rule
with comment period. One commenter
urged CMS to conduct studies on the
barriers to use of NCPDP SCRIPT
compliant systems, and then work with
stakeholders to identify pathways
toward more widespread use of
e-prescribing systems. Another
commenter noted that the recent merger
of the two major
e-prescribing information exchange
networks still may hold unforeseen
consequences for those vendors who
have been previously certified or are in
the process of being certified by either
of those two networks. The commenter
stated that any software changes that the
network may demand as a result of their
merger may take time to develop, and as
a result, the effective date should be
delayed.
A few commenters said that we
should tie the computer-generated
facsimile exemption compliance to the
April 1, 2009 compliance date of the
most recent round of final e-prescribing
standards. One commenter suggested
that we delay the effective date of the
CY 2008 PFS final rule with comment
period modifications to the computergenerated facsimile exemption to 2012,
when wireless broadband upload
connectivity is expected to achieve a
speed of faster than 1MB/second.
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Response: We do not see a correlation
between the e-prescribing network
certification process, and the
commenter’s request to delay the
elimination of the computer-generated
facsimile exemption based on what may
or may not take place in that process.
Additionally, the process for vendors to
certify their products to an e-prescribing
information exchange network is a
marketplace issue to which we are not
a party.
We understand that some prescribers
and dispensers may not have been
prepared to e-prescribe using the
adopted standards by the January 1,
2009 effective date of the CY 2008 PFS
final rule’s e-prescribing provisions.
However, with this final rule’s reversal
of those modifications and
reinstatement of the original computergenerated facsimile exemption that was
adopted in the November 7, 2005 eprescribing final rule in its entirety,
effective January 1, 2009, we believe we
have addressed commenters’ concerns
regarding effective dates. However, we
will eliminate the reinstated exemption
for computer-generated facsimiles in all
instances other than transient/
temporary network transmission failures
when the MIPPA e-prescribing program
disincentives take effect on January 1,
2012.
Comment: A comment concerning the
computer-generated facsimile
exemption issue relative to non-NCPCP
SCRIPT enabled pharmacies (including
many independent pharmacies) stated
that there are still significant segments
of the retail pharmacy market not yet in
a position to receive electronic
prescriptions because they are only
facsimile-enabled. The commenter cited
national prescription information
exchange network data showing that
only about 42,000 of the nation’s
pharmacies are NCPDP SCRIPT
e-prescribing enabled, and about 20,000
of the nation’s pharmacies are only
manual (traditional paper-based)
facsimile or computer-generated
facsimile-enabled.
One commenter stated that
e-prescribing technology has not yet
been perfected by its developers, and
that the receiving parties (that is,
pharmacies) have not fully integrated
this technology into their workflows.
The commenter also indicated that use
of e-prescribing technology is
dependent on the availability of
telecommunications services and
Internet connectivity, and this is
problematic especially in rural areas
where there may be a lack of such
telecommunications and/or Internet
connectivity services needed to support
e-prescribing systems.
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A vendor expressed concern that their
client pharmacies that rely solely on
computer-generated facsimiles may not
be able to send or receive computergenerated facsimile transmissions
through national prescription
information exchange networks after
January 1, 2009.
Response: We recognize that
pharmacies that are not now conducting
e-prescribing transactions using the
NCPDP SCRIPT standard will incur
costs to implement this capability, and
that pharmacies will likely experience
an increase in e-prescribing transaction
volumes and costs as utilization of such
transactions increases.
We agree that independent
pharmacies and pharmacies that employ
only computer-generated facsimile
capabilities need to be given the
opportunity to upgrade their systems
and that elimination of the computergenerated facsimile exemption (in all
instances other than transient/
temporary network transmission
failures) would place them at a
disadvantage at a time when the MIPPA
incentive program is expected to
generate increased e-prescribing
volumes. Therefore, for this reason and
the other reasons stated herein, we are
reversing the modifications to the
computer-generated facsimile
exemption that were made in the CY
2008 PFS final rule with comment
period and reinstating the original
computer-generated facsimile
exemption that was adopted in the
November 7, 2005 e-prescribing final
rule in its entirety, effective January 1,
2009. However, we will eliminate the
exemption for computer-generated
facsimiles in all instances other than
transient/temporary network
transmission failures when the MIPPA
e-prescribing program disincentives take
effect on January 1, 2012.
Comment: We received comments
requesting confirmation that the
proposed revisions to the computergenerated facsimile exemption would
not now apply to long term care
providers. Another asked that CMS
allow long term care facilities to
continue to transmit prescriptions via
computer-generated facsimile to
pharmacies that are not yet using
systems capable of receiving NCPDP
SCRIPT transactions appropriate to this
setting (NCPDP SCRIPT Version 10.2 or
higher). A professional association
noted that eliminating the exemption for
computer-generated facsimiles (in all
instances other than transient/
temporary network transmission
failures) is unlikely to spur adoption
among long term care providers and
could, if left standing, force some
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facilities to resort to manual facsimiles.
The commenter also urged CMS to
eliminate the e-prescribing exemption
for long term care facilities.
Response: In § 423.160(a)(3)(iii), long
term care facilities were specifically
exempted from the requirement to use
the adopted standards in e-prescribing
under Medicare Part D due to their
unique workflows and complexities
associated with prescribing for patients
in long term care settings. This
exemption remains in effect for long
term care facilities. Therefore, long term
care facilities may continue to use
computer-generated facsimiles, and
such facilities will continue to be
exempt from the requirement to use the
NCPDP SCRIPT Standard in
prescription transactions between
prescribers and dispensers where a nonprescribing provider is required by law
to be a part of the overall transaction
process.
Comment: Comments regarding other
issues relevant to e-prescribing in
general, and the elimination of the
computer-generated facsimile
exemption (in all instances other than
transient/temporary network
transmission failures) specifically
included comments requesting
amendments to the computer-generated
facsimile exemption that would address
when a prescriber or dispenser is
prohibited from using the NCPDP
SCRIPT standard for e-prescribing. The
commenter noted that the Drug
Enforcement Administration’s (DEA)
prohibition of e-prescribing of
controlled substances would prevent a
provider from prescribing such
controlled substances under the Part D
program in accordance with the adopted
standards. One commenter stated that
vendors would have to disable
electronic communication of
prescriptions from their client
prescribers through the prescription
information exchange network to those
pharmacies that are only computergenerated facsimile-enabled. The vendor
assumed that if their client prescriber
attempts to send those prescriptions
electronically that the prescription will
be rejected by the prescription
information exchange network because
the pharmacy is not activated with the
network for electronic transactions
using the NCPDP SCRIPT standard. This
same commenter noted that the network
has heretofore insulated the prescriber
from having to be concerned with
whether or not the patient’s choice of
pharmacy was enabled to receive
prescriptions in a particular way. After
the proposed January 2009 compliance
date, the commenter felt that additional
burdens would be placed on the
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prescriber to obtain this information
from the patient up front, or could
compel patients to make different
pharmacy choices which could result in
lost business for pharmacies that are
only facsimile-enabled.
Response: The DEA has authority
through the Controlled Substances Act
over the electronic prescribing of
controlled substances, and does not
currently allow for the electronic
prescribing of Schedule II drugs. As
such substances currently may not be
prescribed electronically, there is no
conflict of law at this time. As noted
previously, e-prescribing under
Medicare Part D is voluntary for
prescribers and dispensers—they are not
required to issue prescriptions in
electronic form. Although the DEA has
published a notice of proposed
rulemaking to allow for the electronic
prescribing of controlled substances, we
have no indication as to when the DEA
will make a final determination on this
issue. We continue to work with the
DEA to help facilitate a solution that
addresses both their enforcement
requirements with respect to the
electronic prescribing of controlled
substances, and the needs of the
healthcare community for a solution
that is interoperable with existing eprescribing systems, scalable and
commercially viable.
After reviewing these comments, in
the interest of patient care and safety,
and to foster the adoption of true eprescribing among prescribers and
dispensers, we are reversing the
modifications to the computer-generated
facsimile exemption that were made in
the CY 2008 PFS final rule with
comment period and reinstating the
original computer-generated facsimile
exemption that was adopted in the
November 7, 2005 e-prescribing final
rule, effective January 1, 2009. However,
we will also eliminate the reinstated
exemption for computer-generated
facsimiles in all instances other than
transient/temporary network
transmission failures when the MIPPA
e-prescribing program disincentives take
effect on January 1, 2012.
L. Comprehensive Outpatient
Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
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.
In the CY 2008 PFS final rule with
comment period (72 FR 66399), we
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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
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 the CY 2009 PFS proposed rule, we
addressed the comments received in
response to the CY 2008 PFS final rule
with comment period (72 FR 66222),
proposed new provisions, and proposed
revising other provisions. We solicited
comments on all of the 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. Specifically, the American
Association for Respiratory Care (AARC)
stated 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.
We proposed to revise § 485.70(j) of
the Conditions of Participation of CORF
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services—setting forth the personnel
qualifications for respiratory therapists
in CORFs—to be consistent with current
qualification requirements for RRTs, as
recommended by AARC. We also
proposed 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 stated that we believed 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 proposed to amend the
material addressing personnel
qualifications in § 485.70. Specifically,
we proposed to amend 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 provision of physical
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therapy, speech-language pathology,
and occupational therapy services.
Also, at 485.58(a)(1)(i), we proposed
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.
The following is a summary of the
comments received concerning
Personnel Qualifications and our
responses.
Comment: Commenters generally
supported our proposed changes. We
received a comment that supported the
spirit of our proposed changes to the
definitions of respiratory therapists and
provided further clarification regarding
current professional standards.
Specifically, in previous comments, the
commenter noted that the term
‘‘respiratory therapy technician’’ is an
obsolete term. This is because today’s
curriculum and educational standards
are no longer structured to teach at a
technician level.
The commenter noted that, in our
discussion of the issue in the proposed
rule, we stated that it was AARC’s belief
that the term ‘‘certified respiratory
therapist’’ (CRT) had replaced the
obsolete term ‘‘respiratory therapy
technician’’ and the term ‘‘registered
respiratory therapist’’ (RRT) has
replaced the term ‘‘respiratory
therapist.’’ The commenter informed us
that our statement was incorrect.
According to the commenter, today’s
educational programs prepare students
for the registry (RRT) examinations
administered by the National Board for
Respiratory Care (NBRC). Before
graduates are eligible to sit for the RRT
examinations they must first pass the
NBRC’s entry-level examination, which
results in the CRT credential. Thus the
CRT-credentialed individual is
considered an ‘‘entry-level respiratory
therapist,’’ but unlike other allied health
professions, the terms ‘‘technician’’ or
‘‘assistant’’ are not used in the
respiratory therapy profession.
According to AARC, in the profession
today, it is accepted clinical and
medical terminology that individuals
holding the credentials of both CRT and
RRT are known simply as ‘‘respiratory
therapists.’’ Also, most State laws that
require licensing of respiratory
therapists make no distinction in the
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license as to whether the individual
holds a credential of CRT or RRT. They
are both licensed as ‘‘respiratory
therapists.’’ To the best of AARC’s
knowledge, there are only six States that
require a separate license for a CRT or
a RRT. AARC recommended that the
proposed definition be revised.
Since CMS uses the term ‘‘respiratory
therapist’’ in other regulatory provisions
and manual instructions where
applicable, AARC recommended that
CMS delete the word ‘‘registered’’ from
the proposed definition. This would
also be consistent with the terms
‘‘physical therapist’’ and ‘‘occupational
therapist’’ used to define qualified
personnel in those professions.
AARC also believes that CMS can
ensure that only registered respiratory
therapists, and not individuals holding
only the CRT, meet the personnel
qualifications by revising the
curriculum requirements to require that
respiratory therapists have passed the
registry examination administered by
the NBRC. AARC also noted that the
name of the Board administering the
certification and registry exams is the
NBRC, not the National Board for
Respiratory Therapy, Inc.
Response: We thank the commenters
for their support of our proposed
revisions. We believe that the comments
provided by AARC reflect and further
clarify our intent to provide appropriate
respiratory care to patients served by
CORFs. We want to ensure that only
respiratory therapists with the highest
level of education and training can
furnish respiratory therapy services in a
CORF. Therefore, only those individuals
holding the credential of registered
respiratory therapist (RRT) conferred by
the NBRC would qualify. Qualifying by
being ‘‘eligible to take the registry
examination,’’ as we proposed, results
in the unintended consequence of
permitting CRTs who have not yet taken
the registry exam to meet the personnel
qualifications.
As a result of the public comments,
we are finalizing the proposed revisions
that reference personnel qualifications
for HHAs at § 485.70(c) and (e). We are
also finalizing our proposed revision to
§ 485.58(a)(i)(1) that amends the duties
of CORF physicians to include medical
supervision of nonphysician staff (we
received no comments on this
provision). We are adopting the
revisions to the personnel qualifications
for respiratory therapists at § 485.70(j) as
suggested by AARC, to read as follows:
(j) A respiratory therapist must—
(1) Be licensed by the State in which
practicing, if applicable; and
(2) Have successfully completed a
nationally-accredited educational
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program that confers eligibility for the
National Board for Respiratory Care
(NBRC) registry exams, and have passed
the registry examination administered
by the NBRC, or
(3) Have equivalent training and
experience as determined by the
National Board for Respiratory Care
(NBRC) and passed the registry
examination administered by the NBRC.
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 codes 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 in the CY 2008 PFS final rule
with comment period, 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
was part of a series of codes that was
created by CPT in 2002 to address
health and behavior assessment issues.
These 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,
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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 § 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, we proposed to create a
CORF specific G-code, 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 proposed to use salary and
wage data from the Bureau of Labor
Statistics to institute a blended social
worker/psychologist clinical labor
category using a price per minute rate of
$0.45 for the PE component of GXXX5.
We proposed to 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 did not propose to
allocate a work RVU for these services.
We also proposed 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
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 stated
that we are concerned that the phrase
‘‘and treatment’’ currently included in
the definition of CORF social and
psychological services may be
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misconstrued to include social and
psychological services for the
independent clinical treatment of
mental illness. Therefore, we proposed
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.
In addition, we proposed to remove
§ 410.155(b)(1)(ii) regarding the
application of mental health limitations
to CORF social and psychological
services. As we previously stated, CORF
services, including social and
psychological services, must directly
relate to or further the rehabilitation
goals established in the physical
therapy, occupational therapy, speechlanguage 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
would not be ‘‘treatment of mental,
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 would not apply. We
proposed changes to § 410.155(b) to
reflect our view regarding the limited
nature of these services.
The following is a summary of the
comments received concerning our
proposal to create a HCPCS G-code to
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describe the unique CORF social and
psychological services and our
responses.
Comment: One commenter stated that
the G-code is more specific to
rehabilitation services and its
implementation will support future
adoption as a CPT code. Another
commenter stated that occupational
therapy services are a core CORF
service. The commenter requested that
CMS clarify that the new G-code would
not have a negative impact on the
provision of occupational therapy
services to meet patient needs that are
similar to those addressed by the
G-code. The commenter stated that
occupational therapy, as with all
therapy services, includes assessment of
the patient level of functioning as an
integral part of the therapy services.
Other commenters suggested that
therapists and psychologists assess and
treat mental, cognitive, and emotional
functioning as they relate to a patient’s
rehabilitation plan of care. The
commenters further suggested that CMS
revisit its decision not to allow CORF
therapists and psychologist to bill the
Health and Behavioral Assessment/
Intervention codes (CPT codes 96150
through 96155), which are used to
identify and treat ‘‘biopsycholosocial
factors important to physical health
problems.’’ One commenter also
requested that the new G-code include
physician work in the RVUs since all
other codes billed by psychologist
include physician work. Another
commenter stated that the statute clearly
defines social and psychological
services so there is no need for the
development of a G-code.
Response: Section 1861(cc)(2)(B) of
the Act defines the term CORF to mean
a facility which provides at least
physician services (as defined at
§ 410.100(a)), physical therapy services
and social or psychological services. As
such, occupational therapy services are
not considered one of the core CORF
services but are optional. The CORF
must provide the core CORF services. In
addition it may furnish any of the
optional covered and medically
necessary services and items such as
occupational therapy, speech-language
pathology, or respiratory therapy
services. These optional services must
directly relate to, and be consistent
with, the rehabilitation plan of
treatment, and must be necessary to
achieve the rehabilitation goals.
Occupational therapy services include
assessment of an individual’s level of
independent functioning, selection and
teaching of task-oriented therapeutic
activities to restore sensory-integrative
functions, teaching of compensatory
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techniques to permit an individual with
a physical or cognitive impairment or
limitation to engage in daily activities.
The patient’s plan of treatment will
document all the covered and medically
necessary items and services that the
patient requires which will include the
core CORF services as well as any of the
optional services such as occupational
therapy.
In the CY 2007 PFS final rule with
comment period, we revised
§ 410.100(h) states that CORF social and
psychological services include the
assessment and treatment of a CORF
patient’s mental health and emotional
functioning and the patient’s response
to/and rate of improvement and
progress towards the rehabilitation plan
of treatment. In our view, social and
psychological services must contribute
to the improvement of the individual’s
rehabilitation condition and may not
relate to a mental health diagnoses. In
the CY 2008 PFS final rule (72 FR
66298), we discussed the use of CPT
codes 96150 through 96155 for health
and behavior assessment and treatment,
which represent full-scale clinical
treatment of mental, psychoneurotic,
personality disorders and
biopsychosocial functioning. We revised
the previous definition of CORF social
and psychological services and
instructed that these services should be
limited to those described by CPT code
96152. We stated that provision of other
therapeutic services was outside of the
scope of coverage for CORFs. Since
these CPT codes were not a part of the
proposed regulation, we will not revisit
the use of these CPT codes in this final
regulation.
We are finalizing our proposal to
create the CORF specific G-code which
will be G0409. The description of this
G-code will be G0409, Social work and
psychological services. This code will
directly relate to and/or further 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. The code does not include any
physician work RVUs because the social
and psychological services are
performed by a CORF social worker
with a Bachelor of Science degree or a
Masters-level psychologist and not by a
physician as defined in the statute at
section 1861(r) of the Act.
We did not receive any comments on
our proposal to eliminate the mental
health limitation requirement. The
mental health limitation is no longer
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applicable because 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 and do not relate to a
general diagnosis of mental,
psychoneurotic, and personality
disorders which the mental health
limitation addresses. Therefore, we are
finalizing our proposed change to
remove § 410.155(b)(1)(ii) regarding the
application of mental health limitations
to CORD social and psychological
services.
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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.
In the CY 2009 PFS proposed rule, we
proposed 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 speech-language 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 proposed to
clarify that the alternate premises for
provision of physical therapy,
occupational therapy, and speechlanguage pathology services may be the
patient’s home.
The following is a summary of the
comments received concerning CORF
CoPs and our responses.
Comment: Commenters concurred
with the proposed clarification
regarding the patient’s home as an
alternate premise for provision of
physical therapy, occupational therapy,
and speech-language pathology services.
Response: We thank the commenters
for their support of this provision. As a
result of the public comments, we are
finalizing the revisions to § 485.58(e)(2)
as proposed.
4. Extension Location
We proposed 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
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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 proposed 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 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.
The following is a summary of the
comments received concerning an
extension location and our responses.
Comment: Some commenters
supported our proposed revisions and
suggested that we add additional
clarifying information. One commenter
suggested that we clarify the status of
space that a rehabilitation agency may
use within another facility (for example,
a room used by the agency within a
nursing facility). Another commenter
suggested that we specify a mile radius
from the rehabilitation agency’s primary
site within which an extension location
may exist.
Response: We thank the commenters
for their input. Regarding a mile radius,
mileage, and travel times from the
primary location to the extension
location are significant factors to
consider because they are implicitly
referenced in the proposed regulation.
However, each alone would not be the
single issue in determining
appropriateness as a sole means for
approving an extension location. We
have decided to leave it to the
rehabilitation agency to prove to the
State survey agency that the
rehabilitation agency is close enough to
the extension location to provide
supervision of staff during its hours of
operation. Supervision of the extension
location staff must be adequate to
support the care needs of the patients.
We believe that our proposed definition
for an extension location is adequate, as
it has been used successfully in our
State Operations Manual for other
provider types. We are not making any
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changes to our proposed revisions based
on public comments, and are finalizing
them as proposed.
5. Emergency Care
We proposed to revise § 485.711(c),
Standard: Emergency care, to reflect
current medical practice. We proposed
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 proposed that each
rehabilitation agency establish
procedures to be followed by personnel
in an emergency that cover immediate
care of the patient, persons to be
notified, and reports to be prepared.
The following is a summary of the
comments received concerning
Emergency care and our responses.
Comment: Most commenters
concurred with our proposed changes to
the emergency care standard.
Specifically, the commenters supported
our proposed elimination of the
requirement that rehabilitation agencies
retain a physician on call for
emergencies. The commenters cited
difficulty in recruiting physicians for
this role, and stated that it is often
impractical to contact a physician in the
rare case of an emergency. One
commenter also supported the revisions
to the emergency provisions because
they allow facilities to develop
emergency care plans most appropriate
for an individual facility’s location and
patient population.
Response: We thank the commenters
for their support, and agree that these
revisions will allow facilities to plan for,
and respond to, emergency care
situations in appropriate ways. As a
result of the public comments, we are
finalizing the provision as proposed
with slight non-policy revisions for
grammatical purposes. We are also
revising the stem statement to remove
the reference to the physician’s presence
in emergency situations.
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
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offered by CORFs, 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 proposed
to delete the requirement in paragraph
(2)(ii) of the rehabilitation agency
definition requiring a rehabilitation
agency provide social or vocational
services.
The following is a summary of the
comments received concerning the
technical change and our responses.
Comment: Most commenters
responded in support of this proposed
revision. Some commenters stated that
this requirement, which is an unfunded
mandate, is burdensome, and that
patients often resent being required to
release their personal information to a
social worker they will likely never
meet or work with. The commenters
also agreed that social and vocational
services are outside the scope of
practice for rehabilitation agencies.
Response: We thank the commenters
for their support of this change. As a
result of the public comments, we are
finalizing the provision as proposed.
We also proposed to make a
conforming change at § 485.717, the
Condition of participation:
Rehabilitation program. At
485.711(b)(3), we proposed to remove
the reference to § 410.61(e), since
§ 410.61(e) no longer exists in
regulation.
The following is a summary of the
comments received concerning this
technical change and our responses.
Comment: Some commenters
concurred with this conforming change
while others objected to this conforming
change because the commenters believe
that we did not also address the
statement in § 485.711(b)(3) that states
that the patient plan of care must be
reviewed by a physician, nurse
practitioner, clinical nurse specialist, or
physician assistant at least every 30
days. The commenters believe that this
conflicts with CMS payment policy,
which requires recertification of the
plan of care at least every 90 days. We
also received several unsolicited
comments requesting that we correct
this perceived discrepancy.
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Response: We did not propose to
revise the language to conform to
changes in the timing for recertification
of outpatient therapy plans of care as
discussed in the CY 2008 PFS final rule
with comment period (72 FR 66396).
Currently, § 485.711(b)(3) requires that
the plan of care and results of treatment
be 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, which for Medicare patients
being treated in rehabilitation agencies
must be at least every 30 days. We
believe that this requirement is in the
best interests of rehabilitation agency
patients, and note that by meeting this
condition of participation, facilities
would automatically meet the CMS
payment policy requiring review at least
every 90 days.
We are not making any changes to our
proposed revisions as a result of public
comments, and are finalizing the
conforming change as proposed.
M. Technical Corrections for TherapyRelated Issues
We proposed the following technical
changes to the regulations concerning
therapy services:
• In § 409.17(a), we proposed to
delete the reference to paragraph
(a)(1)(ii) which no longer exists.
• In § 409.23, we proposed to revise
the title of this section from ‘‘Physical,
occupational and speech therapy’’ to
‘‘Physical therapy, occupational therapy
and speech-language pathology
services.’’
Commenters voiced no objections to
these technical corrections, and we are
finalizing these technical corrections as
proposed.
Several commenters brought to our
attention changes made to the text of a
regulation in the CY 2008 PFS final rule
with comment period that did not
reflect our policy as expressed in the
preamble discussion. We intended to
modify our regulations to make the
policies for therapy services consistent
across all settings. We added
§ 485.635(e) for the purpose of
conforming the policies for physical
therapy, occupational therapy and
speech-language pathology in the
critical access hospitals (CAHs) to the
policies for therapy services in § 409.17.
Section 485.635(e) describes therapy
services when furnished at the CAH as
those that ‘‘are provided as direct
services by staff qualified under State
law, and consistent with the
requirements for therapy services
described in § 409.17.’’ The reference in
the regulation to ‘‘direct services’’ was
not intended to address the employment
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status of staff providing those services,
but we now recognize that it could be
interpreted as such. Therefore, we are
making a technical correction to the
regulatory language at § 485.635(e) to
remove the words ‘‘as direct services.’’
N. Physician Self-Referral and AntiMarkup Issues
1. Exception for Incentive Payment and
Shared Savings Programs (§ 411.357(x))
a. Introduction
In the CY 2009 PFS proposed rule (73
FR 38502), we proposed a new
exception to the physician self-referral
law for incentive payment and shared
savings programs. The proposed
exception covered various types of
hospital-sponsored pay-for-performance
(P4P), shared savings (for example,
gainsharing), and similarly-styled
programs that offer financial incentives
to physicians intended to foster high
quality, cost-effective care. The
exception, as proposed, would provide
more flexibility than existing physician
self-referral exceptions available for
such programs (73 FR 38548).
When establishing a new exception to
the physician self-referral law, we rely
on the authority granted to us in section
1877(b)(4) of the Act, which mandates
that financial relationships permitted
under an exception, such as the types of
compensation arrangements
contemplated by the proposed
exception, not pose a risk of program or
patient abuse. As described more fully
in the CY 2009 PFS proposed rule, in
order to ensure that we did not exceed
this authority, the proposed exception
was targeted and relatively narrow. We
acknowledged that it was unlikely to
cover as many arrangements as
interested stakeholders would like, and
sought comments on ways that we
might expand the proposed exception
without a risk of program or patient
abuse.
We received approximately 55 timely
public comment letters regarding the
proposed exception for incentive
payment and shared savings programs.
The majority of commenters supported
the establishment of the following: (1)
An exception for incentive payment and
shared savings programs; or (2) two
exceptions—one for incentive payment
programs and one for shared savings
programs. However, most of these
commenters urged us to finalize such an
exception or exceptions only if
substantial modifications were made to
the conditions proposed. We also
received a number of comment letters
urging us not to finalize an exception for
incentive payment and shared savings
programs, some of which asserted that
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we lack statutory authority to do so and
contended that any such exception
necessarily would pose a risk of
program or patient abuse.
As we stated in the CY 2009 PFS
proposed rule (73 FR 38548):
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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.
Our goal in establishing an exception
or exceptions for incentive payment and
shared savings programs is ‘‘to
promulgate an exception that is as broad
as possible’’ yet 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 (73 FR
38548). Although we received
thoughtful and instructive comments,
we did not receive through the initial
public comment process sufficient
information or agreement among
commenters regarding possible
modifications to the proposal to allow
us to finalize an exception that expands
the proposed exception in any
meaningful way. Therefore, we are
reopening the public comment period to
obtain the specific information
described below. We believe that, if
ultimately provided through the
extended public comment process, the
additional information we are
requesting will assist us in finalizing an
exception or exceptions for incentive
payment and shared savings programs.
The comment period will be reopened
for an additional 90 days following
publication of this final rule with
comment period in the Federal Register.
Information regarding the submission of
public comments can be found in the
ADDRESSES section of this final rule with
comment period. We will summarize
and respond to all comments received
in response to our proposal (or any
future proposal for an exception (or
exceptions) to the physician self-referral
law for incentive payment and shared
savings programs), including the 55
comment letters noted above, in a final
rulemaking.
For ease of reference, we are
numbering our solicitations of
comments in a continuous sequential
order, and we encourage commenters to
refer to these numbers in their
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submissions to us. Although we have
offered many specific solicitations of
comments in an effort to stimulate and
focus discussion, we do not mean to
imply that we are interested in receiving
comments only on the specific
questions noted below; rather, we
encourage comments on any and all
relevant issues to an exception or
exceptions for incentive payment and
shared savings programs. In addition,
we request that commenters consider all
of the issues in context and in
conjunction with each other, as well as
consider the exception holistically
rather than piecemeal. Many of the
specific solicitations below are related
to each other and may be better
addressed if grouped together.
We urge commenters to respond with
specificity and to include detailed,
practical examples whenever possible.
Commenters are encouraged to consider
the requirement under section
1877(b)(4) of the Act that any new
regulatory exception pose no risk of
program or patient abuse. Although the
following discussion segregates
individual issues, commenters are
encouraged to comment on and
recommend combinations of conditions
for an exception or exceptions that
would meet the ‘‘no risk’’ standard,
would be sufficiently bright line to be
enforceable and to facilitate compliance,
and would be sufficiently flexible to
foster beneficiary arrangements.
Commenters should consider suggesting
alternative safeguards when
recommending the elimination or
modification of a proposed condition or
when recommending adoption of an
alternative to a proposed condition. As
an initial matter, we are interested in
comments that address the best ways in
an exception or exceptions for incentive
payment or shared savings programs to
achieve transparency and
accountability, ensure quality of care,
and prevent disguised payments for
referrals. We request that commenters
address these goals in their comments.
To better understand and address the
variety of incentive payment and shared
savings programs that exist in the
industry or that parties would like to
implement, we are interested in detailed
descriptions of incentive payment
programs and shared savings programs
that include specific descriptions of the
structure and operations of the programs
and payments. We are also interested in
views addressing the likely evolution of
these programs.
b. Background: Incentive Payment and
Shared Savings Programs
As we discussed in both the CY 2009
PFS proposed rule, and the FY 2009
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IPPS proposed rule, the term
‘‘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 (including, but not limited to,
gainsharing) for the purpose of
achieving quality standards, generating
cost savings, and reducing waste. We
refer to these programs as ‘‘incentive
payment’’ and ‘‘shared savings’’
programs. Within the category of
‘‘incentive payment’’ programs, we
include P4P, also known as qualitybased purchasing, and other qualityfocused programs that do not involve
the sharing of cost savings from the
reduction of waste or changes in
administrative or clinical practice.
Within the category of ‘‘shared savings’’
programs, we include programs that
involve the sharing of cost savings
attributable to physicians’ efforts in
controlling the costs of providing
patient care, as well as hybrid programs
that involve both the sharing of cost
savings and payment for improvement
or maintenance of patient care quality.
For a discussion of incentive payment
and shared savings programs, DHHS
initiatives with respect to such
programs, and our proposed exception
for incentive payment and shared
savings programs, we refer the reader to
our solicitation of comments in the FY
2009 IPPS proposed rule regarding the
necessity of an exception to the
physician self-referral law for
gainsharing programs (73 FR 23692
through 23695) and the CY 2009 PFS
proposed rule (73 FR 38548 through
38552).
In the CY 2009 PFS proposed rule, we
described our concerns regarding
potential program and patient abuse
from the implementation of improperly
structured incentive payment and
shared savings programs. Specifically,
we stated:
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 (73 FR 38549).
We stated further:
Although properly structured shared
savings programs may increase efficiency and
reduce waste, thereby potentially increasing
a hospital’s profitability and contributing to
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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 1 year to the
next) without accountability for specific cost
reduction measures (73 FR 38550).
In addition, we expressed our
continued concern about stinting
(limiting the use of quality-improving
but more costly devices, tests or
treatments), cherry-picking (treating
only healthier patients as part of an
incentive payment or shared savings
program), steering (avoiding sicker
patients at the hospital sponsoring the
incentive payment or shared savings
program), and quicker-sicker discharges
(discharging patients earlier than
clinically indicated either to home or to
post-acute care settings).
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c. Solicitation of Additional Public
Comments
i. Distinguishing between ‘‘incentive
payment’’ and ‘‘shared savings
programs’’
In the CY 2009 PFS proposed rule, we
sought comments regarding ‘‘whether
separate exceptions for incentive
payment and shared savings programs
would be preferable and, if so, how they
should be structured, and which
requirements should appear in each’’
(73 FR 38552). Most commenters in
support of establishing an exception for
incentive payment and shared savings
programs recommended that we
establish two separate exceptions. Here,
we are requesting specific comments
regarding how [1] to define the terms
‘‘incentive payment program’’ and
‘‘shared savings program.’’ We also
request comments regarding [2] whether
the terminology ‘‘incentive payment’’
and ‘‘shared savings’’ programs is
appropriate or whether different
terminology would better describe the
range of nonabusive programs we intend
to cover under the proposed
exception(s). Whatever terminology we
employ, we must define the terms with
sufficient clarity to enable parties to
determine which exception, if more
than one is finalized, would be
applicable to the specific arrangement
being analyzed.
Commenters in support of the
adoption of two separate exceptions
frequently asserted that many of the
conditions in the proposed exception
are not applicable, or need not be
applicable, to incentive payment
programs, asserting that incentive
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payment programs do not pose the same
risk of program or patient abuse as
traditional gainsharing programs or
shared savings programs. We are
seeking comments that [3] identify with
specificity which conditions should be
made applicable to incentive payment
programs (and why), [4] identify which
conditions need not or should not be
made applicable to incentive payment
programs (and why), and [5] indicate
why it would not be necessary to
impose the same safeguards against
program or patient abuse on both types
of programs. For example, we seek
comments on [6] whether a program
involving cost savings measures that
also improve quality should be treated
as an incentive payment or shared
savings program.
ii. Risk of Program or Patient Abuse
As noted above, several commenters
questioned our ability to promulgate an
exception for shared savings programs
that satisfies the mandate under section
1877(b)(4) of the Act that any exception
issued using that authority pose no risk
of program or patient abuse. The
commenters asserted that, because
gainsharing implicates sections
1128A(b)(1) and (b)(2) of the Act,
commonly referred to as the Civil
Monetary Penalty (CMP) statute, any
exception to the physician self-referral
law for incentive payment and shared
savings programs would necessarily
pose a risk of program or patient abuse
and would be outside the scope of our
authority under section 1877(b)(4) of the
Act. We disagree with these
commenters. We believe that it is
possible within the meaning of section
1877(b)(4) of the Act to establish a set
of safeguards to guard against program
and patient abuse. Moreover, it is our
understanding that many incentive
payment programs would not involve
payments to physicians to reduce or
limit services to hospital patients.
However, we are interested in
comments that [7] specifically address
this issue in greater detail, including [8]
how we can satisfy the requirements of
section 1877(b)(4) of the Act if we do
not include a condition prohibiting
payment to a physician (under the
incentive payment or shared savings
program) for reducing or limiting items
or services furnished to Medicare or
Medicaid beneficiaries under the
physician’s direct care. In addition, we
are interested in comments regarding [9]
the utility of an exception that
incorporates conditions that are the
same as or similar to conditions that
have appeared in favorable advisory
opinions issued by the OIG on
gainsharing arrangements.
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iii. Design of the Program
In the CY 2009 PFS proposed rule, we
proposed protecting documented
programs that seek 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 (73 FR
38553). To be protected, the program
must achieve one or both of these goals
without an adverse effect on, or
diminution in, the quality of hospital
patient care services.
(1) Objective Medical Evidence and
Independent Review
Under the proposed exception,
incentive payment and shared savings
programs must be supported by
objective, independent medical
evidence indicating that the applicable
cost-savings or quality performance
measures would not adversely affect
patient care. We also proposed that
patient care quality measures must
derive from CMS’ Specifications Manual
for National Hospital Quality Measures.
Many commenters objected to this
limitation; however, the comments, for
the most part, did not contain
suggestions regarding other appropriate
lists of quality measures or whether
(and in what manner or under what
circumstances) we should permit parties
to establish their own quality measures
for inclusion in a protected incentive
payment or shared savings program. We
are seeking comments on this issue,
including [10] how we might avoid
protecting payments based on sham
measures or measures that do not reflect
objective quality outcomes or standards
but instead may be vehicles to reward
referrals.
We proposed in the CY 2009 PFS
proposed rule 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 proposed that this
review must be performed by an
independent medical reviewer; that is,
the review must be conducted by a
person or organization with relevant
clinical expertise that is not affiliated
with the hospital operating the program
under review and not affiliated with any
physician participating in the program
or with any physician organization with
which a participating physician is
affiliated. We also proposed that the
reviewer could not be participating (at
the time of the review) in any incentive
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payment or shared savings program
operated by the hospital (73 FR 38553
through 38554). A substantial number of
commenters objected to the requirement
of independent medical review,
claiming that the expense of
independent medical review would
likely be significant, and that many
hospitals may not be able to find an
‘‘independent’’ medical reviewer.
Commenters also contended that the
impact on patient care can best be
ascertained through individuals
associated with the hospital, because
hospital personnel and medical staff
physicians are intimately aware of
hospital operations and patient
populations.
We seek comments on [11] whether,
assuming that there is a need for
independent medical review, the need
would be greater if the exception were
to include outcome measures that are
not on the CMS-approved list. We also
seek comments on an alternative to
independent medical review that would
provide an objective, accurate and
complete review. Specifically, we
request comments addressing [12] how,
if no independent medical review is
required, we could ensure that a
hospital is objective in the review of its
incentive payment and shared savings
program, that programs operate
appropriately to improve (or maintain)
patient care quality, and that the
incentive payment or shared savings
program results in no diminution of
patient care quality or inappropriate
reduction in care. Finally, and
irrespective of whether we would
require independent medical review or
permit ‘‘in-house’’ review, we seek
comments on: [13] How, when and what
type of (for example, further review,
corrective action, or termination of the
incentive payment or shared savings
program) recommendations should be
made by the reviewer when the program
review identifies concerns with patient
care quality or the diminution in patient
care quality resulting from the
implementation of the incentive
payment or shared savings program; and
[14] requirements (including
timeframes) for the hospital to take
corrective action based on the
reviewer’s recommendations.
(2) Participating Physicians and
Payment Amounts
The proposed exception included a
requirement that the incentive payment
or shared savings program be structured
to require physician participation in the
program in pools of five or more
physicians, with payments being
distributed to members of each pool on
a per capita basis. Under the proposed
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exception, all physicians participating
in the program must be on the medical
staff of the sponsoring hospital at the
commencement of the program. Most
commenters objected to these
requirements, but did not provide clear
suggestions regarding how to address
our concern regarding disguised
payments that reward referrals or other
business generated by the physician in
the absence of such structural
requirements. Therefore, we are seeking
specific comments on alternatives to
these participation and payment
restrictions, as well as other safeguards
that we could include in an exception(s)
if we were to omit the ‘‘five-physician
pool,’’ per capita payment distribution,
and/or medical staff membership
requirements. We request comments as
to [15] whether, if pools of less than five
physicians are permitted, what the
minimum number of physicians should
be; [16] whether all participating
physicians must be in the same
specialty, and, if not, what issues are
raised by protecting arrangements
between hospitals and multi-specialty
physician groups; [17] whether
participating physicians should be
required to be on the medical staff at the
hospital at the commencement of the
program and, if not, how we should
address the risk that programs will be
used inappropriately as recruiting tools;
and [18] whether medical staff members
may be added during an ongoing
program and, if so, how we should
address the risk that payments would be
made to recruit physicians from other
area hospitals, especially hospitals that
might not be able to afford to offer a
similar program.
We also seek comments with respect
to limitations on payments under an
incentive payment or shared savings
program. Specifically, we are interested
in comments regarding whether: [19]
We should impose a cap on the payment
made per participating physician,
regardless of the amount of cost savings
or achievement of patient care quality
goals attributable to a particular
physician; [20] whether payments
should be limited in duration and, if so,
whether 3 years or some other period
should be the maximum time period for
payments; and [21] whether protected
payments should be reasonably related
to the measure that is achieved and, if
so, how a reasonable relationship
should be determined, and, if not, how
we could protect against excessive
payments that might induce referrals. In
this regard, we are interested in
comments addressing [22] methods for
protecting against excessive payments to
referring physicians who participate in
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the program but may contribute little or
no work or expertise to the program. We
are further interested in comments on
[23] the types of physicians who should
be protected participants and what it
should mean to be a ‘‘participating’’
physician. Finally, we are interested in
comments addressing [24] the concept
of restricting physicians from receiving
payments for previously achieved cost
savings or for meeting quality
improvement goals that are, or have
become over time, standard practice (for
example, we are concerned about
payments that amount to little more
than supplemental payments to
physicians to do nothing more than
what they are already doing) (73 FR
38555 through 38556).
In the CY 2009 PFS proposed rule, as
described above, we proposed that
payments to physicians be made
(whether directly to the physician or to
his or her qualifying physician
organization) on a per capita basis. We
also solicited comments that would
‘‘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
contributed more or less to the
achievement of the performance
measures’’ included in the program (73
FR 38555). Although many commenters
stated support for permitting payments
to physicians that directly correlate to
their personal efforts and achievement
of performance measures in an incentive
payment or shared savings program, few
comments provided sufficient detail
regarding how we could incorporate this
expansion into the exception without
risk of program or patient abuse. We are
interested in comments that [25] outline
with specificity how a hospital would
track or otherwise determine the
‘‘personal efforts’’ of a physician and
correlate the achievement of
performance measures to a particular
physician’s personal efforts and, in turn,
to the amount of the payment.
We also proposed a condition that
would prevent physicians from being
paid in a manner that reflected
increased volumes of Federal health
care program patients or services.
Commenters generally opposed this
proposed restriction. We recognize as
we stated in the CY 2009 PFS proposed
rule that volume changes can occur due
to market forces and physician practice
growth, rather than from changes in
referral patterns due to financial
incentives available to physicians
participating in an incentive payment or
shared savings program (73 FR 38555).
Where changes in the volume of Federal
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health care patients or services occur
because of financial incentives, a risk of
abuse exists. We are soliciting
comments that [26] specifically address
how to account for legitimate
fluctuations in the volume of Federal
health care patient procedures or
services and consider the potential that
volume increases can indicate altered
referral patterns when a physician is
participating in an incentive payment or
shared savings program. In addition, we
are seeking comments regarding [27]
possible ways to ensure against
increases in total Medicare expenditures
for patients for whom services are
provided under an incentive payment or
shared savings program.
We proposed to require hospitals to
make payments directly to participating
physicians or to a ‘‘qualified physician
organization,’’ which we proposed to
define as a physician organization
composed entirely of physicians
participating in the incentive payment
or shared savings program (73 FR
38553). We sought comments regarding
possible expansion of this condition to
allow payments to a physician
organization even if all of its affiliated
physicians were not participating in the
incentive payment or shared savings
program under which the payment is
made. We reiterate our concern that
payments made to physician
organizations with nonparticipating
physicians could be used to reward
such nonparticipating physicians for
their referrals. Many commenters
objected to the strict limitations on the
parties to whom a hospital may make a
payment under an incentive payment or
shared savings program. Commenters
generally urged greater flexibility in the
distribution of payments. We are
seeking here specific information
regarding [28] conditions that could be
imposed to ensure no risk of program or
patient abuse including, for example,
conditions on the use and distribution
of payments made to physician
organizations on behalf of participating
physicians.
(3) Costs Savings for Shared Savings
Programs
With respect to shared savings
programs, we proposed various methods
and sought comments on other methods
for limiting or capping the total amount
of cost savings available under the
program. We proposed a flat, 50 percent
limit on the amount of cost savings
eligible for sharing with participating
physicians, and also proposed requiring
rebasing of the baseline statistics against
which reduction in waste and cost
savings would be measured. In the
alternative, we proposed a surrogate
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method of capping total available
payments that would be actuarially
equivalent to a 50 percent cap with
annual rebasing of baseline statistics.
Many commenters responded that we
should impose no limits on how a
hospital determines the amount
available for shared savings payments,
while other commenters objected to the
50 percent cap and/or the rebasing
requirement. As we noted in the CY
2009 PFS proposed rule and above, our
goal is to finalize an exception (or
exceptions) that provide sufficient
flexibility for hospitals to structure and
implement a variety of nonabusive
incentive payment and shared savings
programs. We are seeking comments
that specifically address: [29] What
safeguards we could include in an
exception if we do not include a cap on
the total amount of cost savings
available for distribution to
participating physicians; [30] What
safeguards we could include in an
exception to ensure that physicians are
not paid for achieving performance
measures they achieved in prior periods
of the program if we do not require
rebasing of the baseline against which
reductions in waste or costs are
measures; [31] whether it is appropriate
to permit payments for continued
achievement (or maintenance) of
performance measures, waste reduction
or cost savings and, if so, what
safeguards we could include in an
exception if we were to do so (for
example, reduced payments for
maintenance of patient care quality
compared with payments for the
achievement of targets); and [32]
whether the answer to [33] differs for
incentive payment programs as opposed
to shared savings programs.
We have had limited opportunity to
review incentive payment and shared
programs for compliance with the
physician self-referral law, and we lack
familiarity with the specifics of
measuring achievements and calculating
payments under such programs. We
received insufficient information in the
public comments to set forth with
enough specificity conditions regarding
the calculation of cost savings so as to
enable parties to evaluate compliance
with the exception. We proposed to
require that payments that result from
cost savings be calculated based on
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 (73 FR 38556). Many
commenters stated that the term
‘‘acquisition costs’’ was unclear or that
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it is difficult to determine the actual
costs involved in providing specified
services, and suggested that we provide
additional guidance regarding these
concepts if we were to finalize this
condition on payments. We are seeking
additional and specific comments
regarding [34] the calculation of the
amount of total cost savings available
for distribution under a shared savings
program, including a discussion of
formulae used by parties to existing
arrangements.
(4) Protecting Quality of Care
We proposed that, under an exception
for incentive payment and shared
savings programs, no payments could be
made if the program resulted in a
diminution of patient care quality.
Additional issues were raised in the
public comments, and we seek further
comments on the following: [35]
Whether and, if so, how we should
address the situation in which the
implementation of an incentive
payment or shared savings program
results in a diminution in patient care
quality measures not included in the
incentive payment or shared savings
program; [36] whether we should permit
payments based on the global
improvement in patient care quality
instead of individually identified and
tracked patient care quality measures;
[37] if a program is structured to result
in payments when global quality
improves, whether and, if so, how
should we permit payments to be made
if only some of the quality measures are
met; [38] whether payments should be
permitted for the maintenance of patient
care quality (as opposed to the
improvement of patient care quality)
[39] whether payments should be
permitted for the achievement of
intermediate targets for patient care
quality and how intermediate targets
should be defined and measured; [40]
what types of medical evidence should
support quality measures, and how we
can ensure that quality measures are
supported by credible medical evidence;
and [41] whether measures must have
some relation to the patient populations
and practices at the hospital and, if so,
what the relation should be, and, if not,
how we could protect against programs
that are structured to reward physicians
for reaching subjective or limited goals
that do not substantially benefit the
hospital’s patients.
We seek additional information on
how parties measure patient care quality
and determine appropriate payment
amounts for the achievement of targets
for patient care quality measures. For
example, we request comments on: [42]
How quality improvement should be
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measured, including how a baseline
(that is, starting point) should be set
from which to measure the
improvement, how recent the baseline
should be, and whether the targets
should reflect regional data, national
data, or some other data; [43] whether
we should recognize a difference
between ‘‘quality improvement’’ and
‘‘quality maintenance’’ and, if so, how
we should define those terms in relation
to each other, whether an exception
should protect payments for both, and
whether they should be valued
differently (based on the supposition
that improving quality may require
more effort than maintaining it); and
[44] how we can prevent protecting
payments for programs that are not
meeting their quality goals or for
measures that, when achieved, result in
a diminution of patient care quality.
iv. Structure of the Arrangement
Between the Hospital Sponsoring the
Program and the Physicians
Participating in the Program
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(1) Documentation
In the CY 2009 PFS proposed rule, we
included in the proposed exception for
incentive payment and shared savings
programs a requirement that the
sponsoring hospital maintain certain
documentation regarding the program
that must be made available to the
Secretary upon request. Many
commenters supported this
requirement, while others stated that it
presented an undue administrative
burden. We are seeking comments
regarding [45] possible ways to reduce
the administrative burden and cost for
hospitals that would not hinder the
government’s ability to enforce the
physician self-referral law and ensure
compliance with a final exception (or
exceptions). We are also seeking
additional comments regarding [46] the
inclusion of an audit requirement with
respect to the calculations of cost
savings and payment amounts under the
incentive payment or shared savings
program. Many commenters supported
such a requirement, and stated that we
should permit the audit to be performed
‘‘in-house.’’ We are seeking comments
here regarding [47] whether such an
audit could satisfy our concerns
regarding the objectivity and accuracy of
the audit. Specifically, we seek
comments on [48] whether parties
should be required to monitor and track
each cost savings or quality measure
and, if so, how we should address the
need for transparency and
accountability.
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(2) Sharing of Global Savings
Of particular concern from a fraud
and abuse perspective is the sharing of
total (or global) savings for a particular
department or service line. Many
commenters urged us to permit
hospitals to share with physicians a
percentage or share of the total savings
in a particular department or service
line, calculated from one period to
another. The calculation and sharing of
such global savings would not involve
individually-tracked and measured
performance measures, a cornerstone of
the programs that have received
favorable advisory opinions from the
OIG to date. We seek comments
regarding [49] necessary safeguards to
ensure that a final exception for shared
savings programs, when considered in
its totality, would not present a risk of
program or patient abuse if we
permitted the sharing of departmental or
service line global cost savings. In
addition, we are interested in [50] the
impact that sharing such savings with
physicians would have on other
potential requirements of a final
exception, such as the requirement that
the calculation of cost savings and
physician payments be audited.
(3) Miscellaneous
We request comments on [51] whether
the exception should protect contracts/
arrangements between hospitals and
physician groups or only contracts/
arrangements between hospitals and
individual referring physicians (and, if
the exception should allow contracts/
arrangements between hospitals and
physician groups, how we could protect
against payments to physicians who do
not actively participate in the program
and who might be rewarded merely for
making referrals). Also, we seek
comments on [52] whether, if a
physician group participates, the
physician group may be paid if some of
its physicians fail to make quality
improvements; and [53] whether all
physicians in the physician group
should be required to participate in the
same measures.
v. Availability of Other Physician SelfReferral Exceptions
We note that there are many
exceptions for compensation
arrangements in § 411.355 and § 411.357
of our regulations, including exceptions
for bona fide employment relationships
(§ 411.357(c)), personal service
arrangements (§ 411.357(d)),
arrangements involving fair market
value compensation (§ 411.357(l)),
arrangements involving indirect
compensation (§ 411.357(p)), and
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services provided by an academic
medical center (§ 411.355(e)). We
believe that properly structured
arrangements involving physician
participation in an incentive payment or
shared savings program may meet the
requirements of one or more of the
existing physician self-referral
exceptions for compensation
arrangements. (An arrangement that
implicates the physician self-referral
statute need not satisfy more than one
exception.) We request comments on
[54] the extent to which a ‘‘stand-alone’’
exception(s) for incentive payment and
shared savings programs is necessary
given the existence of other
compensation exceptions, including the
ones mentioned above. We request
comments on [55] whether it would
preferable for us to modify aspects of
the existing exceptions to protect a
broader range of beneficial, nonabusive
incentive payment and shared savings
programs.
d. Conclusion
It is evident from the variety of
comments that we received and the
detailed descriptions from some
commenters of existing or ‘‘ideal’’
incentive payment or shared savings
programs that such programs can be
structured in a multitude of ways.
Experience with one program model
does not ensure an understanding of the
impact of another program model. The
structures of programs with similar
positive outcomes do not necessarily
resemble each other.
We intend to continue working
toward finalizing an exception (or
exceptions) for incentive payment and
shared savings programs. We do not
believe, as several commenters
suggested, that we must or should delay
the issuance of a final exception until
the completion of the gainsharing
demonstrations authorized by section
1866C of the Act and section 5007 of the
DRA. (See 73 FR 38550 for a description
of these initiatives.) However, without
the additional information discussed in
this preamble, our efforts to finalize an
exception(s) will be hindered. By
soliciting additional public comments
on the proposed exception for incentive
payment and shared savings programs,
we hope to acquire information that will
better inform the development of an
exception that is sufficiently flexible to
encourage the development and
implementation of beneficial,
nonabusive incentive payment and
shared savings programs that foster high
quality, cost-effective care for our
beneficiaries.
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2. Changes to Reassignment Rules
Related to Diagnostic Tests (AntiMarkup Provisions)
Section 1842(n)(1) of the Act requires
us to impose a payment limitation on
certain diagnostic tests where the
physician performing or supervising the
test does not share a practice with the
physician or other supplier that bills for
the test. We implemented section
1842(n)(1) of the Act by applying an
‘‘anti-markup’’ payment limitation to
technical components (TCs) of
diagnostic tests purchased from an
outside supplier, which has long
appeared in our regulations in § 414.50
and which is applicable to 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). In the CY 2008 PFS final rule with
comment period (72 FR 66222), relying
on section 1842(n)(1) of the Act, our
general rulemaking authority under
sections 1102(a) and 1871(a) of the Act,
and authority under section 1842(b)(6)
of the Act, we amended the anti-markup
provision in § 414.50. Specifically, we
revised the anti-markup provision to
apply to the 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
revised § 414.50(a)(2)(iii) to define 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, 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. We also
imposed an anti-markup payment
limitation 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. Under the CY 2008 PFS
final rule with comment period, if a
physician or other supplier bills for the
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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 the CY 2009 PFS proposed rule (73
FR 38502), we proposed revisions to the
anti-markup provisions in § 414.50, and
solicited comments on how best to
implement these approaches. We
proposed that the anti-markup
provisions would apply in all cases
where the TC or the PC 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 other supplier. We
proposed two alternative approaches to
determining whether the performing or
supervising physician ‘‘shares a
practice’’ with the billing physician or
other supplier. We also solicited
comments regarding other possible
approaches to address our concerns
regarding overutilization that can occur
when a physician or physician
organization is able to profit from
diagnostic testing services not actually
performed by or supervised by a
physician who ‘‘shares a practice’’ with
the billing physician or other supplier.
In what we designate here as
‘‘Alternative 1,’’ we proposed 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 stated 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. In light of
this proposal, we also requested
comments on how to consider locum
tenens and other arrangements under
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69799
which a physician provides occasional
services outside of his or her physician
organization, as we recognized that
circumstances may exist under which it
is beneficial or necessary for a physician
to provide diagnostic testing services to
more than one physician practice.
We proposed a second alternative
proposal, which we designate here as
‘‘Alternative 2,’’ which would maintain
much of the current regulation text, and
its ‘‘site-of-service’’ approach to
determining whether a physician
‘‘shares a practice’’ with the billing
physician or other supplier, that was
finalized in the CY 2008 PFS final rule
with comment period. In other words,
we reproposed to apply the anti-markup
payment limitation to non-purchased
TCs and PCs that are performed outside
the office of the billing physician or
other supplier. We also solicited
comments on whether this is the best
anti-markup approach or whether we
should employ a different approach.
Specifically, in Alternative 2, we
proposed 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) clarify
that, with respect to TCs, the antimarkup provision applies if the TC is
either conducted or supervised outside
the office of the billing physician or
other supplier; (3) clarify when we
consider the TC of a diagnostic test to
be purchased from an outside supplier;
(4) clarify that, for purposes of applying
the payment limitation in
§ 414.50(a)(1)(i) 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; and (5) include 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. Finally, we
solicited 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.
We received numerous comments in
response to the proposals related to the
anti-markup provisions. Some
commenters requested that we
withdraw both the CY 2008 PFS
rulemaking and the current proposals.
Other commenters offered varied
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support or criticism for one or both of
the proposed alternatives. Some
commenters expressed concerns about
eliminating legitimate, nonabusive
arrangements that serve Medicare
beneficiaries. Quality concerns were
raised by commenters both in favor of
and opposed to the proposals.
Commenters in support of Alternative
1 believe that it would be more
straightforward and easier to implement
than Alternative 2. Some commenters
responded to Alternative 1 by
requesting that a physician be able to
‘‘share a practice’’ with up to 3
physicians or physician organizations in
order to accommodate arrangements
that currently exist among many parttime physicians and the groups for
whom they work. These commenters
also stated that they would no longer be
able to support an in-office laboratory
employing part-time physicians if the
Alternative 1 approach was
implemented as proposed.
Some commenters offered support for
Alternative 2 and its ‘‘site-of-service’’
approach, which they argued would
curb abusive overutilization while
granting physicians more flexibility in
how to structure arrangements to
provide care as they see fit. Commenters
opposed to Alternative 2 were
concerned that this approach focuses
only on where the test is performed and
not by whom. Some commenters did not
support our proposal to clarify ‘‘office of
the billing physician or other supplier’’
as including diagnostic testing
performed in the ‘‘same building,’’ but
not in a ‘‘centralized building,’’
preferring that ‘‘office of the billing
physician or other supplier’’ also
encompass diagnostic testing performed
in a ‘‘centralized building.’’
Most commenters agreed with our
proposed clarification that the TC of a
diagnostic test is not ‘‘purchased from
an outside supplier’’ if the TC is both
conducted by the technician and
supervised by the physician within the
office of the billing physician or other
supplier. We received a few comments,
some in favor of and some opposed to,
the proposed exception for diagnostic
tests ordered by physicians in a
physician organization with no owners
who have the right to receive profit
distributions. Most of the comments that
we received in response to the ‘‘net
charge’’ solicitation expressed
dissatisfaction regarding the
disallowance of overhead costs in the
calculation of the ‘‘net charge.’’ Other
commenters, however, agreed that these
costs should not be included and that
only those charges that are incurred
from paying the physician providing the
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PC or supervising the TC should be
included.
We received a number of comments
addressing issues outside the scope of
this rulemaking, in particular, the inoffice ancillary services exception to the
physician self-referral law, which is
codified in § 411.355(b) of our
regulations. Commenters believed that
we must curtail the types of
arrangements currently permitted under
the in-office ancillary services exception
in order to curb overutilization through
the ordering of unnecessary diagnostic
tests.
After careful consideration of the
comments that we received, we are
adopting a flexible approach that
incorporates both proposed alternatives.
We are finalizing Alternative 1 with
some modifications, and retaining with
some modifications the present ‘‘site-ofservice’’ approach (Alternative 2) to
allow physicians to consider both
approaches in determining if the antimarkup provisions apply to particular
diagnostic testing services.
Arrangements should be analyzed first
under Alternative 1. Thus, where the
performing physician (that is, the
physician who supervises the TC or
performs the PC, or both) performs
substantially all (at least 75 percent) of
his or her professional services for the
billing physician or other supplier, none
of the services furnished by the
physician on behalf of the billing
physician or other supplier will be
subject to the anti-markup payment
limitation in § 414.50. If the performing
physician does not meet the
‘‘substantially all’’ services requirement
of Alternative 1, an analysis under the
Alternative 2 requirements may be
applied on a test-by-test basis to
determine whether the anti-markup
payment limitation applies. Under the
Alternative 2 ‘‘site-of-service’’ approach,
only TCs conducted and supervised in
and PCs performed in the office of the
billing physician or other supplier by an
employee or independent contractor
physician will avoid application of the
anti-markup payment limitation. Both
the ‘‘substantially all professional
services’’ and ‘‘site-of-service’’ tests are
measures of whether a performing/
supervising physician ‘‘shares a
practice’’ with the billing physician or
other supplier. With respect to
Alternative 2, we believe that
restrictions regarding the location of the
conducting and supervising of the TC
are essential to ensure that, if the test is
to be billed as performed by the billing
physician or other supplier, the billing
physician or other supplier exercise
sufficient control and a proper nexus to
the individuals conducting and
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supervising the test. Requiring that the
TC be conducted and supervised in the
office of the billing physician or other
supplier, under Alternative 2, creates
this control and nexus. We believe that
allowing billing physicians and other
suppliers that cannot satisfy Alternative
1 to comply with the requirements of
Alternative 2 on a case-by-case basis
affords physicians flexibility while
addressing our concerns regarding the
ordering of unnecessary diagnostic tests.
As we noted above, we have made
one modification to Alternative 1 in
response to comments we received.
Rather than requiring that a physician
work exclusively for one physician
practice, in order to ‘‘share a practice’’
with a particular physician or physician
organization, a physician must provide
‘‘substantially all’’ of his or her
professional services for that practice.
For purposes of Alternative 1, we are
defining ‘‘substantially all’’ as ‘‘at least
75 percent.’’ In this regard we note that
‘‘substantially all,’’ as used in certain of
our physician self-referral rules, is
defined as ‘‘at least 75 percent’’ (see
§ 411.352(d) and § 411.356(c)(1)).
Although the anti-markup provisions in
§ 414.50 and the physician self-referral
rules in § 411.350 through § 411.389 are
separate and distinct, we believe that
‘‘at least 75 percent’’ is an appropriate
test within the context of Alternative 1,
and we also wish to avoid any
unnecessary confusion that could result
from having one numerical test for the
anti-markup provisions and another
numerical test for the physician selfreferral rules. Thus, for purposes of
determining whether the anti-markup
provisions apply, the performing
physician (that is, the physician
supervising the TC or performing the
PC, or both) is considered to share a
practice with a physician group for
which he or she provides at least 75
percent of his or her professional
services—even if the physician works
for one or more billing physician groups
or other health care entities. The final
rule provides at revised § 414.50(a)(2)(ii)
that the ‘‘substantially all’’ requirement
is satisfied if the billing physician or
other supplier has a reasonable belief at
the time it submits a claim that: (1) The
performing physician has furnished
substantially all of his or professional
services through the billing physician or
other supplier for the period of 12
months prior to and including the
month in which the service was
performed; or (2) the performing
physician is expected to furnish
substantially all of his or her
professional services through the billing
physician or other supplier during the
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following 12 months (including the
month the service is performed).
We believe that our modification to
the proposal for Alternative 1 will
satisfy the concerns regarding locum
tenens arrangements (and part-time and
other on-call or similar arrangements),
provided that the performing physician
is not furnishing more than 25 percent
of his or her professional services as a
locum tenens physician (or in some
other capacity, such as a part-time
physician for another billing group or
moonlighting at a hospital).
We are also retaining the present siteof-service approach to determining
whether a physician ‘‘shares a practice’’
with the billing physician or other
supplier. This approach was reproposed
as Alternative 2, with a proposed
clarification that diagnostic testing
performed in the ‘‘same building’’ (as
defined at § 411.351) in which the
‘‘office of the billing physician or other
supplier’’ is located would not be
subject to the anti-markup provisions
(provided that the testing was not
purchased from an outside supplier).
We are adopting this clarification, but
deleting the references to purchased TCs
and PCs from § 414.50, for the reasons
explained below. We are also adopting
certain proposed clarifications and
definitions. Specifically, a physician or
other supplier may have more than one
‘‘office of the billing physician or other
supplier,’’ and the ‘‘office of the billing
physician or other supplier’’ is defined
as space in which the ordering
physician or other ordering supplier
regularly furnishes care (and with
respect to physician organizations, is
the space in which the ordering
physician performs substantially the full
range of patient care services that the
ordering physician provides generally).
We are adding to Alternative 2 the
requirement, with respect to the TC, that
the physician supervising the TC be an
owner, employee, or independent
contractor of the billing physician or
other supplier, and, with respect to the
PC, that the physician performing the
PC be an employee or independent
contractor of the billing physician or
other supplier. We are doing this in
order to simplify our rules and to avoid
having a separate basis for imposing an
anti-markup payment limitation for TCs
supervised and PCs performed by
outside suppliers. We explain our
rationale for this change in the next
paragraph.
We are not finalizing a definition of
outside supplier, and instead we are
deleting references to a ‘‘purchased’’ test
or interpretation in § 414.50 because
they are unnecessary, as explained
below. We note that section 1842(n)(1)
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of the Act requires us to impose an antimarkup payment limitation on
diagnostic tests that are performed or
supervised by a physician who does not
share a practice with the billing
physician or other supplier.
Traditionally, we have interpreted
section 1842(n)(1) of the Act as applying
to purchased TCs from an outside
supplier. Our longstanding policy of
having an anti-markup payment
limitation on purchased TCs was
codified in § 414.50, and retained in the
CY 2008 PFS final rule with comment
period. (Similarly, we imposed an antimarkup payment limitation on
purchased PCs in the CY 2008 PFS final
rule with comment period and we
proposed in the CY 2009 PFS proposed
rule to retain status as a purchased PC
as a separate basis imposing an antimarkup payment limitation.) Based on
our decision to adopt Alternative 1 and
to allow arrangements that do not meet
the requirements of Alternative 1 to
nevertheless avoid the anti-markup
payment limitation if diagnostic testing
services meet the requirements of
Alternative 2, we believe that it is not
necessary, and unduly complex, to use
purchased tests and purchased
interpretations as separate bases for
imposing an anti-markup payment
limitation. We provide a fuller
explanation below, at section N.2.h., for
deleting from § 414.50 references to TCs
and PCs purchased from an ‘‘outside
supplier.’’
We are not creating an exception for
tests ordered by a physician in a
physician organization with no
physician owners who have the right to
receive profit distributions. By
finalizing both proposed alternatives,
we believe that our concern that the
Alternative 2 approach could
disadvantage nonproblematic
arrangements involving nonprofit multispecialty groups that have campusbased treatment facilities (and thus do
not perform diagnostic testing in the
same building as where patients are
seen) largely becomes moot, as most
such arrangements should be able to be
structured to fit into Alternative 1, or
failing that, Alternative 2.
With respect to our specific
solicitations of comments, we are not
revising the meaning of ‘‘net charge’’ at
this time. Moreover, we are not
requiring at this time direct billing
instead of permitting reassignment
under certain circumstances; however,
we may propose to do so in a future
notice of proposed rulemaking. We
considered the various
recommendations commenters offered
for the effective date for our revisions.
We have decided to not deviate from the
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69801
effective date that is generally
applicable to this final rule with
comment period and, thus, the revisions
to § 414.50 will become effective on
January 1, 2009.
Finally, we did not propose to make
changes to the in-office ancillary
services exception and are not making
any changes to that exception in this
final rule; however, we are aware of the
commenters’ concerns and may propose
rulemaking on this issue in the future.
a. General comments
Comment: Some commenters were
concerned with their perceived
complexity of the anti-markup
provisions and requested that we delay
making any revisions to the rule. A
commenter argued that extending the
application of the anti-markup payment
limitation only adds another layer of
unnecessary complexity and confusion
to an area where physicians want to
provide high quality services in a cost
efficient manner. Some commenters,
including a large medical association,
requested that we withdraw the
proposals of this rule, as well as the
proposals contained in the CY 2008 PFS
final rule with comment period. In
contrast, one commenter stated that the
anti-markup provisions are consistent
with the aforementioned medical
association’s code of ethics, which
states that a physician should not charge
a markup, commission, or profit on
services rendered by others. A second
commenter noted that the same medical
association and many hospital bylaws
strongly discourage fee-splitting. Other
commenters urged us to not weaken or
dilute last year’s important anti-markup
provision.
Response: We believe that the antimarkup provisions in § 414.50, as
revised by this final rule with comment
period, are not inordinately complex.
We agree that it would be simpler to not
have any anti-markup provisions
beyond what existed prior to the CY
2008 PFS final rule with comment
period, but we remain convinced that
additional rulemaking is necessary to
address the potential for overutilization
through unnecessary testing. Likewise,
we agree that it would be simpler to
adopt the approach, as suggested by one
commenter, that we not allow any
reassignment of diagnostic testing
services and, instead, require direct
billing, but, without studying that
approach further, we have concerns that
doing so may unnecessarily prevent
nonabusive arrangements. Thus, the
resulting rule presents some complexity
in order to both allow flexibility for the
industry while implementing statutory
intent and addressing our concerns of
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the potential for overutilization and
patient abuse. To some extent, we have
simplified the anti-markup provisions
in § 414.50 by deleting superfluous
references to purchased TCs and PCs as
bases for imposing an anti-markup
payment limitation, for the reasons
discussed above and more fully below at
II.N.2.h.
Comment: A commenter
recommended that we finalize a
combination of both Alternative 1 and
Alternative 2, so that in order for the
anti-markup provision to not apply, an
employee or contractor physician
should work solely for the billing group
and meet the ‘‘site-of-service’’
requirements. Two other commenters
recommended that we finalize both
approaches and allow arrangements to
avoid application of the anti-markup
provisions if they comply with either
approach.
Response: We have adopted an
‘‘either or’’ approach to the two
proposed alternative approaches.
Diagnostic testing services furnished by
physicians who meet the requirements
of Alternative 1 (the ‘‘substantially all’’
services approach) will not be subject to
an anti-markup payment limitation.
However, arrangements that do not meet
the requirements of the Alternative 1
approach nevertheless will avoid
application of the anti-markup
provisions if they comply with
Alternative 2 (the ‘‘site-of-service’’
approach), as clarified in this final rule.
We believe that compliance with either
one of the two approaches finalized in
this rule will implement statutory intent
and address our concerns regarding
overutilization and abusive billing by
establishing a sufficient nexus with the
billing entity to justify not applying an
anti-markup payment limitation.
Comment: One commenter noted that
the application of some of the proposed
changes, both with respect to the antimarkup provisions in § 414.50 and with
respect to the IDTF standards in
§ 410.33, may restrict the diagnostic
testing services that physicians perform
for Medicare beneficiaries and may
result in more physicians electing to not
accept new Medicare patients. A
commenter stated that the proposed
revisions to the anti-markup provisions
threaten cooperative ventures and
arrangements and, consequently,
beneficiary access to quality Medicare
services, including ultrasound and other
diagnostic testing services. Other
commenters asserted that both proposed
approaches are misguided and do not
acknowledge the way that physicians
provide care under practical
circumstances. A commenter contended
that both proposals would hamper the
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ability of large groups to provide
diagnostic services. Essentially,
physician groups may have to bill
differently for some physicians,
resulting in an administrative burden
for physician groups, and possibly
curtailing the locations that a Medicare
beneficiary can receive diagnostic tests
and thus affecting patient care. Several
commenters argued that the adoption of
this rule will have the effect of
eliminating many legitimate,
nonabusive arrangements that serve to
expand access to care to Medicare
beneficiaries, while resulting in little or
no countervailing benefit to the
Medicare program
Response: We do not believe that the
revisions included in this final rule with
comment period will discourage
significantly or negatively impact
significantly legitimate, nonabusive
arrangements. We believe that the
revisions strike an appropriate balance
between allowing billing physicians and
other suppliers flexibility in structuring
their arrangements while protecting
against program abuse caused by
unnecessary diagnostic testing. As
explained in section II.I. of this final
rule, we are not finalizing our proposals
at this time to require physician offices
to comply with the IDTF standards in
§ 410.33.
Comment: Some commenters stated
that there is no evidence that bringing
diagnostic services into a physician
practice automatically leads to
overutilization; rather, many practices
do so in order to improve quality of
patient care and efficiency and not for
financial gain.
Response: We disagree with the
commenters’ statement that there is no
evidence that self-referral of diagnostic
services leads to overutilization. We
cited several studies in the CY 2008 PFS
final rule with comment period that
supported the proposition that
physician self-referral (that is, the
referral of diagnostic tests provided
within the physician practice) leads to
overutilization (72 FR 66311 through
66312). Additionally, since publication
of that rule, the Government
Accountability Office (GAO) has
published a study indicating the
overuse of some diagnostic testing when
performed in a physician’s office. The
GAO report, Rapid Spending Growth
and Shift to Physician Offices Indicate
Need for CMS to Consider Additional
Management Practices, (GAO–08–452),
showed that spending for imaging
services paid under the PFS more than
doubled over a 6-year period from 2000
through 2006. The report’s findings
reflect a link between spending growth
and the provision of imaging services in
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physician offices. The proportion of
Medicare spending on imaging services
performed in-office rose from 58 percent
to 64 percent and physicians received
an increased share of their total
Medicare revenue from imaging
services. We recognize that not all
arrangements necessarily lead to
overutilization. However, we are not
able to regulate per individual practice
and instead must issue rules of general
applicability to implement statutory
intent and address our concerns
regarding the potential for
overutilization through unnecessary
diagnostic testing.
b. Statutory Authority
Comment: A commenter noted that
the anti-markup provisions in section
1842(n)(1) of the Act are limited to
‘‘diagnostic tests described in section
1861(s)(3) [of the Act].’’ According to
the commenter, the physician
interpretation of a diagnostic test is not
a service described in section 1861(s)(3)
of the Act, as physician services are
described in section 1861(s)(1) of the
Act. Other commenters stated that, in
enacting section 1842(n) of the Act, the
Congress specifically limited the
applicability of the anti-markup
provisions to diagnostic tests.
Commenters expressed concern that
applying an anti-markup payment
limitation to the PC of diagnostic tests
is inconsistent with the plain meaning
of the law and Congressional intent.
Response: As explained in the
preamble to the CY 2008 PFS final rule
with comment period (72 FR 66308
through 66309), despite the fact that we
implemented section 1842(n)(1) of the
Act to impose an anti-markup payment
limitation only on the TC of diagnostic
tests, we are not prevented from
applying an anti-markup payment
limitation to the PC of a diagnostic test.
We believe that our general
rulemaking authority under sections
1102(a) and 1871(a) of the Act provides
us with authority to effectuate fully the
Congress’s intent in enacting section
1842(n)(1) the Act to remove the profit
incentive for ordering unnecessary
diagnostic tests. As we indicated in the
preamble to the CY 2008 PFS final rule
with comment period, the profit
incentive to order unnecessary
diagnostic tests remains if the billing
physician or other supplier may markup
the PC of the test (72 FR 66315).
Moreover, and as also discussed in the
preamble of the CY 2008 PFS final rule
with comment period, section
1842(b)(6) of the Act authorizes us, but
does not command us, to allow
reassignment of physician services,
including the PC of a diagnostic test (72
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FR 66309). At this time, we are not
prohibiting reassignment of PCs and
instead requiring direct billing, but we
are imposing restrictions on the
reassignment of PCs. That is, a PC that
is reassigned by the performing
physician to the billing physician or
other supplier that ordered the PC may
not be marked up by the billing
physician or other supplier, unless the
performing physician shares a practice
with the billing physician or other
supplier. If a physician or other supplier
that orders a PC does not find that
billing for the PC under an arrangement
that is subject to the anti-markup
provisions is profitable or financially
worthwhile, that physician or other
supplier is free to not accept
reassignment and instead have the
performing physician or other supplier
bill directly for the PC.
Comment: Several commenters
questioned the appropriateness or the
legality of imposing an anti-markup
payment limitation on the TC
supervised by, or the PC personally
performed by, a physician in the same
group practice as the ordering
physician. Some commenters asserted
that, because the anti-markup provision
in section 1842(n) of the Act, with its
relatively general language, came first,
and the much more specific
requirements of the physician selfreferral law in section 1877 of the Act
came later, the Congress has defined
specifically what it means for
physicians to ‘‘share a practice’’ for
Medicare purposes and we should not
interpret these provisions differently,
particularly without providing a clear
rationale for doing so. One commenter
contended that the ‘‘share a practice’’
concept in section 1842(n) of the Act
simply was the Congress’ short-hand
version of what later became the lengthy
definition of ‘‘group practice’’ in section
1877(h)(4) of the Act. Other commenters
asserted that, through the anti-markup
provisions, we are overlaying a new and
inconsistent set of requirements for
providing diagnostic testing, with
respect to bona fide group practices
meeting the physician self-referral law
requirements. According to these
commenters, we are doing so by relying
on the ‘‘anti-mark-up’’ language of
section 1842(n)(1) of the Act, even
though that language pre-dates the
physician self-referral law and explicitly
exempts testing performed by
physicians who ‘‘share a practice.’’ One
commenter stated that our proposals, if
adopted, would impose a new and
untenable burden on physician
practices that have already taken pains
to comply with the complex and
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onerous strictures imposed by the
physician self-referral law. Two
commenters stated that developing
policies under one law only to make
them largely irrelevant under another
law represents arbitrary government
action.
Response: Section 1877(h) of the Act
expressly states that the definitions it
sets forth apply only for purposes of
section 1877 of the Act. There is no
indication in either the text or the
legislative history of section 1877(h) of
the Act that the Congress intended the
definition of ‘‘group practice’’ to
correlate with the term ‘‘shares a
practice’’ in section 1842(n)(1) of the
Act. Also, we note that the definition of
group practice in section 1877(h) of the
Act is relatively narrow. That is, the
definition of ‘‘group practice’’ in section
1877(h) of the Act refers only to
‘‘members’’ of a group practice, which
could be construed to mean only
physicians with an ownership or
investment interest in the group. (Note
also that the definition of ‘‘group
practice’’ in section 1877(h) of the Act
allows the Secretary to impose other
standards by regulation.) Likewise, the
text of the in-office ancillary services
exception in section 1877(b) of the Act,
which allows referrals within a group
practice, can be read as being restricted
to services referred and performed by
members of the group (and services
performed by employees who are
supervised by a member of the group).
Therefore, even if the Congress did
intend the definition of ‘‘group
practice’’ in section 1877(h) of the Act
for purposes of the physician selfreferral law to correlate with ‘‘shares a
practice’’ in section 1842(n)(1) of the
Act for purposes of the statutory antimarkup provision, and also intended
that individuals whose referrals are
protected under the statutory in-office
ancillary services exception to the
physician self-referral law necessarily
‘‘share[] a practice’’ for purposes of the
statutory anti-markup provision (and we
agree with neither proposition), we
would not be required to take an
expansive view of what it means to
‘‘share[] a practice’’ for purposes of the
statutory anti-markup provision. We
also note that section 1842(n)(1) of the
Act does not prohibit us from using
other authority to impose an antimarkup payment limitation on TCs and
PCs.
As a policy matter, we do not agree
with the commenters that suggested that
we should except from the anti-markup
provisions any arrangement that
complies with the physician self-referral
rules. The anti-markup provisions,
when applied, limit only how much a
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physician or other supplier may bill
Medicare, whereas the physician selfreferral rules, when implicated and not
satisfied, prevent a physician or other
supplier (or provider) from billing
Medicare (for any amount).
Accordingly, we approach physician
self-referral rulemaking with added
caution, lest we prohibit a broad class
of arrangements that in some cases and
under certain circumstances do not pose
a risk of abuse. Thus, using our general
rulemaking authority and authority in
section 1877(b)(2) of the Act, we have
provided some flexibility, with respect
to which referrals are protected under
the in-office ancillary services exception
and the definition of a ‘‘centralized
building,’’ for purposes of our physician
self-referral rules. However, the fact that
the physician self-referral law, as
interpreted or implemented by us, does
not prohibit a certain type of
arrangement does not mean that we
should not take measures, through an
anti-markup approach, to address the
potential for overutilization or other
abuse that exists with certain
arrangements that seek to take
advantage of our definitions of ‘‘group
practice’’ and ‘‘centralized building’’
that are used for purposes of the
physician self-referral exception for inoffice ancillary services.
c. Alternative 1 (‘‘Substantially All’’
Professional Services)
Comment: Under Alternative 1 as
proposed, which we referred to in the
proposed rule as the ‘‘shares a practice’’
approach (although the second
alternative was also designed to ensure,
through a site-of-service methodology,
that performing physicians ‘‘share a
practice’’ with the billing physician or
other group), the anti-markup payment
limitation would not apply if a service
is provided or supervised by a physician
who ‘‘shares a practice’’ with the billing
physician or other supplier by virtue of
working exclusively with that physician
or other supplier. Several commenters
noted that this alternative mirrors the
statutory language, but contended that
the definition of ‘‘shares a practice’’
suggested by the preamble of the
proposed rule (that is, if a physician
contracts with more than one group, he
or she does not ‘‘share a practice’’ with
any group) is inconsistent with a
common sense interpretation of that
term. A commenter stressed that even a
physician who spends 1 percent of his
or her time interpreting
echocardiograms for an area hospital but
spends the remainder of his or her time
working for his or her group practice
would not be considered to ‘‘share a
practice’’ with the group under the
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proposed approach. Some commenters
suggested that physicians should be able
to have two or three relationships with
physician organizations and still be
deemed to share a practice with each
one and not be subject to the antimarkup provisions. Some commenters
requested that the anti-markup
provisions not apply when a physician
works for a physician group and also
works for another type of health care
provider or supplier, such as a hospital,
independent lab, or medical school.
Another commenter proposed that a
physician who spends more than 40
percent of his ‘‘total time spent on
patient care services’’ (as defined at
§ 411.352(d)) as a physician in any
group practice should be considered to
‘‘share a practice’’ with that group
practice for purposes of the anti-markup
provisions. According to the
commenter, this requirement would
ensure that a physician has a
meaningful level of actual economic and
professional integration with a group
practice for which the physician
provides DHS from which the group can
profit, but it would not penalize a
physician for providing professional
and supervisory services to others. The
commenter suggested that we should
permit a physician to share a practice
with no more than two groups and
require extensive integration with each
group.
A commenter stated that, if a
physician is a full-time or part-time
employee of a physician group, that
employment relationship in and of itself
should establish a sufficient nexus with
that group to justify not applying the
anti-markup payment limitation to his
or her professional services for the
physician group. This commenter also
noted that, under the proposed IDTF
revisions in the CY 2009 PFS proposed
rule (73 FR 38533 through 38535), a
physician may serve as an IDTF medical
director for no more than three IDTFs,
and suggested that a similar standard
could be used for the application of the
anti-markup provisions by not allowing
physicians to contract to provide
services for more than three physician
organizations.
One commenter stated its belief that
compliance with the proposed
requirements of the Alternative 1
approach may be possible by some
medical practices, such as those with
the capital and testing volumes
sufficient to warrant engaging or
contracting for exclusive physician
services needed to perform or supervise
diagnostic testing. However, the
commenter also asserted that the
proposal may be burdensome to many
physician offices. Another commenter
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asserted that some practices do not have
sufficient patient volume to support a
full-time pathologist or radiologist. A
commenter representing an oncology
practice noted that the practice
currently can bill a global fee for the TC
and PC, but the Alternative 1 proposal
would apply the anti-markup payment
limitation to the PC. The commenter
stated that use of a part-time radiologist
does not encourage overutilization, and,
therefore, the anti-markup payment
limitation should not apply.
Response: We are modifying the
proposed Alternative 1 approach so that
a performing physician (that is, a
physician who supervises the TC or
performs the PC, or both) will be
considered to share a practice with a
physician, physician organization, or
other supplier if the physician furnishes
‘‘substantially all’’ (at least 75 percent)
of his or her professional services
through that physician, physician
organization, or other supplier. This
means that a physician may furnish up
to 25 percent of his or her professional
services through any number of
physicians (including himself or
herself), physician organizations or
other suppliers, through acting as a
locum tenens physician, or in other
circumstances without disqualifying
himself or herself from sharing a
practice with the physician or physician
organization for which he or she
provides the bulk (that is, at least 75
percent) of his or her professional
services. For example, suppose
Physician A furnishes at least 75
percent of her services through
Physician Organization B, and furnishes
25 percent of her professional services
through Physician C and Laboratory
Supplier D. Under this example,
Physician A would be considered to be
sharing a practice with Physician
Organization B.
Revised § 414.50(a)(2)(ii) provides
that the ‘‘substantially all’’ requirement
is satisfied if the billing physician or
other supplier has a reasonable belief,
when submitting a claim, that: (1) The
performing physician has furnished
substantially all of his or her
professional services through the billing
physician or other supplier for the
period of 12 months prior to and
including the month in which the
service was performed; or (2) the
performing physician will furnish
substantially all of his or professional
services through the billing physician or
other supplier during the following 12
months (including the month the
service is performed).
Comment: In response to our request
for comments on how to address locum
tenens relationships under Alternative
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1, several commenters recommended
that the locum tenens relationships
should not count in calculating whether
a physician shares a practice with
another physician or other supplier.
Another commenter suggested that
abuse of locum tenens arrangements
could be avoided through requirements
for these arrangements in the Medicare
Claims Processing Manual, 100–04,
Chapter 1, § 30.2.11. One commenter
stated that, provided that locum tenens
physicians satisfy Medicare’s
requirements governing the use of and
billing for such physicians, the antimarkup payment limitation should not
apply to tests performed or supervised
by such physicians.
One commenter enumerated
additional circumstances in which
group practice physicians provide
services to or through entities other than
their primary group affiliation. These
circumstances included: (1) Covering for
another practice while it recruits to
replace a retired or deceased physician;
(2) providing specialty services at
hospitals or primary care clinics in areas
(often rural, but not always) that would
otherwise not have those specialties
available and convenient to patients;
and (3) providing specialty services to a
different practice that has only a parttime need for the service.
Another commenter noted the
potential for situations where a nonradiology practice contracts with a
radiologist as a locum tenens physician
to circumvent the anti-markup
provision. The commenter
recommended that we exclude only
same-specialty locum tenens
arrangements from the anti-markup
provision.
Response: In the CY 2009 PFS
proposed rule, we requested comments
on how, under Alternative 1, 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
the physician organization for purposes
of applying the anti-markup provisions.
To accommodate such temporary
physician arrangements, we have
modified Alternative 1 so that a
physician will be considered to share a
practice with a physician, physician
organization, or other supplier if the
physician furnishes at least 75 percent
of his or her professional services
through that physician, physician
organization, or other supplier. Thus,
the final rule allows a physician to
furnish up to 25 percent of his or her
professional services through other
arrangements (including for the purpose
of acting as a locum tenens physician)
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without disqualifying himself or herself
from sharing a practice with his or her
primary physician practice. We believe
that our modification provides
assurance that the performing physician
has a sufficient nexus with the billing
physician or other supplier so as to
share a practice with such physician or
other supplier. We are not persuaded
that we should disqualify the
performing physician from sharing a
practice with the billing physician or
other supplier if his or her locum tenens
or part-time arrangements do not
involve performing work for a billing
physician or other supplier engaged in
the same specialty as the performing
physician.
Immediately above, we address the
issue of whether a physician may share
a practice with a billing physician or
other supplier despite furnishing some
services through other arrangements,
including acting as a locum tenens
physician. In this paragraph, we address
the ‘‘flip side’’ of this issue, that is,
whether a billing physician or other
supplier can avoid application of the
anti-markup payment limitation where a
locum tenens physician is substituting
for a physician who does in fact perform
‘‘substantially all’’ of his or her
professional services through the billing
physician or other supplier. We wish to
clarify that, with respect to locum
tenens situations only, whether an
arrangement satisfies Alternative 1
depends on whether the permanent
physician (that is, the physician for
whom the locum tenens physician is
substituting) performs ‘‘substantially
all’’ of his or her professional services
through the billing physician or other
supplier. For example, assume
Physician A contracts with Group
Practice C to render services in place of
Physician B, who is on vacation.
Physician B performs 100 percent of her
professional services through Group
Practice C. This arrangement meets the
requirements of Alternative 1, because
Physician B performs at least 75 percent
of her professional services through
Group Practice C. It is irrelevant
whether, or the extent to which,
Physician A furnishes professional
services for Group Practice C outside the
locum tenens arrangements, for
purposes of determining whether the
anti-markup payment limitation applies
to the services provided by Physician A
under the locum tenens arrangement.
Comment: Many commenters were
opposed to the proposed Alternative 1
approach to determining whether a
physician shares a practice with the
billing physician or other supplier.
Some commenters stated that they
employ a pathologist in-house in order
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to improve quality of care by: (1) Using
specialized pathologists for digestive
diseases; (2) forming normative
standards based on the practices of the
physicians in the practice; and (3)
decreasing the turnaround time for
diagnostic tests. Other commenters, who
are physicians, stated that they were
unhappy with the professional services
provided by commercial laboratory
companies due to slow turnaround time
on pathology reports or difficulty in
asking follow-up questions of
pathologists at remote laboratories.
According to these commenters, by
employing a pathologist, a group
practice is able to ensure that the
pathologist is a specialist in a particular
practice area (for example,
gastroenterology), something the
commenters asserted they were unable
to do with commercial laboratories.
A commenter expressed concern
regarding Alternative 1 because, in the
commenter’s view, it would unfairly
limit a specialty practice (such as
gastroenterology or urology) from billing
and collecting the full global
reimbursement from the Medicare
program for services rendered by an inoffice pathologist unless that pathologist
works only for that physician group.
The commenter stated that it should not
matter if the pathologist works for more
than one group practice. This
commenter expressed concern that
eliminating the in-office laboratory
model would be a detriment to
Medicare beneficiaries. Another
commenter objected to our assertion
that anatomic pathology services
provided in a physician’s office can
result in overutilization. The commenter
expressed its view that
gastroenterologists do not overutilize
anatomic pathology, even when
profiting from it, because a colon biopsy
is much more invasive than clinical
laboratory tests such as fingerstick for
hematocrit or a dipstick urine.
Response: Billing physicians and
other suppliers will continue to be able
to employ a physician specialist on a
part-time basis. Under Alternative 1, if
the specialist furnishes ‘‘substantially
all’’ (at least 75 percent) of his or her
professional services through the billing
physician or other supplier, the
specialist ‘‘shares a practice’’ with the
billing physician or other supplier.
Because this rule finalizes both
proposed approaches, if an arrangement
does not satisfy the ‘‘substantially all’’
test of Alternative 1, the billing of a TC
or PC may still avoid application of the
anti-markup payment limitation if it
meets, as determined on a case-by-case
basis, the ‘‘site-of-service’’ requirements
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of Alternative 2. Alternatively, part-time
physicians can bill Medicare directly.
Comment: Some commenters
contended that adoption of Alternative
1 would interfere unfairly with the
practice of medicine by severely
limiting physician practices’ right to
organize themselves as they see fit to
deliver quality care to their patients.
These commenters stated that adoption
of Alternative 1 would prevent a group
from hiring a part-time pathologist, as is
common for gastroenterology practices
that provide pathology services to their
patients. According to the commenters,
the elimination of full reimbursement
(that is, the PFS amount) for pathology
services provided by part-time
pathologists would interfere with the
multidisciplinary approach that the
commenters have chosen to best serve
patients. One commenter asserted that,
despite the fact that the pathologist
simply may bill the Medicare program
directly, Alternative 1 interferes with
the practice of medicine. The
commenter asserted that our proposal is
equivalent to saying that a physician
group cannot hire a part-time
pathologist as part of its practice. The
commenter contended that finding a
pathologist who would travel to its
offices was not easy, and that informing
a pathologist that he or she can bill
Medicare directly from the group’s
office provides no incentive to the
pathologist. This commenter predicted
that the approach outlined in
Alternative 1 would force pathology to
revert to the traditional model of
referring physicians sending specimens
to a laboratory and receiving pathology
reports, rather than communicating with
the pathologist directly. One commenter
stated its belief that, if we permit a
pathologist to bill for professional
services directly, there is no reason for
the pathologist to travel to different
physician’s offices if he or she can
collect the same amount for professional
fees while working in his or her own
office. This commenter also suggested
that our proposal would discriminate
against small groups that cannot afford
to employ a full-time pathologist. The
commenter asserted that full-time
pathologists based in small
communities do not have the resources
to bill and collect on their own and
working for one group on a part-time
basis is not sufficient.
One commenter stated that it would
support Alternative 1 if it was extended
to allow a physician to be employed by
or under contract with up to three
physicians or physician organizations.
Commenters recommended that the
‘‘one practice’’ requirement be
eliminated so as not to harm small and
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mid-sized practices that cannot afford to
employ a full-time pathologist. Two
commenters stated that a physician
should be allowed to maintain ‘‘two or
three’’ independent contractor or
employee relationships with physician
organizations and be viewed as sharing
a practice with each. In the commenters’
view, this less restrictive approach
would account for different practice
situations while still providing
considerable protection against
Medicare program abuse. Another
commenter requested that, in drafting
any final rule, we permit physicians to
provide services in rural health or
medically underserved areas without
the secondary arrangement precluding
the physician from sharing a practice
with his or her physician organization.
Response: We have modified
Alternative 1 so that a physician group
will be allowed to hire a part-time
physician who will ‘‘share a practice’’
with that group, provided that the parttime physician furnishes ‘‘substantially
all’’ (at least 75 percent) of his or her
professional services through the group.
Again, in order to avoid application of
the anti-markup payment limitation
under this final rule, billing physicians
and other suppliers have the option of
satisfying either the requirements of
Alternative 1 (the ‘‘substantially all’’
professional services approach), or the
requirements of Alternative 2 (the ‘‘siteof-service’’ approach).
Comment: One commenter suggested
that Alternative 1 may be simpler and
more effective if we clarify that the antimarkup provisions apply only when the
billing physician or physician
organization generated the referral for
the pathology services. The commenter
noted that, in States that prohibit the
corporate practice of medicine,
independent clinical laboratories
contract with pathology groups to
perform pathology services. Because
such pathologists have employment or
contractual relationships with both a
pathology group and an independent
lab, the anti-markup provisions could be
triggered under Alternative 1 as
proposed. The commenter cited the CY
2008 PFS final rule with comment
period, where we stated that
independent laboratories and
pathologists do not trigger the initial
order for pathology services. Thus, the
commenter suggested that we clarify
that, under the CY 2009 PFS proposals,
anti-markup provisions still would only
apply if the physician billing for the
services was also the physician or
supplier who provided the initial order
for the service. Several commenters
were concerned that we did not mention
this in our commentary on the proposal.
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Response: As finalized in the CY 2008
PFS final rule, and as retained in this
final rule with comment period, the
anti-markup provisions for the TC or PC
of a diagnostic test apply only when the
billing physician or other supplier has
ordered the TC. For example, if a
laboratory contracts with a pathologist
instead of employing the pathologist to
perform the PC of a diagnostic test
(because the laboratory is located in a
State that has a prohibition on the
corporate practice of medicine), the
anti-markup payment limitation would
not apply to the lab if the lab chooses
to bill for the pathologist’s
interpretation, if the lab (or a party
related to the lab by common ownership
or control) did not order the test. For
example, Physician Group A orders the
TC and PC of a diagnostic test.
Laboratory B performs TC and contracts
with Physician C to perform the PC, and
Laboratory B bills for the TC and the PC.
In this example, the anti-markup
provisions would not apply to the TC or
the PC billed by Laboratory B. However,
if the interpreting pathologist decides to
order additional tests that are then
performed and/or interpreted by another
pathologist, the anti-markup payment
limitation potentially would apply if the
ordering pathologist wishes to bill for
the additional interpretations performed
by the different pathologist. Whether the
anti-markup payment limitation in fact
would apply would depend on whether
the arrangement between the ordering/
billing pathologist and the pathologist
performing or supervising the TC/
performing the PC satisfies the
requirements of Alternative 1 (and, if
not, whether it satisfies, on a case-bycase basis, the requirements of
Alternative 2).
Comment: Some commenters offered
support for Alternative 1. The
commenters believed that this
alternative has greater potential to limit
self-referral arrangements by requiring
that a physician practice should not be
able to mark up anatomic pathology
tests unless the physician who performs
and supervises the pathology services is
dedicated solely to that physician
practice. Another commenter strongly
urged us to focus on this alternative to
apply the anti-markup provision to all
TCs and PCs of diagnostic tests that are
ordered by the billing physician or other
supplier unless the physician who
performs and supervises the pathology
services is dedicated solely to that
physician practice or physician
organization. According to the
commenter, this would protect
legitimate multi-specialty group
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practices that employ their pathologists
on a full-time basis.
One commenter expressed support for
not allowing a pathologist to work for
more than one group (pathology or
subspecialty) in order to maintain the
quality and integrity of anatomic
pathology. Other remedies proposed by
this commenter included disallowing
any profit made from anatomic
pathology by the physician taking the
biopsy, or allowing ‘‘upcharging’’ only
on tests that can be reported that same
day.
Response: We believe that it is not
necessary to go so far as requiring a
physician not to work for more than one
physician organization, because
requiring a physician to furnish
‘‘substantially all’’ (at least 75 percent)
of his or her professional services
through a billing physician or other
supplier addresses our concerns
regarding overutilization and abusive
billing and also allows physicians the
flexibility to work for other physician
groups or health care entities or to work
as a locum tenens physician.
Comment: A commenter requested
that, if Alternative 1 is finalized, we
clarify that a physician employee would
be considered to be sharing a practice
with a physician or a physician group
whether the physician is hired directly
or is a leased employee, whereas other
commenters stated that employment
and contractual arrangements might not
be enough for determining whether a
physician ‘‘shares a practice’’ as this
could be circumvented via shareholder,
ownership, or joint partnership
arrangements.
A commenter asked that we consider
including physicians who are employed
by affiliated (common ownership)
organizations. This would allow
affiliated organizations to share
physician resources and expertise when
interpreting tests via teleradiology. The
commenter also noted a concern that
employers may not have knowledge of
all independent physician and supplier
contracts and may not have sufficient
mechanisms to ensure sole employment.
This commenter requested clarification
on how to manage independent
physician and supplier contracts to
ensure that physicians are employed by
only one organization.
Response: As finalized, any physician
(that is, regardless of employment status
or whether he or she is an owner of the
billing entity) who performs
‘‘substantially all’’ (at least 75 percent)
of his or her professional services for a
billing physician or other supplier will
be deemed to share a practice with that
billing physician or other supplier.
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d. Alternative 2 (‘‘Site-of-Service’’)
Comment: One commenter opposed
our reproposal of the existing ‘‘site-ofservice’’ approach for determining
whether the physician performing or
supervising the TC or PC of a diagnostic
test shares a practice with the billing
physician or other supplier, asserting
that it will do little to stifle the growth
of self-referral in lab arrangements.
According to the commenter, this
alternative focuses only on where the
test is performed and not by whom, and,
thus, specialty practices could profit
from their referrals simply by bringing
‘‘pod labs’’ in-house to the location
where the group provides physician
services. The commenter advocated for
the rule to require clearly a greater
connection and integration between the
performing physician and the practice
before the practice can profit from lab
tests ordered by physicians in the group.
Response: We recognize the potential
for arrangements that may be
troublesome to be restructured so that
the diagnostic testing is performed in
the same building as where the testing
is ordered; however, we are also
concerned that adopting Alternative 1
without leaving in place the site-ofservice approach of § 414.50 (which we
reproposed as Alternative 2) may
unnecessarily disrupt some
arrangements that do not appear
problematic to us. We will continue to
monitor arrangements and may propose
further changes if necessary. Also, we
continue to examine industry use of the
in-office ancillary services exception of
the physician self-referral rules, and
may propose changes to that exception
in a future rulemaking.
Comment: Some commenters did not
believe that site-of-service distinctions
are relevant to determining the
appropriate scope of section 1842(n) of
the Act. According to the commenters,
it should not matter if physicians are in
a bona fide group practice that has one
building or ten, and, if ten, the
particular geographic configuration of
the ten buildings should not matter. The
commenters questioned the legal or
policy justification for applying
different site-of-service rules for
purposes of the anti-markup provision
than those that are employed in the
physician self-referral regulations. Of
particular concern for these commenters
are distinctions that treat groups
differently from solo practitioners and
that discriminate between different
types of groups. The commenter gave
the example of a solo practitioner with
five offices with an x-ray machine in
each: provided that he or she regularly
practiced in each office, he could order
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diagnostic tests at all five locations, or
from any one of them, and the tests
would be treated as ‘‘furnished’’ inside
the practice rather than ‘‘purchased.’’
According to the commenter, a group
practice, on the other hand, that has
primary care physicians in one building
and specialists in another either has to
have x-ray machines in both buildings,
to be used only by the physicians in
each building, or do diagnostic testing
in only one building and treat the group
practice members in the other building
as ‘‘purchasing’’ the tests. The
commenter also described its
understanding of the proposed rule,
stating that, when diagnostic tests are
provided in a centralized building by a
non-profit multi-specialty group, they
would be considered ‘‘furnished,’’ but
the same tests provided by a physicianowned group that is otherwise
comparable in size and scope would be
considered ‘‘purchased.’’ The
commenter questioned the relevance of
these distinctions related to quality,
convenience, efficiency, utilization, or
potential abuse.
Response: Because the definition of
‘‘centralized building’’ at § 411.351
contains no requirements for minimum
size, proximity to the billing group’s
office, or staffing, and because our
current policy under the physician selfreferral rules is to allow billing groups
to have more than one centralized
building, we are concerned that the
potential exists for overutilization of
diagnostic testing through arrangements
involving a billing group and physicians
who have little or no real connection to
the billing group other than to serve as
a point of referral to generate profits for
the billing group. We believe that a siteof-service approach, employing the
‘‘same building’’ test, is a reasonable
means of determining whether a
physician shares a practice and has a
sufficient nexus with the billing
physician or other supplier.
We reiterate that, in addition to
section 1842(n) of the Act (and our
general rulemaking authority in sections
1102(a) and section 1871(a) of the Act
to ‘‘gapfill’’ in order to effectuate fully
the Congress’s intent in section 1842(n)
of the Act to impose an anti-markup
provision on certain diagnostic tests),
we have authority under section
1842(b)(6) of the Act to prescribe
limitations on the reassignment of tests
and test interpretations. However, in
this final rule with comment period, we
have adopted an ‘‘either/or’’ approach to
the two proposed alternatives. That is,
a billing physician or other supplier can
avoid application of the anti-markup
provisions by meeting either the
‘‘substantially all’’ professional services
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approach of Alternative 1 or, on a caseby-case basis, the ‘‘site-of-service’’
approach of Alternative 2, which are set
forth in revised § 414.50(a)(2)(ii) and
(iii). We believe that compliance with
either one of the two approaches
finalized in this rule will further our
goal of reducing the potential for
overutilization and other program or
patient abuse while providing sufficient
flexibility for the industry.
Comment: One commenter contended
that a ‘‘one building’’ ‘‘site-of-service’’
standard is not a realistic means of
ensuring proper billing arrangements, as
large single specialty practices often
span beyond one building. Another
commenter remarked that the site-ofservice alternative should not be
finalized because it would be
problematic for groups where specimens
are collected at multiple sites but
pathology diagnostic testing services are
done at a separate location owned or
leased by the group (the ‘‘hub-andspoke’’ arrangement). Some
cardiologists also expressed concern
that interpretations of EKGs and other
diagnostic testing services may be
limited by the proposed site-of-service
approach. One commenter provided the
example of a group that has three offices
but only one with a CT scanner. The
commenter noted that under the site-ofservice approach, the anti-markup
provision would apply to tests ordered
and supervised by physicians employed
by the group unless the physicians
worked in the same office where the CT
scanner was located.
Response: We believe that allowing
billing physicians and other suppliers to
comply with either the ‘‘substantially
all’’ professional services approach of
Alternative 1 or the ‘‘site-of-service’’
approach of Alternative 2 will address
our concerns while providing sufficient
flexibility for the industry. In the
situations described by the commenters,
if the performing physician furnished
substantially all of his or her
professional services through the billing
group, the anti-markup payment
limitation would not apply.
Comment: A commenter stated that
the Alternative 2 site-of-service
approach is useful in deterring program
abuse at locations other than the office
of the billing physician, and may benefit
from being merged with Alternative 1.
However, the commenter asserted that
we must address the issue of the level
of supervision that is required for the
TC of a pathology service. According to
the commenter, it is unclear what level
of supervision of the TC must be
furnished and where it must be
furnished, as CLIA does not govern the
TC of a pathology service. The
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commenter suggested that we require
that the TC be supervised by a physician
who meets, at a minimum, the general
supervisor requirements under CLIA,
including the requirements for the
subspecialties of histopathology or
dermatopathology, as necessary.
Another commenter expressed
concerns about supervision
requirements, noting that ‘‘the physician
who supervised the TC’’ is not defined
in the proposed rule or CLIA. The
commenter suggested that the
supervising physician should meet the
requirements for a laboratory director
under CLIA or use IDTF requirements.
The commenter noted that, in a separate
proposal in the CY 2009 PFS proposed
rule (73 FR 38533 through 38535), we
proposed to require physicians
performing testing in their offices to
enroll as IDTFs and meet the IDTF
requirements. Among the applicable
requirements of that proposal are that
the supervising physicians have
proficiency in the testing service being
supervised and meet the specific
requirements established by medical
specialty groups or carriers.
Response: With respect to our
proposal to revise the anti-markup
provisions in § 414.50, we did not
propose to impose special standards or
qualifications on the physician
supervising the TC, and decline to do so
here. Section 410.32 establishes the
level of supervision (general, direct, or
personal) for diagnostic tests potentially
subject to the anti-markup provisions
(that is, services covered under section
1861(s)(3) of the Act and paid under
part 414 of this chapter (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)).
Comment: A commenter requested
that if we adopt the Alternative 2
approach, we clarify that block leases
meeting the in-office ancillary services
exception ‘‘same building’’ test would
not trigger the anti-markup provision.
Another commenter stated that it
favored the Alternative 2 ‘‘site-ofservice’’ approach and that the antimarkup provisions should apply to any
shared facility in the ‘‘same building.’’
Response: We are adopting, in part,
the position favored by the first
commenter. Specifically, we are
finalizing the Alternative 2 approach,
which employs the definition of ‘‘same
building’’ as defined at § 411.351 (as we
proposed). However, we are not
incorporating each element of the same
building ‘‘location’’ test from the inoffice ancillary services exception as set
forth in § 411.355(b)(2). A TC that is
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performed (that is, both conducted by
the technician and supervised by the
physician) in the ‘‘office of the billing
physician or other supplier’’ will not be
subject to the anti-markup payment
limitation. Likewise, a PC that is
performed in the ‘‘office of the billing
physician or other supplier’’ will not be
subject to the anti-markup payment
limitation. Diagnostic testing services
are performed or interpreted in the
‘‘office of the billing physician or other
supplier’’ if they are performed or
interpreted in the ‘‘same building’’ (as
defined in § 411.351) as the space in
which the ordering physician or other
ordering supplier regularly furnishes
patient care. In the CY 2008 PFS, we
stated that various stakeholders
informed us that a physician
organization, such as a multi-specialty
group, may not provide substantially its
full range of services for a certain
specialty 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 situation, we proposed to
focus on the medical office space where
the ordering physician provides
substantially the full range of patient
care services that the ordering physician
provides generally.
We are not adopting the approach
suggested by the second commenter.
The fact that diagnostic testing services
are performed or interpreted in a space
that is leased by two or more groups
(but which is located in the same
building as the space in which the
billing physician or other supplier
regularly furnishes patient care) does
not cause the testing to be subject to the
anti-markup provisions. Example:
Physician A has an office located on the
first floor of Medical Office Building. In
his office, Physician A performs the full
range of services that he provides
generally (and thus the space meets the
criteria for the ‘‘office of the billing
physician or other supplier’’ under
§ 414.50(a)(2)(iii). Physician A orders a
diagnostic test, which is conducted by
a technician and supervised by
Physician B in a diagnostic testing
facility located in the basement of
Medical Office Building. Physician B
also performs the PC of the test in the
diagnostic testing facility. Physician B
reassigns her right to bill for the TC and
the PC of the test to Physician A. The
diagnostic testing facility is shared,
under block-time exclusive use leases,
by Physicians A, C and D. Neither the
TC, nor the PC, is subject to the antimarkup payment limitation, because the
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TC and the PC were performed in the
‘‘office of the billing physician or other
supplier.’’ We are permitting shared
space arrangements for diagnostic
testing services that occur in the ‘‘same
building’’ because we believe that such
arrangements can promote efficiency
without raising the same concerns for
overutilization or other abuse as
arrangements that involve centralized
buildings for diagnostic testing. We
reiterate however, that we continue to
have concerns with the present use of
the in-office ancillary services exception
and that we may issue a proposed
rulemaking at a future date to address
those concerns.
Comment: One commenter supported
the Alternative 2 ‘‘site-of-service’’
approach as a reasonable approach to
curbing potential overutilization. One
commenter characterized the ‘‘site-ofservice’’ approach as more fair than the
Alternative 1 approach, even though,
according to the commenter, Alternative
1 may control perceived overutilization
while respecting the rights of
pathologists and clinicians to practice
medicine in the best manner possible.
Another commenter generally was
supportive of both alternatives but
favored the Alternative 2 ‘‘site-ofservice’’ approach because, in the
commenter’s view, it would better
protect against physicians who wish to
profit from their own referrals by
preventing a multi-specialty physician
organization with several practice
locations from benefiting from its
referrals to one central anatomic
pathology laboratory. The commenter
acknowledged that these ‘‘hub-andspoke’’ arrangements may offer the
advantage of patient convenience where
diagnostic testing occurs following an
office visit with the patient present (for
example, an x-ray), but, in the context
of anatomic pathology services, these
arrangements do not benefit the patient
and may result in overutilization and
the provision of lower quality, less
specialized services.
Response: We received support for
both alternatives regarding when to
apply the anti-markup provision to the
TC and PC of diagnostic tests. After
reviewing all the comments, we have
decided to finalize, with some
modification, both approaches. (As
explained elsewhere in this preamble,
we have modified the Alternative 1
approach so that the performing
physician shares a practice with the
billing physician or other supplier if the
performing physician furnished
‘‘substantially all’’ (that is, at least 75
percent) of his or her professional
services through the billing physician or
other supplier, and we have modified
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the Alternative 2 approach by clarifying
that the performing physician must be
an employee or independent contractor
of the billing physician or other supplier
(which has enabled us to delete the
references to purchased tests from an
outside supplier.) Thus, billing
physicians and other suppliers may
satisfy the Alternative 1 ‘‘substantially
all’’ professional services approach or,
on a case-by-case basis, the Alternative
2 ‘‘site-of-service’’ approach in order to
avoid application of the anti-markup
payment limitation. We believe that
complying with either approach will
address our concerns regarding
potential overutilization and other
abuse by establishing a sufficient nexus
with the billing entity.
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e. Exception for Physician Organizations
That Do Not Have Any Owners Who
Have the Right To Receive Profit
Distributions
Comment: We proposed an exception
to the requirement that diagnostic
testing be performed in the ‘‘office of the
billing physician or other supplier’’ in
order to avoid application of the antimarkup payment limitation. We
proposed that (except for the purchase
of a TC from an outside supplier) the
anti-markup provisions would 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.
Some commenters supported adopting
the proposed exception. One commenter
requested clarification regarding
whether the exception would apply
only where the physician organization
does not have any owners who have the
right to receive profit distributions, or
whether it would apply provided that
the physician organization does not
have any physician owners who have
the right to receive profit distributions.
In the commenter’s view, if a physician
organization without physician owners
is a non-profit entity with a member that
is another non-physician non-profit
entity with typical membership rights,
the proposed exception still would
apply to avoid application of the antimarkup provisions. Another commenter
stated that an exception for diagnostic
tests ordered by a physician in a
physician organization that does not
have any physician owners with a right
to receive profit distributions is a brightline approach and consistent with
program safeguards. Another
commenter also asked that physician
practices with ‘‘titular’’ owners not be
subject to the final rule and that the
definition be consistent with the
definition of ‘‘titular’’ ownership in the
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FY 2009 IPPS Final Rule (73 FR 48434,
48693).
One commenter questioned whether
there is evidence suggesting tax-paying
medical groups behave, or are likely to
behave, in a manner substantially
different than tax exempt medical
groups. The commenter also stated that
it was unaware of any instances where
the Medicare program differentiates
policies based solely on institutional
mode of ownership, incorporation, or
tax status, and questioned if we have
statutory authority to create such an
exception based on type of ownership.
Response: We have determined that it
is not necessary to finalize an exception
for diagnostic tests ordered by a
physician in a physician organization
that does not have any owners who have
the right to receive profit distributions.
By finalizing both proposed alternative
approaches to avoiding application of
the anti-markup payment limitation we
believe that our concern that the
Alternative 2 approach could hinder
arrangements involving nonprofit multispecialty groups that have campusbased treatment facilities (and, thus, do
not perform diagnostic testing in the
same building where patients are seen)
largely becomes moot, as most such
arrangements should be able to be
structured (or are already structured) to
meet the requirements of either the
Alternative 1 or Alternative 2 approach
finalized here. Similarly, there is no
need to create an exception for titular
owners.
f. Definition of the ‘‘Office of the Billing
Physician or Other Supplier’’
Comment: One commenter, generally
supportive of our proposed clarification
of the definition of ‘‘office of the billing
physician or other supplier’’, questioned
its application in Example 2 from the
proposed rule (73 FR 38547) which
would allow two separate physician
organizations to share space used for
diagnostic testing that is located in the
same building in which the physician
organizations have their respective
offices. The commenter asserted that
allowing two or more providers to share
a laboratory undermines the antimarkup payment limitation, essentially
enabling ‘‘pod labs’’ to regain their
ability to facilitate markups by the
referring physician or physician
organization. The same commenter also
requested clarification regarding
Example 3 in the proposed rule (73 FR
38547), in which 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,
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69809
but that is not true for space located in
Building C. The group practice provides
diagnostic testing services in Buildings
B and C.’’ We noted in this example
that, under the proposed definition of
the ‘‘office of the billing physician or
other supplier,’’ the anti-markup
payment limitation would not apply to
diagnostic testing services provided in
Building B, but would apply to those
services provided in Building C. The
commenter stated that it agreed with our
conclusion, if the ordering physician or
supplier’s services were provided in
Building B. According to the
commenter, if the ordering physician
provided his or her services in Building
A, the anti-markup provisions should
apply.
Response: We do not agree with the
commenter’s assertion that our revisions
to § 414.50(a)(2)(iv) undermine the antimarkup provisions and enable ‘‘pod
labs’’ to regain their ability to facilitate
markups. In particular, we refer the
reader to the definition of the ‘‘office of
the building physician or supplier’’ at
§ 414.50(a)(2)(iv), which includes space
in which diagnostic testing services are
performed, that is in the ‘‘same
building,’’ (as defined at § 411.351), in
which the ordering physician or
ordering supplier regularly furnishes
patient care (and more specifically, for
physician organizations, in the same
building in which the ordering
physician provides substantially the full
range of patient care services that the
ordering physician provides generally).
Many of the potentially abusive pod lab
arrangements that led to our extension
of the anti-markup provisions to the PC
of diagnostic testing services involved
independent contractor pathologists
who performed services in off-site
pathology labs. Those arrangements did
not have the type of nexus with the
group practice required under
§ 414.50(a)(2) (that is, the pod labs were
not within the same building in which
the ordering physician provided
substantially the full range of patient
care services).
We do agree with the commenter’s
analysis of Example 3 given in the
proposed rule.
Comment: One commenter requested
that, if adopted, the proposal for
Alternative 2 should include detailed
examples that provide clear definitions
for several key terms, including ‘‘office
of the billing physician or other
supplier,’’ ‘‘conducting and supervising
the TC,’’ and ‘‘full range of services.’’
The commenter believes that, without
these definitions, our intent will be
misconstrued and subject to potential
abuse.
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Response: We do not provide a
definition for ‘‘conducting and
supervising the TC’’ in the regulation
text, as we believe that the meaning of
‘‘conducting’’ is clear on its face; that is,
the term ‘‘conducting the TC’’ refers to
the technician’s (or physician’s)
performance of the test. Nor do we
believe that it is necessary to define the
term ‘‘supervising.’’ For a service to be
covered by Medicare, the regulations at
§ 410.32 define and specify various
levels of supervision (that is general,
direct, or personal supervision). The
anti-markup provisions, when applied,
limit the amount a physician or other
supplier may bill Medicare. In the
context of the applicability of the antimarkup provisions, we are requiring
that the physician supervising the TC be
present in the same building (as defined
at § 411.351); however, this has no
impact on other Medicare billing
requirements, which may require a
specific level of supervision as
described above. We decline to define
the term ‘‘full range of services,’’
because this would vary greatly based
on factors such as the specialty of the
ordering physician, the types of services
within the physician’s specialty, and the
focus of services at the specified
practice.
Comment: According to one
commenter, the ‘‘office of the billing
physician or other supplier’’ for multispecialty groups should include medical
office space in which the physician
group provides substantially the full
range of services of one or more of the
specialties of the group. The commenter
contended that this requirement would
ensure an adequate nexus between the
physician practice and the testing being
conducted in the building. The
commenter asserted that limiting the
location to a building in which the
ordering physician provides
substantially the full range of services
that the ordering physician typically
provides imposes unnecessary
restrictions that are overly burdensome
when compared to the purpose of the
proposed rule. Another commenter, in
similar comments, urged us to consider
replacing ‘‘ordering physician’’ with the
words ‘‘ordering physician or a member
of the ordering physician’s group
practice.’’ According to the commenter,
this revision would permit any
physician member of a group practice to
utilize the group’s centralized
designated health service (‘‘DHS’’)
facility (and bill under the normal
physician fee schedule), provided that
the facility is located in the same
building where the group practice
provides patient care services on a full-
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time basis. To avoid the potential
problem presented by a group practice
with multiple offices, none of which
provide the full range of patient care
services provided by the group as a
whole, the group proposed that we
eliminate the requirement that the group
practice provide in the same building
‘‘substantially the full range of patient
care services that [it] provides
generally.’’ The commenter suggested
replacing this requirement with a
requirement that the group practice
provide in the same building ‘‘physician
services unrelated to the provision of
DHS on a full time basis.’’ According to
the commenter, this revision would be
consistent with the physician selfreferral law and regulations, would
permit all physician members of a group
practice to utilize the group’s
centralized DHS facility (provided that
the facility is located in the same
building where the group provides other
physician services), and would permit
the group to bill for all DHS provided
in such a facility under the Medicare
physician fee schedule.
Response: We believe that the changes
recommended by the commenters
would not guard adequately against
potential overutilization. In addition,
we believe that sufficient flexibility is
afforded multi-specialty groups and
others by allowing arrangements to
satisfy the requirements of either the
Alternative 1 or the Alternative 2
approach, as revised.
Comment: One commenter expressed
concern that the provision is more
complicated than necessary and, rather
than a definition of ‘‘office of the billing
physician or other supplier,’’ a
definition of an ‘‘outside entity’’ is
needed to determine which services
would be affected by the anti-markup
provisions. The commenter suggested
‘‘outside entity’’ should be defined as an
entity with a different identification
number (for example, tax identification
number) than the billing entity. The
commenter asserted that our attempt to
define ‘‘office of the billing physician or
other supplier’’ results in ‘‘nonsensical
situations’’ in which the anti-markup
provisions do not apply if the diagnostic
test is done on a different floor of the
same building but do apply if it is done
in a different building, even if the two
buildings are closer together than the
two floors.
Several commenters argued that the
‘‘same building’’ test is unworkable and
contrary to longstanding CMS policy
concerning testing performed in a
‘‘centralized building.’’ According to the
commenters, the ‘‘same building’’
proposal assumes an old-fashioned
health care delivery system—that is,
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that all physician services are still
delivered in a single practice location.
According to these commenters, given
market demands for services in multiple
urban, suburban and rural locations, the
idea that diagnostic testing services
should be provided only in a building
where ‘‘substantially the full range’’ of
other physician services also are
provided is anachronistic. The
commenters opposed the
implementation of the ‘‘same building’’
test as it relates to the proposed antimark-up provisions due to the alleged
economic losses and decreased
operating efficiencies that will result.
The commenters contended that the fact
that the diagnostic equipment is located
in a separate building does not support
an inference that the diagnostic services
are not an integral part of the practice,
as our proposal assumes.
Response: Under this final rule, the
anti-markup provisions will not apply
to the TC or PC of a diagnostic test
where the performing physician shares
a practice with the billing physician or
other supplier. With respect to a TC or
PC of a diagnostic testing service, the
performing physician is considered to
share a practice with the billing
physician or other supplier if: (1) He or
she furnishes substantially all (at least
75 percent) of his or her professional
services through the billing physician or
other supplier; or (2) the TC is
conducted and supervised, or the PC is
performed, in the office of the billing
physician or other supplier. We believe
that, in the situation where an
arrangement would otherwise be subject
to the anti-markup payment limitation
because the performing physician does
not furnish at least 75 percent of his or
her professional services through the
billing physician or other supplier,
services that satisfy the site-of-service
approach indicate a sufficient nexus
between the performing physician and
the billing physician or other supplier.
We proposed clarifying that the ‘‘office
of the billing physician or other
supplier’’ protects diagnostic testing
that takes place in the ‘‘same building’’
(as defined at § 411.351) in which the
ordering physician sees patients
because, following publication of the CY
2008 PFS final rule with comment
period, stakeholders expressed concern
that arrangements in which the
diagnostic testing takes place on one
floor of a building, but the billing
physician or other supplier sees patients
on another floor, could be subject to the
anti-markup provisions. We agree with
those stakeholders that it would be
unnecessarily disruptive to impose the
anti-markup payment limitation on
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those types of arrangements, but we do
not believe that it is appropriate to go
further and define ‘‘office of the billing
physician or other supplier’’ as
including diagnostic testing space that
is in a separate building from where the
ordering physician sees patients.
Specifically, we are unwilling to define
‘‘office of the billing physician or other
supplier’’ as including diagnostic testing
space in a ‘‘centralized building’’ due to
the potential overbreadth of that
definition with respect to some
arrangements. We also reject a square
footage test in lieu of using the ‘‘same
building’’ definition because the former
may be more difficult to enforce and the
latter is an already-existing, welldefined concept.
Comment: Several commenters
responded to our solicitation for
comments that would describe current
business arrangements, such as those
that take place on a ‘‘campus,’’ and that
would suggest any additional or
alternative criteria to permit such
arrangements to avoid application of the
anti-markup provisions. We received a
few comments suggesting that we
exempt arrangements taking place on a
campus, and suggesting criteria for how
we would define ‘‘campus.’’ For
example, one commenter suggested that,
to be considered ‘‘on campus,’’ the
diagnostic center/building/entity must
be located within the main building(s),
or located in the physical area
immediately proximate to the provider’s
main building(s). Alternatively, the
commenter suggested, the diagnostic
testing could be performed in other
areas or buildings that are not proximate
to the main building(s) but which are
fully integrated (that is, financially
integrated and administered in concert
with overall operations standards,
guidelines, rules and directives), with
governance and operations functions
determined by central administrative
processes and structures. Another
commenter encouraged us to consider
the ‘‘office of the billing physician or
other supplier’’ to encompass all
buildings on a campus or within a
multi-campus organization and the area
of the entire legally-owned organization,
regardless of where the service is
performed. Another commenter noted
that physician practices currently are
required to list each practice location
with the Part B carrier, and asserted
that, because of this, there is adequate
information for CMS (through the
carrier) to monitor the campus
arrangement to assure that the
geographic layout of the physician
practice is a bona fide campus.
Response: We believe that, at this
time, providing a definition of
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‘‘campus’’ that would be both workable
for the industry yet address our
concerns of potential overutilization
would be difficult and may add
unnecessary complexity to the final
rule. We believe that the commenters’
concerns will be alleviated by allowing
arrangements to satisfy the requirements
of either the Alternative 1 or the
Alternative 2 approach, as revised.
Comment: A commenter questioned
whether we intended ‘‘ordering
physician’’ to mean an individual
physician or any physician in the group.
According to the commenter, in many
specialty groups, a particular ordering
physician will work at only one
location, but the diagnostic services are
provided at another location, where
other physicians in the same group and
in the same specialty provide
substantial physician services. The
commenter asserted that, if we mean
that, in order to avoid application of the
anti-markup payment limitation, a
specific individual physician must
provide the substantial physician
services in that particular location
where the diagnostic services are
provided, the proposal would render
unprofitable many existing lawful
arrangements for single-specialty
practices with multiple locations. The
commenter further asserted that our
proposal would require physicians in
multi-practice locations to rearrange
schedules so as to rotate through
practice locations where the diagnostic
testing services are provided.
One commenter contended that the
focus on where the ordering physician
regularly furnishes care will affect all
physician groups where all the
physicians are not located in the same
building and diagnostic testing services
are only offered in a few of the group’s
locations. According to the commenter,
the physician self-referral law requires a
group practice with multiple locations
to function as one group, and group
practices have structured their
arrangements to meet existing
governmental requirements and to serve
patients. The commenter asserted that
changing these requirements may make
it impossible for some groups to
continue to provide these services to
Medicare beneficiaries.
Response: We believe that the
commenters’ concerns that physician
practices with multiple locations will
not be able to meet the ‘‘site-of-service’’
approach are adequately addressed by
allowing billing physicians and other
suppliers to comply with either the
requirements of Alternative 1 or
Alternative 2.
Comment: A commenter requested
that the definition of ‘‘office of billing
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69811
physician or other supplier’’ be
modified to include a mobile van that is
used in the parking lot of a building in
which the physician group sees
patients. Otherwise, the commenter
argued, the use of mobile MRI
essentially will be barred. According to
the commenter, physician groups that
use mobile MRI on an exclusive basis
because of the nature of their practices
are not committing any abuse that we
should address in the anti-markup
provisions. Another commenter noted
that alternative 2, as proposed, would
not allow groups to operate mobile
diagnostic testing services performed in
mobile vehicles, vans or trailers because
they are specifically excluded from the
definition of ‘‘same building’’ at
§ 411.351.
Response: We are not modifying the
definition of the ‘‘office of the billing
physician or other supplier’’ to include
a mobile van that is used in the parking
lot of a building in which the physician
group sees patients. ‘‘Same building,’’ as
defined at § 411.351 of the physician
self-referral regulations, specifically
excludes a mobile vehicle, van, or
trailer. Therefore, unless provided in a
mobile unit that qualifies as a
‘‘centralized building’’ (as defined at
§ 411.351), diagnostic services provided
in the parking lot of a building in which
a physician group sees patients already
would be subject to the physician selfreferral restrictions and would not be
protected under the in-office ancillary
services exception. In the January 4,
2001 Phase I final rule with comment
period, we discussed our specific
reasons for declining to include within
the definition of ‘‘same building’’ a
mobile van or other unit (66 FR 889
through 892). We are concerned with
the potential for confusion if we were to
have one definition of ‘‘same building’’
for physician self-referral purposes and
another, more expansive definition for
purposes of applying the anti-markup
payment limitation. Moreover, we
decline to expand the definition of
‘‘same building’’ for purposes of
applying the anti-markup provisions
given the potential we see for
overutilization through arrangements
that take place outside the ‘‘same
building.’’ Again, arrangements that do
not satisfy the requirements of the
Alternative 2 ‘‘site-of-service’’ approach
may fit under the requirements of the
Alternative 1 ‘‘substantially all’’
professional services approach.
g. Services Performed at a Site Other
Than the Office of the Billing Physician
or Other Supplier
Comment: A commenter offered
strong support for the proposed
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clarification that ‘‘if the TC is conducted
outside the office of the billing
physician or other supplier, the antimarkup provision applies irrespective of
whether the supervision takes place in
the office of the billing physician or
other supplier.’’ The same commenter
also supported our proposal that the
anti-markup payment limitation would
apply 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.’’ Another
commenter supported the proposed
change that the anti-markup payment
limitation would apply if the TC is
either conducted or supervised outside
the office of the billing physician or
other supplier in order to eliminate
confusion among providers when
determining whether the TC is deemed
to be provided by an outside supplier
for purposes of the anti-markup
provisions. Another commenter
expressed concern that the TC will be
considered to be performed outside the
office of the billing supplier if the
physician is not in the office when the
test is being performed. According to
the commenter, this runs counter to
long standing Medicare regulation and
policy regarding the supervision of
diagnostic tests, as many of these tests
do not require physician presence
during the performance of the test. The
commenter argued that changing this,
requiring physicians to be present,
would only inflate healthcare costs.
A commenter recommended that TCs
and PCs of non-purchased items
performed outside the office of the
billing physician or other supplier not
be subject to the anti-markup
provisions, noting that many
audiologists are self-employed and
perform testing services for off-site
physicians. The commenter further
asserted that audiology services do not
require physician supervision, and per
CMS transmittal 84 (issued February 29,
2008 and effective April 1, 2008), these
services are to be billed by the provider
of the service and benefits reassigned to
the employer. The commenter
contended that there has been no
evidence of abuse with respect to billed
audiology services, so no change is
warranted.
Response: We are adopting our
proposal that, for purposes of satisfying
the requirements of Alternative 2 with
respect to the TC, the TC must be both
conducted and supervised in the office
of the billing physician or other
supplier. Although the requirement that
the supervising physician be present in
the office of the billing physician or
other supplier may be more restrictive
than some Medicare coverage and
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payments regulations governing
supervision of tests, we believe that our
amendment to § 414.50(a)(2)(iii) is
necessary in order to minimize the
potential for overutilization and
program abuse. We do not believe that
healthcare costs would be inflated if
physicians were required to be present
in the office of the billing physician or
other supplier. If the test was not
conducted within the office of the
billing physician or other supplier, and/
or the physician supervision did not
occur within the office of the billing
physician or other supplier, the service
would still be payable by Medicare.
We recognize that where audiologist
services are performed by an
audiologist, no physician supervision is
necessary, and therefore the antimarkup provisions do not apply
(because § 414.50 applies to tests
performed by a physician). We note
further, however, that the TC of some
audiological tests can be conducted by
a technician and supervised by a
physician, in which case, the antimarkup provisions potentially are
applicable to the TCs and PCs of such
tests. Although the commenter stated
that there is no evidence of abuse with
respect to billed audiology services, we
are not required to demonstrate that
fraud or abuse has occurred in order to
finalize our proposals, but rather we
attempt to guard against the potential
for overutilization or patient abuse, and
we strive to make distinctions between
specific types of diagnostic services
only when there is a persuasive reason
to do so. We are unpersuaded to make
such a distinction here. As noted above
at section II.N.2., and as discussed more
fully below at section II.N.2.h. in
response to a comment, we are deleting
references to purchased TCs and PCs
from § 414.50.
Comment: Commenters expressed
concern that the anti-markup provisions
would apply when cardiologists
perform the PC of a diagnostic testing
service procedure in a hospital or other
facility, as is often the case for complex
or high risk procedures, because the test
is conducted outside the office of the
billing physician. Commenters asserted
that cardiology groups that provide
outreach services in rural areas and are
the only providers of certain cardiac
subspecialty services in such areas are
concerned that their provision of
hospital-based cardiac diagnostic tests
to rural patients could become
financially impossible under the antimarkup provisions, thereby reducing
access to care for this already
underserved population.
Response: We do not expect the antimarkup payment limitation would
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apply in the situation described by the
commenter, because, under Alternative
1 as finalized in this final rule with
comment period, the performing
cardiologist likely would share a
practice with the cardiology group
billing for the PC (or would be billing
for the PC himself or herself). If the
cardiologist reassigns payment to the
hospital which then bills for the PC, the
anti-markup payment limitation would
not apply because the hospital did not
order the PC.
h. Definition of Outside Supplier
Comment: We proposed that the TC of
a diagnostic test is not purchased from
an outside supplier if the TC is both
conducted and supervised in 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.
(For ease of reference, we refer to this
below as the ‘‘primary proposed
definition’’.) In the alternative, we
proposed that: (1) 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; and (2) 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 considered 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.
Several commenters offered support of
the primary proposed definition of
outside supplier. One such commenter
also requested that the final rule make
clear that, for anti-markup purposes
only, the performing supplier with
respect to the TC would be the
physician who supervised the TC, even
when the technician is not an employee
of the billing physician or other
supplier.
One commenter supported the first
alternative proposed definition of
outside supplier. This commenter
suggested that the physician
organization should be permitted to
mark up the TC only if the technician
is an employee and the supervising
physician is on-site and is also an
employee of the billing physician or
physician organization. One commenter
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supported adoption of the second
alternative proposed definition. The
commenter expressed its view that this
definition provides sufficient flexibility
to ensure that the anti-markup
provisions will not be applied unless
there is an inadequate relationship
between the individual who performs or
supervises the test and the billing entity.
Response: As explained above at
II.N.2., we are deleting from § 414.50
purchased tests and interpretations from
an ‘‘outside supplier’’ as separate bases
for imposing an anti-markup payment
limitation. After reviewing the
comments, we have concluded that
employing the concept of a purchased
TC or PC as a separate basis for
imposing an anti-markup payment
limitation is unnecessary, redundant,
and potentially confusing in light of our
decision to finalize Alternative 1 and to
allow arrangements that do not meet the
requirements of Alternative 1 to avoid
application of the anti-markup
provisions if they meet, on a case-bycase basis, the requirements of
Alternative 2. If we were to adopt any
of our proposals for the definition of
‘‘outside supplier,’’ it would mean we
would effectively impose an antimarkup payment limitation on some
arrangements that meet the
‘‘substantially all’’ services requirement
of Alternative 1. We believe that a
physician who performs ‘‘substantially
all’’ of his services through a particular
billing physician or other supplier
‘‘shares a practice’’ not only within the
meaning of Alternative 1, but also
within the meaning of section
1842(n)(1) of the Act. Moreover,
although we considered adopting the
second proposed alternative definition
of ‘‘outside supplier’’ so that a TC
would 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
(regardless of the employment status of
the technician or where the technician
conducts the test), this too would be
problematic in light of our decision to
adopt Alternative 1 but also allow
arrangements that do not meet the
requirements of Alternative 1 to avoid
application of the anti-markup
provisions by meeting, on a case-by-case
basis, the site-of-service criteria of
Alternative 2. That is, with respect to
arrangements that do not meet the
requirements of Alternative 1 and thus
must meet the site-of-service
requirements of Alternative 2, adopting
our second alternative definition of
‘‘outside supplier’’ would have been
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superfluous because, under Alternative
2, the TC must be both conducted and
supervised within the office of the
billing physician or other supplier. We
retain the requirement, present in all of
the proposed definitions of ‘‘outside
supplier,’’ that the physician must be an
employee or independent contractor of
the billing physician or other supplier
by incorporating the requirement into
the Alternative 2 criteria. Similarly, we
believe that an anti-markup payment
limitation on purchased PCs is
unnecessary with respect to diagnostic
testing services that meet the
requirements of Alternative 2, because
we are adding the requirement to
Alternative 2 that the physician
performing the PC is an employee or
independent contractor of the billing
physician or other supplier. Thus, as
finalized, we are deleting the references
in § 414.50 to purchased tests and
interpretations from an outside supplier.
As finalized, the anti-markup payment
limitation will apply to TCs and PCs
that meet neither the requirements of
Alternative 1 nor Alternative 2, without
regard to whether the TC or PC was
purchased from an outside supplier.
Comment: A commenter requested
that we clarify our use of the term
‘‘conducted or supervised’’ because a
physician may ‘‘supervise’’ an imaging
procedure, for instance, even though he
or she is not necessarily the physician
who will be interpreting a test.
According to the commenter, Medicare’s
determination as to the level of
supervision required for a specific test
supports this conclusion. The
commenter stated that a CT scan, for
instance, when performed without
contrast requires only general
supervision, whereas the same test
performed with contrast requires direct
supervision. The commenter asserted
that this difference is due to the relative
levels of medical risk to a patient during
a test, not the interpretation of results.
The commenter requested that we
clarify that a ‘‘supervising’’ physician
need not be the physician responsible
for interpreting test results or images.
Response: The commenter is correct
that the supervising physician need not
be the physician responsible for
interpreting test results or images.
Comment: For purposes of the antimarkup payment limitation only, we
proposed to define the ‘‘performing
physician’’ with respect to the TC as the
physician who supervised the TC and,
with respect to the PC, as the physician
who performed the PC. One commenter
supported this proposal, but requested
several clarifications. The commenter
understood the proposal to mean that
the performing supplier of the TC is the
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physician who supervised the TC rather
than the technician who actually
conducted the test. The commenter
inquired whether, if the anti-markup
provision were applied in this instance,
the group could recover only the fees it
paid to the physician for the TC and not
any amounts paid directly to the
histotechnologist who furnished the TC.
The commenter also requested
clarification regarding application of the
rule where a group purchases the TC
directly from an outside supplier or
histotechnologist, without any
physician involvement.
Response: The commenter is correct
in that the performing supplier of the
TC is the physician who supervised the
TC. Where the anti-markup payment
limitation applies, the billing physician
or other supplier may bill for the lowest
of the following amounts: (1) The
performing supplier’s net charge to the
billing physician or other supplier; (2)
the billing physician or other supplier’s
actual charge; or (3) the fee schedule
amount for the test that would be
allowed if the performing supplier
billed directly. With respect to the
commenter’s question regarding
whether a TC purchased from a supplier
‘‘without any physician involvement,’’
as noted in this section II.N.2.h., we
have deleted the references to
purchased tests or interpretations from
an ‘‘outside supplier.’’ The anti-markup
payment limitation will apply if a TC is
supervised by a physician who does not,
within the meaning of Alternative 1,
share a practice with the billing
physician or other supplier and the TC
does not meet the site-of-service
requirements of Alternative 2 (that is,
the TC was not conducted in the ‘‘office
of the billing physician or other
supplier’’ or was not supervised in the
‘‘office of the billing physician or other
supplier’’ by a physician who is an
owner, employee, or contractor of the
billing physician or other supplier). If
the TC does not require physician
supervision under our rules, the antimarkup provisions are inapplicable.
i. Specific Solicitation of Comments
(1) Net Charge
Comment: We stated that we were
interested in receiving comments
concerning the calculation of the ‘‘net
charge’’ when the anti-markup
provisions apply (73 FR 38548). In
response, many commenters expressed
concern that we did not propose to
allow practices to which the antimarkup provisions apply to recoup at
least their direct practice costs where
the practice is limited to billing
Medicare its ‘‘net charge’’ for the testing
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service. One commenter asserted that if
a group provides diagnostic tests at a
site other than the ‘‘office of the billing
physician or other supplier,’’ the
calculation of a net charge is difficult
and punitive because a group practice
cannot consider all of the actual
components of costs incurred, thereby
compelling the group practice to lose
money. Another commenter argued that
it is ‘‘grossly unfair’’ to not allow
physicians to recover any overhead
costs. The commenter further contended
that, although we may be concerned
about physicians who may ‘‘pad’’ their
charges with illegitimate amounts, this
does not justify penalizing providers
who incur appropriate and often costly
overhead costs. According to the
commenter, it would go against wellestablished Medicare policy to not allow
physicians to include legitimate costs in
calculating a net charge. Another
commenter stated that many suppliers
would incur a loss, not just fail to profit,
if these ‘‘confusing and hyper-technical
rules’’ are adopted. For example, the
commenter asserted, a billing physician
would be prohibited from billing for the
costs incurred when a technician
performs the TC of a test because the
physician group may bill only for the
cost of the physician who supervised
the test. The commenter also stated that
the proposal effectively prohibits the
payment for qualified technicians in the
performance of the TC of diagnostic
tests, or, in the alternative, requires that
physicians who choose to provide their
patients with such tests do so at a loss.
One commenter explained that it is
common practice for physician groups
to provide pathologists with office
space, equipment, administrative
services, billing and collection services,
and other services and then bill for the
PC itself. The commenter urged that net
charges should be defined to include
these overhead costs rather than just the
amount the physician group pays the
pathologist to perform the PC.
According to this commenter, it is
critical that physicians be able to recoup
actual and readily allocable costs
attributable to these services. If they
cannot, the commenter predicted,
gastroenterology groups will be forced
to stop utilizing their labs for Medicarereimbursed services, and patient care
will suffer.
Another commenter suggested that we
allow a group practice to include in the
calculation of ‘‘net charge’’ actual
additional incremental costs incurred by
the group which are directly allocable to
the provision of the service, for
example, rental charges for a facility
used exclusively to provide diagnostic
tests. If billing or administrative staff are
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hired by the group solely to provide
billing services related to the provision
of diagnostic tests, such costs should
appropriately be considered in
calculating net charge. The commenter
contended that requiring that such costs
be associated exclusively with
providing the diagnostic tests for which
payment is sought will ensure that only
costs actually needed to provide the
tests are included in the calculation of
net charge. The commenter further
asserted that this will permit groups to
provide better diagnostic health care
services for their clients without losing
substantial money on every test
performed.
A commenter stated that, without a
proposed definition for ‘‘net charge,’’ it
did not understand how the antimarkup provisions could be applied
fairly and consistently to testing
provided by physician groups. The
commenter stated that physician groups
have standard fees for diagnostic test
components that they charge to patients
and payers and that, in order to
determine an ‘‘inside’’ charge the
group’s usual and customary external
charges would have to be recognized.
According to the commenter, a fair net
charge calculation would need to
include the cost of equipment, supplies,
technical personnel, related benefits,
and allocated space, utilities, taxes and
general overhead, which vary between
practitioners.
Another commenter stated that there
should not be an allowance made to
recover overhead expenses, such as
billing expenses, rental charges, or
equipment expenses, as these expenses
will only help underwrite the cost of the
laboratory and will be contrary to the
goal of reducing overutilization.
According to this commenter, the only
costs that should be included in the
calculation of ‘‘net charge’’ are those
directly paid to the pathologist
performing the PC or supervising the TC
and should be limited to the W–2 salary
income of the pathologist, not including
any bonus.
Response: After considering the issue
further, we decline at this time to make
any changes to what we allow to be
included in the calculation of ‘‘net
charge.’’ As we stated in the preamble
to the CY 2008 PFS final rule (72 FR
66319 through 66320), we are concerned
that, allowing billing physicians and
other suppliers to recoup costs such as
overhead in situations in which the
anti-markup provisions apply, would
undermine a purpose of the anti-markup
payment limitation because the
incentive to overutilize (to recover
capital outlays and other costs) would
still be present. Therefore, where the
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billing physician or other supplier pays
the performing supplier a fixed fee for
the TC or the PC, the ‘‘net charge’’ is the
fixed fee (exclusive of any charge that is
intended to reflect the cost of equipment
or space leased to the performing
supplier by or through the billing
physician or other supplier, per
§ 414.50(a)(2)(i)). Where a fixed fee is
not paid, the billing physician or other
supplier is limited to the salary and
benefits it paid to the performing
supplier for the TC or PC. As we
indicated in the CY 2008 PFS final rule,
it is the responsibility of the billing
entity to ascertain the amount it paid for
the TC or PC. The billing entity should
maintain contemporaneous
documentation of the methodology and
information used to calculate the net
charge, and may do so in any reasonable
manner (72 FR 66318).
(2) Direct Billing
Comment: In the CY 2009 PFS
proposed rule, we solicited comments
on whether, in addition to or in lieu of
the anti-markup provisions, we should
prohibit reassignment in certain
situations and require the physician
supervising the TC or performing the PC
to bill Medicare directly (73 FR 38548).
One commenter opposed any
requirement that a physician performing
either the TC or the PC of diagnostic
tests directly bill for such services. The
commenter stated that the Congress
enacted the anti-markup provisions in
section 1842(n) of the Act rather than
adopt the already established direct
billing requirement for clinical
laboratory services. The commenter
argued that we should not second-guess
the Congress’ decision and choose to
eliminate the system of assignment and
reassignment that is currently in place.
Another commenter agreed with the
first commenter and stated that
reassignment is beneficial to both
physicians and patients because
physicians gain flexibility to establish
the most appropriate employment or
contractual relationships for their lives
and lifestyles and patients benefit by
having medical services combined on
one bill, which avoids confusion and
additional paperwork. A commenter
opposed to direct billing stated that,
with respect to the situation in which
multiple suppliers are engaged in the
treatment of a patient, a prohibition on
reassignment would force suppliers to
bill Medicare directly only for the
services provided directly by each
supplier, resulting in a doubling of the
claims that are submitted, with an
increase in billing expenses. The
commenter asserted that this
prohibition would also be a concern for
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locum tenens physicians who are, by
agency definition, independent
contractors. According to the
commenter, it does not have the
infrastructure to submit and collect
payments from Medicare, and thus its
contracts are based on the ability to
reassign its Medicare claims to the
physician or practice it is supporting.
Some commenters were in favor of
direct billing, stating that itemized
billing encourages transparency relative
to the amounts paid for the TC and PC
of tests ordered by the billing physician
or group. The commenters stated that an
itemized bill would identify the PC and
TC providers, the services provided, and
associated charges as separate line items
on a single Medicare claim form. The
commenters further asserted that we
would be able to reconcile TC and PC
components without an increase in
billing expenses to either the providers
or Medicare. One commenter expressed
its view that the most straightforward
way to address potential overutilization
caused by physicians being able to
profit by billing for diagnostic services
performed by others would be to
implement a direct billing requirement.
The commenter suggested that this
would be a simple, understandable,
bright-line rule that could be effectively
implemented and monitored. Another
commenter supported the establishment
of direct billing for anatomic and
clinical pathology services for all
payers, public and private, so that
payment should be made only to the
person or entity that performed or
supervised the service, except for
referrals between laboratories
independent of a physician’s office.
According to this commenter, this
policy would be consistent with ethics
principles that discourage fee-splitting.
Response: We appreciate the
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. The issues
raised and the suggestions made by the
commenters will be taken into
consideration for purposes of future
rulemaking. As we noted above in
section II.N.2.a., we agree that it would
be simpler to adopt the approach, as
suggested by one commenter, that we
not allow any reassignment of
diagnostic testing services and, instead,
require direct billing. However, without
studying that approach further, we have
concerns that doing so may
unnecessarily prevent nonabusive
arrangements.
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(3) Effective Date
Comment: In the CY 2009 PFS
proposed rule, we solicited comments
on whether revisions made by the CY
2008 PFS final rule with comment
period (but which were delayed until
January 1, 2009 through a final rule
published on January 3, 2008 (73 FR
404)) should go into effect on January 1,
2009, and whether any proposals from
the CY 2009 PFS proposed rule that we
may finalize should go into effect on
that date, or whether some or all of the
revisions should be delayed past
January 1, 2009. One commenter urged
us to implement the anti-markup
provisions without delay, as we have
been studying this issue since 2004. The
commenter asserted that sufficient time
has passed for consideration of
comments on the issue. The commenter
also expressed its view that the antimarkup payment limitation will not
affect access to critical patient services,
only the ability of ordering providers to
profit from their referrals.
One commenter suggested an effective
date of July 1, 2009, to provide
sufficient time to restructure affected
relationships. Another commenter,
opposed to the anti-markup proposals,
suggested that, if we revise the
provisions currently in effect, the new
provisions should not be effective until
December 31, 2010 at the earliest. The
commenter asserted that such a delay
would ensure providers a reasonable
amount of time to restructure their
service and billing arrangements for
consistency with the new provisions.
Another commenter asserted that the
delayed portions of last year’s rule
should not go into effect on January 1,
2009, and that neither of the alternative
approaches discussed in this year’s
proposal should be finalized. The
commenter stated that we achieved our
goal of regulating so-called ‘‘pod labs,’’
and asserted that extending similar rules
based on site-of-service beyond the
pathology laboratory context risks
disruption to a wide variety of
diagnostic testing services that are
genuinely ‘‘inside’’ group practices.
Commenters claimed that these
proposals have made it virtually
impossible for physician practices or
suppliers potentially subject to these
rules to plan for compliance or
alternative arrangements by January 1,
2009. One commenter requested that, if
we do proceed with the extension of the
anti-markup provision, the effective
date of the rule be delayed until
regulatory language can be proposed for
each of the alternatives under
consideration and there has been
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69815
additional time to understand the
impact of each proposal.
A commenter recommended that we
delay beyond January 1, 2009, the
application of any further revisions
until we can fully evaluate the effect of
such revisions on physician groups and
work with the medical community to
simplify and streamline the anti-markup
provisions, so that their application is
clear to all involved. One commenter
requested that we consider delaying the
proposals until further evaluation is
completed on the impact of recent
changes affecting physicians such as
MIPPA, DRA, ‘‘Bottom-Up
Methodology’’ and the proposed IDFT
requirements. Another commenter
recommended that implementation
should be delayed and that we should
use the process set forth by the Congress
in MIPPA to establish accreditation
requirements for medical imaging to
assess the appropriate use of imaging
services and to examine the perceived
overutilization of in-office imaging. A
commenter recommended that we defer
to the Congress regarding concerns of
overutilization of diagnostic testing
services. According to the commenter,
the directives in MIPPA, released after
the current proposed rule, are much
clearer on this issue. The commenter
noted that the Congress did not amend
the anti-markup provision, choosing
instead to direct the agency to develop
a demonstration project to determine
the appropriateness of advanced
diagnostic imaging services furnished to
Medicare beneficiaries and require
accreditation of advanced diagnostic
imaging suppliers by 2012.
Response: We do not agree with the
commenters that suggested a delayed
effective date beyond January 1, 2009
for either the revisions made by the CY
2008 PFS final rule with comment
period or the revisions that we are
making in this CY 2009 PFS final rule
with comment period. We have decided
to make the finalized revisions effective
as of January 1, 2009. When we delayed,
until January 1, 2009, the application of
the revisions to § 414.50 we made in the
CY 2008 PFS final rule with comment
period (except with respect to certain
diagnostic testing arrangements
involving anatomic pathology
performed in a ‘‘centralized building’’
for which the revisions were applicable
January 1, 2008), we stated that we
planned to issue clarifying guidance as
to what constitutes the ‘‘office of the
billing physician or other supplier’’
within the following 12 months (73 FR
405). We proposed the clarification and
other revisions in the CY 2009 PFS
proposed rule in order to introduce the
possible changes under consideration.
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The revisions being finalized in this
regulation stem from that proposal and
we believe that sufficient time has been
given for consideration of and response
to the anti-markup revisions.
Irrespective of whether ‘‘pod lab’’
arrangements otherwise would continue
to exist or proliferate, we believe that
the anti-markup provisions are needed
in order to address potential program
and patient abuse through the ordering
of unnecessary diagnostic tests.
Although several commenters made
mention of MIPPA and the impact that
it may have, we are not swayed by these
arguments. MIPPA is a separate
authority with a different focus than
that of the anti-markup provisions. If, in
the future, the anti-markup provisions
are impacted through our
implementation of MIPPA, we will
address this in subsequent rulemaking.
j. Miscellaneous
Comment: One commenter, a
professional association of pathologists,
suggested an exception from the antimarkup provisions for single-specialty
pathology physician groups and
independent laboratories. The
commenter suggested that such entities
be defined as those in which all
physicians within the group are
pathologists and for which 75 percent of
all CPT codes billed by the entity are
pathology and laboratory CPT codes.
According to the commenter, such an
exception would ‘‘clarify’’ that
dedicated pathology groups and
independent laboratories are not subject
to the anti-markup provisions for certain
purchased diagnostic tests and
interpretations or the ordering of special
stains to perform better the tests ordered
by outside, independent physicians.
The commenter asserted that its
proposed exception would be consistent
with the physician self-referral’s
exclusion from the definition of
‘‘referral’’ for services ordered by
pathologists (and radiologists and
radiation oncologists) pursuant to a
consultation with another physician.
According to the commenter, the
exclusion from the definition of
‘‘referral’’ reflects the Congress’s
recognition that services ordered by
such physicians pursuant to a
consultation with another physician do
not pose the same risk of abuse that
physician self-referral generally poses.
The commenter also suggested an
alternative to its proposed exception, for
independent laboratories for which at
least 75 percent of the diagnostic tests
have been ordered by physicians
outside the laboratory. A second
commenter representing pathologists
also suggested an exception for
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pathology practices (which it would
define as any entity for which at least
75 percent of all CPT codes billed by the
entity are pathology and laboratory
codes). The commenter also cited the
exclusion from the definition of
‘‘referral’’ in the physician self-referral
rules for services ordered by
pathologists pursuant to a consultation,
and asserted that there should not be a
self-referral or mark-up concern when
pathology groups order special stains or
other tests. A third commenter stated
that the ‘‘rapid rise’’ in special stains in
the last eight years is not a result of inoffice pathology services or TC/PC
arrangements, but rather is a result of
the failure of national, regional, and
hospital-based pathology laboratories to
follow standard protocol for tissue
biopsies. The commenter contended
that over-utilization of anatomic
pathology testing can be managed by
imposing tighter controls on such
laboratory-based pathologists with
respect to what stains they order and the
reasons for ordering them.
Response: We are not establishing an
exception that would be applicable to
pathology practices or independent
laboratories, to the anti-markup
provisions. We note that we did not
propose such an exception and, thus,
question whether we would have the
authority to provide for such an
exception in this final rule. Moreover,
we are not convinced of the need for or
wisdom of such an exception. We
believe that the same potential that
exists for the overutilization of
diagnostic tests ordered by singlespecialty physician groups and other
suppliers, due to the profit motive, also
exists for the ordering of special stains
or other tests by pathology groups or
independent laboratories.
Comment: An association that
represents physician group practices
suggested that we establish a multispecialty medical group ‘‘carve out’’ for
‘‘merit,’’ that is, an exemption from the
anti-markup provisions based on
delivery of high-quality health care
services in the multi-specialty/
organized system of care model.
According to the commenter, the
potential and risk for inappropriate
actions is outweighed by the attributes
and meritorious actions of multispecialty groups. The commenter noted
that, in section 131 of MIPPA, the
Congress recognized the coordinated
approach to patient care that multispecialty medical groups provide.
A different commenter requested that
multi-specialty group practices not be
permitted to use the employment or
independent contractor arrangements to
bring pathology services in-house and
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then claim that a referral is exempt from
the physician self-referral prohibition
because it meets the requirements of the
in-office ancillary services exception or
some other exception. The commenter
stated that pathology is a separate
physician specialty and the provision of
these services is not ancillary to the
provision of urology or gastroenterology.
According to the commenter, pathology
services provided in-office do not serve
the patient’s convenience or increase
access to these services as they are too
time consuming and complex to
perform, as the patient has always left
the doctor’s office by the time the
pathology examination is complete and
the report issued. The commenter
argued that not allowing pathology
services to be protected by the in-office
ancillary services exception would be
consistent with the physician selfreferral law and would eliminate the
incentive for overutilization that
currently exists.
Response: For the same reasons
expressed in the response to the
previous comment, we are not
establishing an exception to the antimarkup payment limitation, for multispecialty groups. We also note that
because we have adopted the first
proposed alternative with modification,
whereby the anti-markup provisions
will not apply to TCs and PCs
supervised or performed by a physician
who performs ‘‘substantially all’’ of his
or her professional services for the
billing physician or other supplier, ‘‘hub
and spoke’’ arrangements of multispecialty groups should not have
significant difficulty avoiding
application of the anti-markup
provisions. We understand the
commenter’s concerns about the use of
the in-office ancillary services exception
and may propose rulemaking on this
issue in the future.
Comment: A commenter stated that
dermatologic surgeons who order and
read their own diagnostic tests should
not be penalized for doing so by the
addition of new and overly cumbersome
regulations that the commenter argued
are inconsistent with the existing
physician self-referral law. According to
the commenter, a dermatopathologist
has the expertise to diagnose and
monitor diseases of the skin, which
entails the examination and
interpretation of specially prepared
tissue sections, cellular scrapings, and
smears of skin lesions by means of
routine and special (electron and
fluorescent) microscopes. The
commenter was also concerned that
patient access to care in rural and
underserved areas will be affected. The
commenter urged that practices that
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order and interpret their own diagnostic
tests in these areas should have the
same ability to recoup the costs of
equipment, space, and medical records
management for services performed
within their practices as those practices
that utilize an outside supplier for the
TCs or PCs of their tests.
Response: We are unclear as to what
the commenter is suggesting. We did not
propose to, and this final rule does not,
impose tighter billing restrictions on
TCs and PCs ordered by dermatologic
surgeons than for other specialties, and
does not impose tighter billing
restrictions for dermatologic surgeons
who perform TCs and PCs than it does
for those physician practices that
purchase TCs and PCs from an outside
supplier. We note that the commenter
did not provide an explanation of why
patient access to care in rural or
underserved areas would be affected by
our proposed revisions.
Comment: A letter writing campaign
expressed concern regarding the
proposals to the anti-markup provisions,
contending that it would limit the
ability of allergists to provide services
on a part-time basis with more than one
group and, in particular, would limit
access to allergy care (including allergy
diagnostic tests), to Medicare
beneficiaries in rural or underserved
areas. The commenters urged that our
proposals not be implemented.
Response: We have adopted the first
proposed alternative with modification,
whereby the anti-markup provisions
will not apply to TCs and PCs
supervised or performed by a physician
who performs ‘‘substantially all’’ (at
least 75 percent) of his or her
professional services for the billing
physician or other supplier, which
provides some flexibility for the
performing physician to work for more
than one billing physician or other
supplier. Moreover, this final rule
provides additional flexibility by
allowing arrangements that do not come
within the protection of the
‘‘substantially all’’ test to avoid the
application of the anti-markup payment
limitation by complying on a case-bycase basis with the existing site-ofservice approach (as clarified by this
final rule with comment period). We
believe that this addresses the
commenters’ concerns.
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O1. Physician Quality Reporting
Initiative (PQRI)
a. Program Background and Statutory
Authority
i. Division B of the Tax Relief and
Health Care Act of 2006—Medicare
Improvements and Extension Act of
2006 (MIEA–TRHCA) and the Medicare,
Medicaid, and SCHIP Extension Act of
2007 (MMSEA): Requirements for the
PQRI Program Prior to Enactment of the
Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA)
Section 101(b) of the MIEA–TRHCA
(Pub. L. 109–432) amended section 1848
of the Act by adding subsection (k).
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 described in
section 1848(k)(2) of the Act. Section
1848(k)(1) of the Act authorizes the
Secretary to specify the form and
manner for data 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.
The MMSEA required 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
and 2009.
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 National Quality Forum
(NQF) or the AQA (formerly the
Ambulatory Care Quality Alliance), that
include measures that have been
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69817
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 (e-prescribing) technology.
The Secretary must publish the final set
of measures in the Federal Register no
later than November 15, 2008, as
required by section 1848(k)(2)(B)(iii) of
the Act, as amended by the MMSEA.
Although section 101(c) of the MIEA–
TRHCA, as amended by the MMSEA,
authorized the Secretary to make
incentive payments for satisfactorily
reporting quality measures data on
covered professional services furnished
by eligible professionals during the
reporting period for 2007 and 2008,
neither MIEA–TRHCA nor MMSEA
authorized an incentive payment for
PQRI for 2009. Also unlike the 2007 or
2008 PQRI, neither the MIEA–TRHCA
nor the MMSEA defined a specific
reporting period for the 2009 PQRI.
ii. Extension of and Enhancements to
the PQRI Program Authorized by the
MIPPA
The MIPPA, which was enacted after
the publication of the CY 2009 PFS
proposed rule, included a number of
provisions that impact the 2009 PQRI.
Prior to enactment of the MIPPA, the
MIEA–TRHCA, as amended by the
MMSEA, was the authorizing legislation
for PQRI. The MIPPA codifies the PQRI
under sections 1848(k)(2) and 1848(m)
of the Act. First, the MIPPA makes the
PQRI a permanent program and
authorizes us to make incentive
payments for satisfactorily reporting
data on quality measures for covered
professional services furnished by
eligible professionals during the 2009
PQRI reporting period equal to 2.0
percent of the estimated total allowed
charges for all covered professional
services furnished during the reporting
period that are submitted no later than
2 months after the end of the reporting
period. In addition, the reporting period
for the 2009 PQRI is defined as the
entire year, or January 1, 2009 through
December 31, 2009. Therefore, for the
2009 PQRI, eligible professionals who
satisfactorily report data on quality
measures for covered professional
services furnished between January 1,
2009 through December 31, 2009 will
receive an incentive payment equal to
2.0 percent of the total estimated
allowed charges submitted by no later
than February 28, 2010 for all covered
professional services furnished between
January 1, 2009 and December 31, 2009.
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Beginning with the 2009 PQRI, the
MIPPA also amended the definition of
‘‘eligible professional’’ to include
qualified audiologists (as defined in
section 1861(11)(3)(B) of the Act). Thus,
for purposes of the 2009 PQRI, eligible
professionals include physicians, other
practitioners as described in section
1842(b)(18)(C) of the Act, physical and
occupational therapists, qualified
speech-language pathologists, and
qualified audiologists.
In addition, section 1848(k)(2)(D) of
the Act, as added by the MIPPA,
requires that for each 2009 PQRI quality
measure, ‘‘the Secretary shall ensure
that eligible professionals have the
opportunity to provide input during the
development, endorsement, or selection
of measures applicable to services they
furnish.’’
Section 1848(m)(3)(A) of the Act, as
amended and redesignated by the
MIPPA, also requires that for years after
2008, the PQRI quality measures shall
not include e-prescribing quality
measures. Even with the removal of the
e-prescribing measure, we continue to
meet the requirements under section
1848(k)(2)(B)(ii) of the Act to include
the use of structural measures.
Section 131(b)(6) of the MIPPA also
specifies that none of the amendments
to the Social Security Act resulting from
the MIPPA will impact the operation of
the PQRI for 2007 or 2008. Additional
information regarding the MIPPA
provisions can be found in section III of
this final rule with comment period.
iii. General Program Comments and
Responses
In the CY 2009 PFS proposed rule (73
FR 38558 through 38559), we provided
a longer summary of the history of the
PQRI and a more detailed discussion of
the pertinent MIEA–TRHCA and
MMSEA requirements than is provided
above in this section. We proposed to
define the 2009 PQRI reporting period
to be the entire CY 2009, but also
proposed alternative reporting periods
and alternative criteria for satisfactorily
reporting quality measures data for
measures groups and registry-based
reporting as required by the MMSEA (73
FR 38559 through 38564). The CY 2009
PFS proposed rule (73 FR 38564
through 38565) also included proposed
reporting options and reporting periods
for satisfactorily reporting quality
measures data extracted from EHRs.
To satisfy section 1848(k)(2)(B) of the
Act, as amended by the MMSEA, we
published 175 proposed 2009 PQRI
quality measures in the CY 2009 PFS
proposed rule (73 FR 38565 through
38572). We also proposed 9 measures
groups for the 2009 PQRI on which
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eligible professionals may report (73 FR
38572 through 38574) and described
potential uses of the PQRI information
(73 FR 38574 through 38575).
In the CY 2009 PFS proposed rule (73
FR 38558 through 38575), we solicited
comments on the following areas:
• Implications of including or
excluding any given measure from the
set of proposed 2009 quality measures.
• The new measures groups proposed
for 2009 including suggestions for other
measures groups based on individual
measures included in the proposed 2009
PQRI measure set.
• 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 measure set given that
there is no specific authorization for an
incentive payment for the 2009 PQRI
and beyond.
• Various issues that we identified in
the proposed rule to help us determine
the most appropriate uses of PQRI data.
We received 161 comments from the
public on the CY 2009 PFS proposed
rule related to the PQRI. In this section
of the final rule with comment period,
we first summarize the comments about
the PQRI program in general and our
responses to those comments
immediately below. The remaining
comments received and our responses to
those comments are discussed under the
relevant topic areas of this section of the
final rule with comment period.
Comment: Several comments
commended CMS and the PQRI program
for providing more flexibility and were
generally supportive of the program
including the proposed addition of
measures in the 2009 PQRI and the
continued development and
implementation of a variety of reporting
periods and reporting methodologies.
Response: We appreciate the
commenters’ positive feedback.
Comment: Several commenters
suggested that we conduct an
independent, formal evaluation of the
PQRI program’s processes and to
analyze and validate the data that has
been gathered to date. One of the major
reasons cited for needing an evaluation
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component was the fact that a relatively
small percentage of those eligible
professionals who participated in the
2007 PQRI actually received an
incentive payment. Other common
reasons cited include to assess the range
of specialties reporting information to
ensure that most eligible professionals
have the opportunity to participate, to
better understand why some eligible
professionals did not participate, and to
fully understand how improvements
affect participation rates prior to
expansion of the PQRI.
Response: We are continuing to
evaluate the results of the 2007 PQRI
and will evaluate the results of the 2008
PQRI as they become available as we
develop and implement strategies for
enhancing the PQRI in the future.
Comment: A number of commenters
also offered to assist us in improving
physician quality measure design and to
help us better understand the barriers to
and the stimuli for participating by
requesting to review the data files used
for calculating the 2007 and/or 2008
incentive payments.
Response: Information about
individuals that is retrieved by the
individuals’ names or other personal
identifiers is subject to the Privacy Act
of 1974 (that is, the Privacy Act),
Freedom of Information Act and other
Federal government rules and
regulations. As such, the information
cannot be released without the
individual’s written consent, unless the
Privacy Act permits release. See 5
U.S.C. 552a(b).
We employ strict security measures to
appropriately safeguard individual
privacy and seek to ensure that files
containing physician and/or beneficiary
identifiers are used only when
necessary and in accordance with
disclosure provisions of the Privacy Act.
The Privacy Act, as well as the notice
that is published in the Federal Register
for each CMS System of Records (SOR),
provide the permitted disclosures of
individually identifiable information
and explain the procedures that need to
be followed to safeguard the
information. The notices that describe
each CMS SOR can be found on the
CMS Web site at https://
www.cms.hhs.gov/
PrivacyActSystemofRecords/SR/
list.asp#TopOfPage.
All research requests for individually
identifiable data must be submitted to
the Research Data Assistance Center
(ResDAC) for initial review. More
information on the policies and
procedures for data requests for data
that are protected by the Privacy Act can
be found on the CMS Web site at
https://www.cms.hhs.gov/
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PrivProtectedData/
01_Overview.asp#TopOfPage.
Comment: Many commenters
recommended we redesign the PQRI
section of the CMS Web site, including
suggestions to provide an updated
listing of measures under formal
consideration by the various measure
developers, as well as to provide more
detailed information about the PQRI
measures.
Response: We concur with
commenters’ suggestions to redesign the
PQRI section of the CMS Web site. We
are currently working to make the Web
site more user-friendly and will
consider the commenters’ suggestions.
Comment: A few commenters
suggested we establish a multistakeholder advisory council or that we
actively engage more stakeholders, such
as consumers and hospitals. Active
engagement of stakeholders could be
used for a variety of purposes, such as
to help understand why some eligible
professionals may not have participated;
to engage and obtain feedback and
observations from those who will be
measured as well as those who
successfully participated; to ensure that
the PQRI measures provide clinicallysignificant information while being
structured in the least administrativelyburdensome manner possible; or to
advise us as we proceed with making
information derived from the PQRI
publicly available.
Response: We plan to continue our
dialogue with the stakeholder
community and will consider their and
PQRI participants’ input as we continue
to evaluate the results from the PQRI
and to develop and implement strategies
for enhancing the PQRI in the future.
Comment: One commenter
recommended different incentives that
we could employ to increase
participation, such as reducing eligible
professionals’ costs for collecting
Medicare payments.
Response: We are bound by statute
with respect to the types of incentives
that we can provide to eligible
professionals, how those incentives are
calculated, and the amount of the
incentive. The only incentives we are
authorized to provide eligible
professionals are an incentive for
eligible professionals who satisfactorily
report quality measures data through the
PQRI as discussed below and the new
incentive that we are implementing in
2009 for eligible professionals who are
successful electronic prescribers as
discussed in section II.O2. below.
Comment: Other specific suggestions
for improving the PQRI provided by
commenters include renaming the PQRI
the ‘‘Provider’’ or ‘‘Practitioner’’ Quality
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Reporting Initiative to acknowledge
potential participation of all types of
Medicare providers; separating the
quality reporting from the billing
process by removing the requirement
that ‘‘G’’ codes are reported on the same
claim as the denominator service;
developing guidelines on which
measures are appropriate for reporting
by different medical specialties;
designing reporting options in a manner
that would allow smaller providers to
more easily participate; considering
assigning all measures to clinical area
groups; providing an appeal process for
eligible professionals who participate
but are not deemed to be successful; and
ensuring greater transparency in all
aspects of the program including, but
not limited to, in the measure selection
process, in the provision of feedback,
and in the implementation of the
pertinent MIPPA provisions.
Response: We appreciate and value
the constructive feedback that we have
received from the wide variety of
commenters who have provided insights
and information and partnered with us
to disseminate information about PQRI.
As reflected in the variety of reporting
options that we are making available for
the 2009 PQRI and the expansion of
measures groups, it is our desire to
allow as many eligible professionals to
participate with as little additional
burden as possible. To the extent that
we find it practical, feasible, and
appropriate to implement the
commenters’ suggestions, we would do
so via notice and comment rulemaking
for future years’ PQRI.
With respect to the commenters’
suggestion to provide an appeals
process for eligible professionals who
participate but are not deemed to be
successful, we note that section
1848(m)(5)(e) of the Act, as amended by
MIPPA, provides that with respect to
the PQRI there shall be no
administrative or judicial review under
sections 1869 or 1879 of the Act, or
otherwise of (1) the determination of
measures applicable to services
furnished by eligible professionals; (2)
the determination of satisfactory
reporting; and (3) the determination of
any incentive payment. Therefore, we
have no authority to establish an
appeals process for the subject of
eligible professionals ‘‘not deemed to be
successful’’ which we read to fall within
the determination of satisfactory
reporting.
Comment: We received numerous
comments providing general
recommendations for enhancing the
Medicare program, such as suggestions
to transition the PQRI from a pay-forreporting program to a pay-for-
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69819
performance program as quickly as
possible; addressing problems of
underuse, overuse, and misuse of
services; assuring that all Americans
receive the right care by reducing health
care disparities and encouraging that
quality care be provided to at-risk
populations; encouraging care
coordination and support for the
integration and delivery of services
across providers and across care
settings; and providing payment that
supports the re-engineering of care, such
as providing payment for e-visits and
efficiency-enhancing forms of
telemedicine. One commenter expressed
a desire to see the development of a
quality reporting mechanism similar to
the PQRI that is applicable to a pediatric
population and Medicaid.
Response: While we appreciate these
suggestions for enhancing the Medicare
and Medicaid programs mentioned, we
note that those programs are beyond the
scope of this section of the final rule
with comment period. This section of
the final rule with comment period is
limited to the 2009 PQRI.
Comment: Many commenters also
commented on the MIPPA provisions
that were not directly related to the
PQRI. For example, we received many
comments related to the plan for
transitioning to a value-based
purchasing program for physicians’
services that we are required to submit
to the Congress by May 1, 2010 under
the MIPPA.
Response: While we appreciate the
commenters’ input for implementing the
MIPPA provisions, we note that MIPPA
provisions that are not directly related
to the PQRI program are beyond the
scope of this section of the final rule
with comment period. This section of
the final rule with comment period is
limited to the 2009 PQRI.
Comment: Several commenters
expressed confusion about participation
requirements and recommended that we
implement an aggressive education and
outreach campaign on how to
successfully participate, to help eligible
professionals who did not receive a
bonus understand why, and that
provides participating eligible
professionals with confidential interim
and final feedback and compliance
reports.
Response: We agree that with
increased flexibility comes more
potential for confusion about
participation requirements. Section
1848(k)(6) of the Act requires the
Secretary to provide for education and
outreach to eligible professionals on the
operation of the PQRI.
To minimize any potential confusion,
we have hosted monthly national
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provider calls on the PQRI in which our
PQRI subject matter experts are
available to answer questions on the
PQRI. We have also provided guidance
on specific topics on these calls, such as
accessing the 2007 PQRI feedback
reports, how the 2007 incentive
payments were calculated, and the
various 2008 reporting options.
In addition to the national provider
calls, we have worked with various
medical specialty societies, such as the
American Academy of Family
Physicians, the American College of
Physicians, American Academy of
Ophthalmology, American Optometric
Association, and the American
Gastroenterological Association Institute
to host Special Open Door Forums to
educate their membership on the PQRI.
We anticipate continuing these
education and outreach activities as we
implement the 2009 PQRI.
Information about these CMSsponsored calls, including information
about upcoming calls, can be found on
the PQRI section of the CMS Web site
at https://www.cms.hhs.gov/PQRI. The
Web site itself also serves as a useful
resource for obtaining the most up to
date information on the PQRI. For
example, the PQRI Tool Kit found on
the PQRI section of the CMS Web site
at https://www.cms.hhs.gov/PQRI/
31_PQRIToolKit.asp#TopOfPage
contains valuable resources to help
eligible professionals in the successful
integration of PQRI into their practices.
We encourage eligible professionals to
visit this Web site and to review the
frequently asked questions found on
this Web site.
Comment: Many commenters stated
they were pleased the Congress
extended PQRI and authorized a 2.0
percent incentive payment for 2009, but
others noted that the incentive payment
was not enough to outweigh the burden
of participating or noted concern about
the number of ‘‘quality and efficiency’’
measures imposed on physicians
without evidence of improved health
outcomes, health status, and reduced
system costs. One commenter
recommended that we base the
incentive payment on RVUs rather than
the amount billed to Medicare.
Response: We do not have the
authority to change the basis for
calculation of the incentive payment.
Section 1848(m)(1) of the Act, as
redesignated and amended by the
MIPPA, authorizes us to make incentive
payments for satisfactorily reporting
data on quality measures for covered
professional services furnished by
eligible professionals during the 2009
PQRI reporting period equal to 2.0
percent of the estimated total allowed
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charges for all covered professional
services furnished during the reporting
period that are submitted no later than
2 months after the end of the reporting
period. However, we are committed to
exploring and supporting practical,
effective mechanisms for quality-of-care
data submission that promote efficiency
by streamlining participants’ and our
data collection and handling. As such,
and as described below in this section
of the final rule with comment period,
we have developed and are
implementing options for registry-based
submission of quality measures data and
plan to implement options for EHRbased submission of quality measures
data after some additional testing.
In addition, we have increased the
number of measures groups and
individual PQRI quality measures
available for the 2009 PQRI in an effort
to expand opportunities for eligible
professionals to participate in PQRI.
Comment: We received many
comments urging us to ensure that all
eligible professionals have meaningful
opportunities to participate in the PQRI.
Some commenters were specifically
concerned that funding for the Quality
Insights of Pennsylvania (QIP) project to
develop nonphysician quality measures
has ended and hoped that CMS will
continue to extend funding in the future
for the development and
implementation of quality measures for
nonphysicians as well as to move
measures already developed by the QIP
through the NQF endorsement and/or
AQA approval process.
Several commenters were also
concerned that therapists who work in
certain outpatient settings (for example,
acute care hospitals, skilled nursing
facilities, comprehensive outpatient
rehabilitation facilities, or rehabilitation
agencies) are unable to participate in
PQRI since they do not use the 1500 or
837–P claim form and instead submit
claims on the UB–04 or 837–I form
where there is no place to report the
individual National Provider Identifier
(NPI) of the eligible professional
furnishing the service. The commenters
recommended registry-based
alternatives for PQRI participation.
A few commenters noted that
pathologists who bill via independent
laboratories are also not able to
participate in the PQRI because we are
not yet able to capture this billing
situation.
Response: We agree with the goal of
providing as many eligible professionals
the opportunity to participate in the
PQRI as is practical and feasible. As we
stated in the CY 2009 PFS proposed rule
(73 FR 36566), one of the considerations
we employed in the selection of
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measures for the 2009 PQRI is to select
measures that increase the scope of
applicability of measures to services
furnished to Medicare beneficiaries and
expand opportunities for eligible
professionals to participate in PQRI. We
seek to increase the circumstances
where eligible professionals have at
least three measures applicable to their
practice.
For the 2008 PQRI, we supported, via
contract with QIP, the development of
structural measures and measures
applicable to a broad cross-section of
PQRI eligible professionals, including
some NPPs who had few or no measures
available in the 2007 PQRI. We
prioritized development of these
measures available or otherwise in
development and on a need to address
as broad a cross-section of eligible
professions or specialties as possible
within the limited volume of measures
for which we could support
development in time for inclusion in the
2008 PQRI. As the contracted measure
developer, QIP was responsible for
supporting the measures through the
AQA adoption process. CMS funded a
project with the NQF which reviewed
the measures for endorsement.
We plan to continue working to fill
gaps in available consensus endorsed or
adopted measures consistent with
available time and resources. However,
we largely depend on and encourage the
development of measures by
professional organizations and other
measure developers. Ideally, in the
future, there will be a sufficient number
of clinician-level quality measures that
meet the statutory requirements that
CMS would be able to just select PQRI
measures from these existing measures
rather than needing to fund the
development of additional clinicianlevel quality measures.
Regarding the concerns cited by
therapists unable to participate in PQRI
since they do not use the 1500 or 837–
P claim form, we note as we did in the
CY 2008 PFS final rule with comment
period (73 FR 66337) that our analysis
of claims-based alternatives to enable
participation determined that extensive
modifications to the claims processing
systems of CMS and providers would be
required. Such modifications would
represent a material administrative
burden to us and providers and/or
modifications to the industry standard
claims formats, which would require
substantial time to effect via established
processes and structures that we do not
maintain or control.
Our analysis of the two registry-based
alternatives suggested by the
commenters indicate that it would be
possible for therapists in this situation
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to participate in a registry because there
are registries ‘‘qualified’’ to participate
in our 2008 PQRI program that intended
to report all of the PQRI measures and
that are open to all eligible professionals
who would like to participate with
them. However, it would not be possible
to calculate an incentive payment for
the therapists’ participation since our
claims processing systems do not allow
us to attribute services furnished by
therapists who bill through fiscal
intermediaries to an individual eligible
professional to calculate the incentive
amount. As required by section
1848(1)(A)(ii) of the Act, as redesignated
and added by the MIPPA, the 2009 PQRI
incentive must be calculated based on
each eligible professional’s allowed
charges for covered professional
services that are based on or paid under
the Medicare PFS. Although we are in
the process of evaluating the impact of
making the changes to the fiscal
intermediary claims processing systems
needed to be able to accept the PQRI
quality data codes and attribute them to
an eligible professional, it is unknown
at this time whether these changes can
be made without undue burden to our
systems or what the timeline for
potential implementation would be.
Regarding the concern that
pathologists who bill through
independent laboratories are unable to
participate in the PQRI, we note that
only eligible professionals as defined in
section 1848(k)(3)(B) of the Act are
eligible to participate in PQRI. As
discussed in section II.O1.a.ii. above,
‘‘eligible professional’’ is defined to
include physicians, other practitioners
as described in section 1842(b)(18)(C) of
the Act, physical and occupational
therapists, qualified speech-language
pathologists, and qualified audiologists
for the purposes of the 2009 PQRI. As
noted in the comment, independent
laboratories are suppliers and are
therefore not eligible to participate in
PQRI. Pathologists who bill directly to
Medicare, however, are eligible to
participate in PQRI.
Comment: Several commenters noted
the mechanism for viewing the feedback
reports was too cumbersome and were
concerned about the lack of timely
feedback (both in terms of when the
feedback reports are received and when
incentive payments are received).
Several commenters requested that more
detailed information be provided in the
feedback reports so that eligible
professionals can reconcile CMS’ data
with their own claims information to
ensure that codes were submitted
accurately, captured by the Medicare
Administrative Contractor (MAC),
transferred to the PQRI data system, and
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result in meaningful data that
corresponds to the eligible
professional’s own experience.
Response: Although, as discussed in
sections II.SG.6. and III. of this final rule
with comment period, section 1848(n)
of the Act, as added by the MIPPA,
requires the Secretary to establish a
Physician Feedback Program to provide
confidential reports to physicians (and,
if determined appropriate by the
Secretary, groups of physicians) that
measure the resources involved in
furnishing care to Medicare Part B
patients, we are not statutorily required
to provide participants with feedback
reports on the quality measures data
submitted for the PQRI and are not
committing to provide feedback reports
for claims-based submission of quality
measures data for the 2009 PQRI. For
registry-based reporting in 2009, we
would rely on the participating
registries to provide feedback to
participating eligible professionals.
We do, however, understand the
value of receiving meaningful feedback
reports and, to the extent that we
continue to provide PQRI participants
with feedback reports for claims-based
submission of quality measures data for
the 2009 PQRI, we will consider such
concerns as part of our ongoing dialogue
with stakeholders in order to
collaboratively identify ways to enhance
the program’s value to its participants
and to the Medicare program. We note
though that information on all aspects of
care billed to Medicare, including
quality data codes, is found on the
remittance advice that eligible
professionals receive. We urge PQRI
participants to review the information
received on the remittance advice along
with their own records (such as their
own claims information) to ensure that
PQRI quality information is being
accurately submitted and captured on
claims. We also note that 2007 was the
first broad scale implementation of
quality data submission through the
claims process. We are aware that
practice management systems have the
capability to analyze information
received on the remittance advice. We
anticipate that practice management
systems may be adapted in the future for
analysis of quality data code
submission, as well. Such systems could
provide contemporaneous feedback and
analysis for physicians.
With respect to the timeframe when
incentive payments are received, it is
unlikely that we will be able to issue
incentive payments for participation in
PQRI for a particular year much sooner
than the middle of the following year
because of the way in which the
incentive payments are calculated. The
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incentive payments are calculated based
on the total estimated allowed charges
for the reporting period. As required by
section 1848(m)(1)(A)(ii) of the Act, as
redesignated and added by the MIPPA,
we must wait until 2 months after the
end of the reporting period to allow
eligible professionals to submit claims
for covered professional services
furnished during the reporting period.
Comment: The MIPPA requires that
by January 1, 2010, the Secretary shall
establish and have in place a process
under which eligible professionals in a
group practice shall be treated as
satisfactorily submitting data on quality
measures for the PQRI. A few
commenters welcomed this option and
offered to assist CMS in defining ‘‘group
practice.’’ Another commenter noted
that it would be more cost-effective for
multi-specialty group practices to
participate under this new option.
Response: We welcome the
commenters’ interest in our plans for
implementing future enhancements to
the PQRI based on the MIPPA. However,
we note that the scope of this section of
the final rule is limited to the 2009
PQRI. Our plans for future years’ PQRI,
including our plans for implementing
the MIPPA provisions that affect future
program years, will be discussed in
future notice and comment rulemaking.
Thus, commenters can expect to see a
discussion of our plans for
implementing the physician group
practice option for the 2010 PQRI in the
CY 2010 PFS proposed rule next year.
b. Satisfactory Reporting Criteria and
Reporting Periods—Reporting Options
in the 2009 PQRI
In the CY 2009 PFS proposed rule (73
FR 38559), we proposed to define the
reporting period for the 2009 PQRI as
the entire year (January 1, 2009–
December 31, 2009) and proposed two
alternative reporting periods for
reporting measures groups and for
registry-based reporting: (1) January 1,
2009 through December 31, 2009; and
(2) July 1, 2009 through December 31,
2009.
As discussed in section III. of this
final rule with comment period, the
MIPPA defines the reporting period for
the 2009 PQRI to be the entire year.
Therefore, for the 2009 PQRI the
reporting period will be January 1, 2009
through December 31, 2009. We are
retaining the two alternative reporting
periods, which were unaffected by
MIPPA, for reporting measures groups
and registry-based reporting (that is,
January 1, 2009 through December 31,
2009 and July 1, 2009 through December
31, 2009) as proposed. These reporting
periods result in several reporting
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options available to eligible
professionals that vary by the reporting
mechanism selected. The reporting
mechanisms and criteria for
satisfactorily reporting quality measures
data for the 2009 PQRI are described in
the following section.
i. Claims-Based Submission of Data for
Reporting Individual Measures
Under section 1848(m)(3) of the Act,
as redesignated and added by the
MIPPA, the criteria for satisfactorily
submitting data on individual quality
measures through claims-based
submission 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, the
professional may meet the criteria by
reporting on all applicable measures
(that is, one to two measures) for at least
80 percent of the cases where the
measures are reportable. It is assumed
that if an eligible professional submits
quality data codes for a particular
measure, the measure applies to the
eligible professional. These criteria were
proposed for the January 1, 2009
through December 31, 2009 reporting
period.
We received a few comments on the
proposed reporting period and criteria
for satisfactorily submitting quality data
through claims for reporting individual
measures, as discussed below.
Comment: A few commenters
encouraged CMS to establish alternative
reporting periods for claims-based
submission of individual quality
measures. One commenter specifically
requested us to extend the alternative
reporting period of July 1, 2009 through
December 31, 2009 to eligible
professionals participating in PQRI
through claims-based reporting of
individual quality measures. The
commenter stated that measures groups
and/or registries are not always an
option for eligible professionals.
Response: We appreciate the
commenter’s suggestions, which are
intended to enhance the claims-based
reporting of individual measures by
providing greater flexibility. However,
as discussed above and in section III. of
this final rule with comment period, the
MIPPA defines the reporting period for
the 2009 PQRI to be the entire year and,
as discussed in section II.O1.a.i. above,
the MMSEA authorizes the Secretary to
establish alternative reporting periods
for registry-based reporting and for
reporting on measures groups only. We
note, however, that for years after 2009,
the MIPPA authorizes the Secretary to
revise the reporting period for claimsbased submission of quality measures
data if it is determined that such
revision is appropriate, produces valid
results on measures reported, and is
consistent with the goals of maximizing
scientific validity and reducing
administrative burden.
Additionally, there are registries
currently participating in the 2008 PQRI
that report or are able to report all of the
PQRI quality measures. Alternative
reporting periods are available for
registry-based submission of quality
measures data, which enables all
eligible professionals who wish to
participate in PQRI to do so through a
registry. For the 2008 PQRI, there are 32
registries ‘‘qualified’’ to submit quality
measure results and numerator and
denominator data on quality measures
on behalf of eligible professionals.
Based on our review of this comment,
we are retaining the reporting option for
claims-based submission of data on
individual quality measures as
summarized in Table 11. That is an
eligible professional can 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 11—FINAL 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 less
than 3 apply to the eligible professional, for 80 percent of applicable Medicare Part B FFS patients of
each eligible professional.
ii. Satisfactory Reporting of Data on
Quality Measures and Reporting Periods
for Measures Groups, Through ClaimsBased Reporting and Registry-Based
Reporting
As described in the CY 2009 PFS
proposed rule, section 101(c)(5)(F) of
the MIEA–TRHCA, as added by the
MMSEA and redesignated by the MIPPA
as section 1848(m)(5)(F) of the Act,
requires that the Secretary establish
alternative reporting periods and
alternative criteria for satisfactorily
reporting groups of measures. In
establishing these alternatives, we have
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
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Reporting period
the measures within a particular
measures group.
For the 2009 PQRI, we proposed to
expand the available measures groups to
a total of nine measures groups. We
proposed to carry forward three of the
four 2008 measures groups for the 2009
PQRI: (1) Diabetes Mellitus; (2) Chronic
Kidney Disease (CKD); and (3)
Preventive Care. In addition, we
proposed to add six new measures
groups for the 2009 PQRI:
(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);
(5) Perioperative Care; and
(6) Back Pain.
We proposed to allow measures
groups to be reported through claims-
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January 1, 2009–December 31, 2009.
based or registry-based submission for
the 2009 PQRI.
We proposed that the form and
manner of quality data submission for
2009 measures groups would 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.
The final 2009 PQRI measures groups
and the measures selected for inclusion
in each of the 2009 measures groups are
listed in section II.O1.d.v. of this final
rule with comment period.
We proposed (73 FR 38561)
establishing three options for
satisfactorily reporting measures groups
using claims-based reporting and three
options for satisfactorily reporting
measures groups using registry-based
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submission for the 2009 PQRI. We
proposed two basic criteria for
satisfactory reporting of measures
groups for both claims-based
submission and registry-based
submission. For claims-based reporting,
the two criteria were:
(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 registrybased submission, the two criteria were:
(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).
We proposed that the 30 consecutive
patients reporting criteria apply only to
the entire year (January 1, 2009 through
December 31, 2009) reporting period,
but would apply to both claims-based
submission and registry-based
submission mechanisms.
We proposed that the alternative
criteria for measures groups based on
reporting on 80 percent of patients for
which one measures group would 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 period
(with a minimum of 15 patients). These
alternative criteria would also be
applicable for either claims-based or
registry-based reporting of measures
groups.
In the CY 2009 PFS proposed rule (73
FR 38561), we requested comments on
the 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 minimum
sample under these criteria during the
full-year 2009 reporting period.
We received numerous comments on
the proposed alternative reporting
periods and alternative criteria for
satisfactory reporting of data on
measures groups, including the
proposed use of the consecutive patient
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reporting criteria and proposed use of
30 consecutive patients. These
comments are summarized and
addressed below.
Comment: Some commenters
suggested that we establish general rules
governing measures groups reporting
involving multiple providers from
separate entities.
Response: To qualify for the PQRI
incentive, each individual professional
must separately qualify, based on the
criteria for reporting measures groups
and the services rendered by the
individual professional. The reporting
by other professionals and the
establishment of rules relating to the
reporting of multiple providers from
separate entities is not germane to
satisfactory reporting at the individual
level. Each individual professional must
qualify based on that individual’s
satisfactory reporting. No later than
December 31, 2008, we will post the
detailed specifications and specific
instructions for reporting measures
groups at https://www.cms.hhs.gov/pqri.
This document is intended to promote
an understanding of how to implement
and facilitate satisfactory reporting of
quality measures results and numerator
and denominator data by individual
eligible professionals who wish to
participate in PQRI via measures group
reporting.
Comment: Many commenters strongly
supported the continued use of
measures groups, the expansion of
measures groups, registry-based
submissions of measures groups, and
alternative reporting periods for
measures groups.
Response: We are pleased that many
commenters are supportive of the
measures groups concept, the expansion
of measures groups, registry-based
submissions for measures groups, and
alternative reporting periods. These
options provide for program efficiency,
flexibility and opportunities for
physicians and other eligible
professionals to more broadly
demonstrate their clinical performance
for particular services and provide a
better basis for comparison among
professionals. We plan to continue a
dialogue with stakeholders to discuss
opportunities for program efficiency and
flexibility.
Comment: Many commenters were in
support of the 30 consecutive patient
reporting option for the full year 2009
reporting period. One commenter noted
that a sample consisting of consecutive
patients would result in a nonrandom
sample of patients. Another commenter
requested clarification on which 30
patients should be included in the
consecutive patient sample.
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Response: We are pleased that many
commenters found the 30 consecutive
patient reporting option to be useful and
were supportive of this option. We agree
that a sample of 30 consecutive patients
would be a nonrandom sample, but it is
our intention to allow physicians and
other eligible professionals greater
flexibility and opportunities to
participate in PQRI. In addition,
requiring consecutive patients would
prevent eligible professionals from
being able to selectively report cases to
enhance their performance rates.
While we do not have the results of
the 2008 PQRI reporting, we believe that
a minimum sample size of 30
consecutive patients is sufficient to
calculate comparable performance rates
across eligible professionals furnishing
comparable services. Patient sample
sizes of 30 are commonly considered to
be a reasonable minimum threshold for
being able to reliably report health care
performance measurement results.
Results from our Better Quality
Information for Medicare Beneficiaries
(BQI) pilot project indicate that
minimum patient sample sizes of
between 30 through 50 patients per
physician are needed to make reliable
distinctions between physicians’
performance. (Delmarva Foundation for
Medical Care. Enhancing Physician
Quality Performance Measurement and
Reporting Through Data Aggregation:
The BQI Project. October 2008.) We
expect additional experience with PQRI
reporting to clarify optimal sample sizes
and reporting criteria for use in future
reporting periods. We will continually
evaluate our policies on sampling and
notify the public through future notice
and comment rulemaking if we make
substantive changes. As we evaluate our
policies, we plan to continue a dialogue
with stakeholders to discuss
opportunities for program efficiency and
flexibility.
As described in Table 12, for claimsbased reporting of measures groups,
eligible professionals wishing to report
data on measures groups using the
consecutive patient criteria should
include only Medicare Part B FFS
patients in the consecutive patient
sample. For registry-based reporting of
measures groups, eligible professionals
wishing to report data on measures
groups using the consecutive patient
criteria may include some non-Medicare
FFS patients. However, there must be
more than one Medicare Part B FFS
patient included in this patient sample
as well.
Comment: We received a large volume
of comments in support of
discontinuing the 15 consecutive
patients for a 6-month reporting period
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(that is, July 1 through December 31).
We also received a few comments
suggesting we continue the option of
allowing eligible professionals to report
data on 15 consecutive patients for a 6month reporting period.
Response: Unlike in the 2008 PQRI,
we will not include a reporting option
for 15 consecutive patients for a 6month 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.
Comment: We received comments
recommending that, regardless of the
reporting mechanism selected, the
criteria for satisfactorily reporting data
on measures groups and individual
quality measures be expanded to
include the reporting data on measures
groups and/or individual quality
measures for 100 percent of patients for
whom the measures group and/or
individual quality measures are
applicable. One commenter thought that
we should specifically require eligible
professionals who report via registries to
report on 100 percent of their eligible
patients. Another commenter suggested
that for the option to report on 80
percent of patients for registry-based
reporting of measures groups we accept
quality measures results and numerator
and denominator data on quality
measures on all patients, regardless of
payer, rather than quality measures
results and numerator and denominator
data on quality measures on Medicare
Part B FFS beneficiaries only. The
commenter, however, opposed requiring
a minimum number of Medicare FFS
patients be included in the data
submitted from the registry. Another
commenter thought that registry
reporting and claims-based reporting
requirements should be the same.
Response: While we would encourage
eligible professionals to report data on
measures groups and/or individual
quality measures for all patients who
qualify for a measure they are reporting
and eligible professionals are not
precluded from reporting data on
measures groups and/or individual
quality measures for 100 percent of their
eligible patients, satisfactory reporting
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was established by the MIEA–TRHCA to
include reporting in at least 80 percent
of the cases for which the respective
measure is reportable. Analysis of the 80
percent reporting threshold has
indicated it to be a sufficiently large
sample size to be representative of an
eligible professional’s patient
population. That is, 80 percent is a
sufficiently large reporting rate that the
performance rates calculated from the
80 percent sample are substantially the
same as the performance rates
calculated from 100 percent of
applicable cases. Although a 100
percent sample of cases for which
individual quality measure or measures
groups are applicable would eliminate
any sampling error, requiring 100
percent reporting of applicable cases
would cause eligible professionals to be
ineligible for an incentive payment
based on a failure to report data on a
single missed case that falls into the
quality measure’s denominator.
Additionally, the 80 percent reporting
criteria for individual quality measures
is statutorily required through 2009 for
individual quality measures reported
through claims. While the Secretary is
authorized to establish a different
reporting threshold for measures groups
and registry-based reporting, we believe
that it is necessary and desirable to
maintain consistency and to achieve a
balance amongst the reporting options
in order to promote a successful
program.
With respect to requiring a minimum
number of Medicare Part B FFS patients
in the sample for registry-based
reporting options for reporting on
measures groups for at least 80 percent
of applicable cases, our primary interest
is in improving the quality of care
Medicare beneficiaries receive. If we do
not specify a minimum number of
Medicare Part B FFS on which eligible
professionals should report, it is feasible
that an eligible professional could meet
the 80 percent threshold by treating just
one or two beneficiaries. Thus, for those
eligible professionals who treat few
Medicare beneficiaries, the sample size
would be too small to do any
meaningful analysis of the eligible
professional’s performance on that
particular measure even though the
sample consists of 80 percent of the
eligible professional’s Medicare
beneficiaries to whom the measure
applies.
Comment: One commenter suggested
that registries ‘‘facilitate quality
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measures reporting for measures groups
reporting regardless of the relationship
of the reporting provider to the
registry.’’ The commenter suggested that
we further clarify that in order to
become qualified to submit quality
measures results and numerator and
denominator data on quality measures
to the PQRI on behalf of eligible
professionals, a registry must assure a
mechanism by which multiple
providers who collectively report the
individual measures comprising a
measures group can do so and that there
are no barriers to the reporting of such
information by any provider regardless
of the provider’s relationship to the
registry.
Response: Registries provide an
alternative to claims-based reporting.
Regardless of the reporting mechanism
(that is, claims or registries), there is no
provision for reporting by multiple
professionals under the PQRI since each
individual eligible professional must
separately meet the criteria for
satisfactory reporting of PQRI quality
measures. Registries have no
responsibility to establish a relationship
with any particular professional. An
eligible professional who does not have
a relationship with a qualified registry
has the option of submitting data on
measures groups through claims or
establishing a relationship with a
qualified registry unless he or she
wishes to report the CABG surgery
measures group. The measures in the
CABG surgery measures group are
reportable only through a registry.
Comment: One commenter thought
we should allow satisfactory reporting
of measures groups via registries to
count for 2 years of PQRI reporting.
Response: Our statutory authority
authorizes an annual PQRI program. For
each year, there are established specific
reporting periods and reporting criteria.
The incentive payment for PQRI must
be for covered professional services
furnished during a given reporting
period. We do not have the authority to
allow satisfactory reporting of measures
groups via registries for a 1-year
reporting period to count as satisfactory
reporting for another year or reporting
period.
Based on the comments received, we
are finalizing the six options proposed
for satisfactorily reporting on measures
groups as described in Table 12. The
details of the requirements for registries
are contained in section II.O1.b.iii.
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TABLE 12—FINAL 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 percent 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 percent 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 ............................
Registry-based reporting ............................
While claims are submitted to CMS
on Medicare patients only (for claimsbased reporting), the 30 consecutive
patients option for registry-based
submission for the January 1, 2009
through December 31, 2009 reporting
period may include some, but may not
be exclusively, non-Medicare 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.
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iii. Registry-Based Submission for
Reporting Individual Measures
As discussed in the CY 2009 PFS
proposed rule (73 FR 38562), section
101(c)(5)(F) of the MIEA–TRHCA, as
added by MMSEA and redesignated by
the MIPPA as section 1848(m)(5)(F) of
the Act, requires us to establish
alternative criteria for satisfactorily
reporting PQRI quality measures data
through medical registries. For 2009, we
proposed that eligible professionals
would be able to report 2009 PQRI
quality measures results and numerator
and denominator data on quality
measures 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 (73 FR 38562). Similar to
the 2008 PQRI, we proposed (73 FR
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Reporting period
38562) that the data to be submitted for
the 2009 PQRI would include the
reporting and performance rates on
PQRI measures or PQRI measures
groups, as well as the numerators and
denominators for the reporting rates and
performance rates.
For the 2009 PQRI, we proposed (73
FR 38562) to continue the PQRI
reporting criteria for satisfactorily
reporting through registry-based
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 proposed to accept quality measures
results and numerator and denominator
data on quality measures from registries
that qualify as data submission vendors.
We proposed that these criteria would
be available for each of the two
alternative reporting periods.
We also proposed (73 FR 38563) to
require registries to complete a selfnomination process based on meeting
specific technical and other
requirements to submit on behalf of
eligible professionals pursuing incentive
payment for reporting clinical quality
information on services furnished
during 2009 for reporting both on
individual measures and measures
groups. We proposed that this selfnomination would be required
regardless of whether or not the registry
participated in any way in PQRI in 2008
(73 FR 38563).
In the CY 2008 PFS proposed rule (73
FR 38564), we requested comments on
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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.
the proposed options for registry-based
PQRI reporting of data on measures and
measures groups for services furnished
in 2009. We received several comments
on the proposed options for registrybased PQRI reporting of data on
measures and measures groups for
services furnished in 2009. Comments
related to the proposed options for
registry-based PQRI reporting of data on
measures groups were summarized and
addressed above in section II.O1.b.ii of
this final rule with comment period. A
summary of the comments received
related to our proposed use of registries
and the proposed options for registrybased PQRI reporting of data on
individual quality measures and our
responses to those comments are
discussed below.
Comment: We received numerous
comments in support of continuing to
allow registries to report quality
measures results and numerator and
denominator data on quality measures
to CMS on behalf of eligible
professionals who submit quality data to
them. Some commenters thought
permitting registry reporting would
allow us to better track patient outcomes
by looking at results over a period of
time rather than only track processes of
care and that registry reporting is less
burdensome. Additionally, one
commenter suggested we allow those
registries that were ‘‘qualified’’ to report
to PQRI in 2008 be ‘‘qualified’’ to report
to PQRI in 2009.
Response: For the 2009 PQRI, we are
finalizing our proposal to accept quality
measures results and numerator and
denominator data on quality measures
from registries as described in the
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
proposed rule (73 FR 38562 through
38564). The specifications and
qualifications for registries to participate
in the 2009 PQRI will be listed on the
PQRI section of the CMS Web site at
https://www.cms.hhs.gov/pqri under the
reporting tab, by November 15, 2008.
Based on the commenter’s suggestion
that registries that were ‘‘qualified’’ to
report to PQRI in 2008 be ‘‘qualified’’ to
report to PQRI in 2009, registries that
were ‘‘qualified’’ for 2008 will not need
to be ‘‘re-qualified’’ for 2009 unless they
are unsuccessful at submitting PQRI
data for 2008 (that is, fail to submit 2008
PQRI data per the 2008 PQRI registry
requirements). By March 31, 2009,
registries that were ‘‘qualified’’ for 2008
and wish to continue to participate in
2009 should indicate their desire to
continue participation for 2009 and
their compliance with the 2009 PQRI
registry requirements using the process
described below.
If a qualified 2008 registry is
unsuccessful at submitting 2008 PQRI
data (that is, fails to submit 2008 PQRI
data per the 2008 PQRI registry
requirements), the registry will need to
go through the full qualification process
similar to the qualification process that
took place for the 2008 PQRI. By March
31, 2009, registries that are unsuccessful
submitting quality measure results and
numerator and denominator data for the
2008 PQRI will need to be able to meet
the specifications listed below and in
the document on the Web site and send
a letter of self-nomination to us.
Registries that were not qualified for
the 2008 PQRI will need to be able to
meet the specifications listed below and
in the document on the Web site and
send a letter of self-nomination to us by
January 31, 2009.
Comment: One comment supported
registry use if they were open to all
providers.
Response: We assume that by
‘‘providers’’ the commenter was
referring to eligible professionals. As we
stated previously, registry reporting is
voluntary. There are ‘‘qualified’’
registries in our 2008 PQRI program that
intend to report all of the PQRI
measures. These registries are accepting
eligible professionals who wish to sign
up as new clients of the registry and are
open to all eligible professionals who
would like to participate with them.
There may be costs associated with
participating through registries but this
is outside of the purview of PQRI.
We note that although registries are
not required to report all PQRI
measures, eligible professionals who
wish to report PQRI quality measures
data through registries are required to
report on at least 3 quality measures
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when reporting on individual quality
measures or to report all measures in at
least one measures group when
reporting on measures groups. Thus, the
eligible professional is responsible for
ensuring that the registry that he or she
selects has the ability to report the
measures that the eligible professional
intends to report for PQRI.
Comment: We received one comment
requesting eligible professionals with
only 1 or 2 measures to be able to report
via registries.
Response: We did not propose to
allow registry reporting of 1 or 2
measures if less than 3 measures apply.
Analytically it would be difficult to
implement in that if an eligible
professional submits fewer than 3
measures via registries, we would not
know whether the eligible professional
did so because only 2 measures applied
or because the registry only accepts data
for 2 of the provider’s measures and he
or she is reporting their third measure
via claims. The amount of crosschecking via different submission
options that would be necessary makes
it impractical to implement the
commenter’s suggestion.
Comment: A few comments were
received regarding the process for
correcting data that was sent in via
registries that is incorrect.
Response: We highly discourage
eligible professionals from changing
data once it is submitted to CMS from
the registry. Allowing data to be
resubmitted for one or more
professionals would not only be timeconsuming and delay reports and
payment, but it could also result in
duplicating or erroneously leaving out
some professionals’ quality measures
results and/or numerator and
denominator data on quality measures.
Comment: Two commenters requested
that we specify what constituted an
acceptable validation strategy for
registries.
Response: As a result of the MMSEA,
which was enacted in December 2007,
and modified the PQRI, we
implemented registry-based submission
for the 2008 PQRI. Thus, for 2008, we
required registry vendors to supply CMS
with their validation strategy that would
detail how the registry would ensure
that the data the registry reported to
CMS was accurate. We found that there
are several variations for this process
that registries use. We do not believe we
have enough experience with registries
to specify a single validation strategy
that all should employ and we believe
we are benefited from allowing a variety
of such techniques to be employed
based on our approval at this point.
Therefore, for the 2009 PQRI, registry
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vendors will again be required to supply
us with their validation strategy that
details how the registry would ensure
that the data the registry reports to us is
accurate. In addition, we note that
registries are required to sign an
attestation statement to CMS vouching
for the accuracy of the data that they
submit to CMS on behalf of their eligible
professionals.
As we gain more experience with
registry submission, we would expect to
further specify through rulemaking
qualification requirements for registries
that may include more comprehensive
validation requirements. As we evaluate
our policies, we plan to continue a
dialogue with stakeholders to discuss
opportunities for program efficiency and
flexibility.
Comment: One commenter requested
that the registry record layout and
requirements be published by December
31, 2008. Similarly, many commenters
requested that the registry record layout
and requirements be published in this
final rule with comment period.
Response: We intend to have the
requirements posted on the PQRI
section of the CMS Web site at https://
www.cms.hhs.gov/pqri by November 15,
2008. However, the technical
specifications (that is, specifications for
the XML file format that registries
would need to use to submit PQRI
quality measures results and numerator
and denominator data on quality
measures to CMS) are not finalized and
will be made available to a registry after
the registry passes an initial
qualification process. This will prevent
registries that cannot satisfy the
requirements listed on the Web site
from expending resources trying to meet
the technical specifications. Meeting
only the technical specifications would
not in and of itself qualify the registry
to participate.
Comment: A commenter requested
that CMS work with standards
development organizations to align our
measures and specifications for
registries and EHRs with the standards
development organizations’ standards.
Response: We agree with the
commenter’s suggestion and do actively
interact with standards development
organizations. We desire to use such
standards when available and to
promote the adoption and use of such
standards.
Based on the comments received, the
2009 reporting options for registry-based
submission of at least three individual
PQRI measures are finalized as
proposed and are listed in Table 13.
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TABLE 13—FINAL 2009 PQRI REGISTRY-BASED SUBMISSION REPORTING OPTIONS FOR INDIVIDUAL MEASURES
Reporting mechanism
Reporting criteria
Registry-based reporting ............................
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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.
As discussed in section II.O1.b.ii. of
this final rule with comment period, we
are also establishing the three reporting
options for registry-based submission of
quality measures results and numerator
and denominator data on PQRI
measures groups summarized in Table
12.
To report quality measures results and
numerator and denominator data on
quality measures or measures groups
through registries, eligible professionals
will need to enter into and maintain an
appropriate legal arrangement with an
eligible clinical registry. As we
described in the CY 2009 PFS proposed
rule (73 FR 38562), such arrangements
will 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 Health Insurance
Portability and Accountability Act of
1996 (Pub. L. 104–191) (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, will submit
registry-derived measures information
to the CMS designated database within
the Quality Reporting System, using a
CMS-specified record layout.
To maintain compliance with
applicable statutes and regulations,
including but not limited to the 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.
To submit on behalf of eligible
professionals pursuing incentive
payment for reporting clinical quality
information on services furnished
during 2009 for reporting both on
individual measures and measures
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Reporting period
groups, registries that were ‘‘qualified’’
for 2008 will not need to be ‘‘requalified’’ for 2009 unless they are
unsuccessful at submitting 2008 PQRI
data (that is, fail to submit 2008 PQRI
data per the 2008 PQRI registry
requirements). Registries that were
‘‘qualified’’ for 2008 and wish to
continue to participate in 2009 should
indicate their desire to continue
participation for 2009 by submitting a
letter indicating their continued interest
in being a PQRI registry for 2009 and
their compliance with the 2009 PQRI
registry requirements by March 31,
2009. Such letters should be sent to:
2009 PQRI Registry Nomination, Centers
for Medicare & Medicaid Services,
Office of Clinical Standards and
Quality, Quality Measurement and
Health Assessment Group, 7500
Security Blvd., Mail Stop S3–02–01,
Baltimore, MD 21244–1850.
If a qualified 2008 registry is
unsuccessful at submitting 2008 PQRI
data (that is, fails to submit 2008 PQRI
data per the 2008 PQRI registry
requirements), the registry will need to
go through the full self-nomination
process again. By March 31, 2009,
registries that are unsuccessful
submitting quality measure results and
numerator and denominator data for
2008 will need to be able to meet the
specifications listed in this final rule
with comment period and in the
document on the Web site and send a
letter of self-nomination to the above
address. Registries that were not
‘‘qualified’’ for 2008 will need to be able
to meet the specifications listed in this
final rule with comment period and in
the document on the Web site and send
a letter of self-nomination to the above
address by January 31, 2009.
As we stated in the CY 2009 PFS
proposed rule (73 FR 38563), 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, but we
cannot assume responsibility for the
successful submission of data on PQRI
quality measures or measures groups, by
the registry.
The 2009 registry technical
requirements will be posted on the PQRI
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section of the CMS Web site at https://
www.cms.hhs.gov/pqri by November 15,
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 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 measure numbers for
the PQRI quality measures on which the
registry is reporting.
• Provide the measure title for the
PQRI quality measures on which the
registry is reporting.
• 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 an acceptable ‘‘validation
strategy’’ to CMS by March 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
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participants’ data, but may also be based
on other credible means of verifying the
accuracy of data content and
completeness of reporting or adherence
to a required sampling method.
• 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.
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
measures groups will be doing so for the
6- or 12-month period.
• Base reported information only on
patients to whom services were
furnished during the 12-month
reporting period of January through
December 2009 or the 6-month reporting
period of July 2009 through December
2009.
• Agree that the registry’s data may be
inspected by CMS under our health
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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 Part B FFS
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.
Registries that were ‘‘qualified’’ for
2008 and wish to continue to participate
in 2009 must indicate their compliance
with the above requirements for 2009 at
the time that they indicate their desire
to continue participation for 2009.
We will provide the technical
specifications (that is, specifications for
the XML file format that registries
would need to use to submit PQRI
quality measures results and numerator
and denominator data on quality
measures to CMS) to registries after a
registry passes an initial qualification
process for the 2009 PQRI. This will
prevent registries that cannot satisfy the
requirements listed on the Web site
from expending resources trying to meet
the technical specifications. Meeting
only the technical specifications would
not in and of itself qualify the registry
to participate.
iv. EHR-Based Submission for Reporting
Individual Measures
In addition to the testing of registrybased submission, we also described in
the CY 2009 PFS proposed rule (73 FR
38564 through 38565) our plans to test
the submission of clinical quality data
extracted from EHRs for five 2008 PQRI
measures and proposed to accept PQRI
data from EHRs and to pay the incentive
payment based on that submission for a
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limited subset of the proposed 2009
PQRI quality measures.
We proposed to begin accepting
submission of clinical quality data
extracted from EHRs on January 1, 2009
or as soon thereafter as is technically
feasible, based upon our completion of
the 2008 EHR data submission testing
process and our determination that
accepting data from EHRs on quality
measures for the 2009 PQRI is practical
and feasible. We proposed in the CY
2009 PFS proposed rule (73 FR 38564)
that the date on which we will begin to
accept quality data submission on
services furnished in 2009 would
depend on having 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.
We proposed that EHR vendors that
would like to enable their customers to
submit data on PQRI that is extracted
from their customers’ EHRs to the CMSdesignated 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 proposed that we
would use Certification Commission for
Healthcare Information Technology
(CCHIT) criteria and the Healthcare
Information Technology Standards
Panel (HITSP) interoperability standards
where possible and we encouraged
vendors to do so also. We encouraged
the use of EHRs that have been certified
by the CCHIT for data submission, but
recognized that there would 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.
We proposed 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 satisfactory reporting and the
same reporting period that we proposed
for claims-based submission of data for
individual 2009 PQRI measures. The
proposed reporting criteria for EHRbased submission of individual PQRI
measures are summarized in Table 14.
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TABLE 14—PROPOSED 2009 PQRI EHR-BASED SUBMISSION REPORTING OPTIONS FOR INDIVIDUAL MEASURES
Reporting criteria
EHR-based reporting ..................................
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Reporting mechanism
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.
In the CY 2008 PFS proposed rule (73
FR 38565), we invited comments on the
proposed use of EHR-based data
submission for PQRI. We received
numerous comments on the proposed
use of EHR-based data submission for
PQRI, which are summarized and
addressed below.
Comment: We received many
comments in favor of accepting quality
measures data through EHRs in 2009.
These commenters cited EHRs as a
means for increasing PQRI participation
and being able to report more accurate
data. There were a few commenters
who, while favoring EHR data
submission in general, thought that it
was premature to begin this process in
2009.
Response: We proposed to begin EHR
data submission for PQRI in 2009 based
on anticipation that we would have
sufficient testing completed to be
confident that systems would be in
place and operational by January 1,
2009. At this point, the testing process
is incomplete. As a result, we agree with
the commenter’s suggestion that it is
premature to begin EHR submission as
part of the 2009 PQRI. Rather, we
believe that it is more prudent to allow
the 2008 testing process to be
completed.
Furthermore, we are aware of the
importance of promoting and aligning
with the work of health information
technology (HIT) standards
development organizations. By
postponing implementation of EHR
submissions for PQRI, we believe this
alignment with and promotion of the
adoption and uses of HIT standards will
be enhanced.
Finally, we believe it would benefit
eligible professionals to know in
advance of the start of a PQRI reporting
period which EHR vendors are qualified
to submit clinical quality data extracted
from their EHR to CMS. At this point,
we would be unable to identify such
vendors in view of the incomplete
testing process.
Rather than implement EHR reporting
for the 2009 PQRI, and in order to
prepare for possible implementation of
EHR reporting for the 2010 PQRI, we
will complete the 2008 testing and
continue additional testing in 2009. In
addition, upon completion of
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Reporting period
satisfactory testing, we intend to qualify
EHR vendors and their specific products
to submit clinical quality data extracted
from their EHR products to the CMS
quality data warehouse. As vendors
qualify, we would post the names on the
PQRI section of the CMS Web site at
https://www.cms.hhs.gov/pqri for
informational purposes.
It should be noted, however, that
qualification of vendors for EHR data
submission does not assure that we will
include EHR data submission as an
option for satisfactorily reporting data
on quality measures for the 2010 PQRI.
Rather, this will be the subject of future
notice and comment rulemaking.
The process we will use to qualify
EHR vendors and their specific products
is described below.
Comment: One commenter suggested
we allow non-CCHIT certified EHRs to
submit data to PQRI.
Response: We are not planning to
accept data via EHRs for purposes of
satisfactorily reporting data on quality
measures in the 2009 PQRI and instead
will only continue testing in the 2009
PQRI. We do not intend to limit testing
to CCHIT certified EHRs given the fact
that relevant certification standards may
not yet have been adopted. Any EHR
quality data submission will be required
to comply with all current regulations
regarding security, privacy, and HIPAA.
Comment: A few commenters
suggested allowing EHRs to report
quality measures data on measures
groups.
Response: We did not propose this
option because of our concerns with the
feasibility of such reporting. In addition,
as discussed previously, we are not
including EHR reporting for the 2009
PQRI as an option but instead will
continue testing during 2009.
Comment: A commenter was
concerned that CMS does not
inadvertently facilitate anti-competitive
behavior by allowing reporting of
information on quality measures via
EHRs.
Response: We are unclear as to how
allowing quality data reporting through
EHRs could result in anti-competitive
behavior.
Comment: A few commenters
suggested either paying more money so
that providers can adopt HIT or paying
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January 1, 2009–December 31, 2009.
more incentives for measures submitted
electronically.
Response: We are authorized by
statute to provide incentive payments in
2009 to eligible professionals who
satisfactorily report PQRI quality
measures data and/or who are
successful electronic prescribers only.
We lack specific authority to pay
eligible professionals more incentives
for the adoption of HIT or for measures
submitted electronically.
The basis for the calculation of the
incentive payment for PQRI is also
statutorily defined and previously
discussed. We do not have the authority
to modify the amount of payments to
promote particular objectives, nor to
base the incentive payments for PQRI on
using an electronic means of
submission. As identified in section
II.O1.d.i. below, we note that one of the
structural measures selected for
inclusion in the 2009 PQRI is an HIT
measure (Measure #124). Thus, an
eligible professional who reports this
measure along with meeting the other
criteria for satisfactorily reporting for
the 2009 PQRI can earn an additional
2.0 percent of their estimated total
allowed charges for covered
professional services furnished during
the 2009 PQRI reporting period for their
adoption and use of HIT.
Additionally, as described in section
II.O2. of this final rule with comment
period, we are authorized to pay a 2.0
percent incentive payment for eligible
professionals who are successful
electronic prescribers in 2009. The 2.0
percent incentive payment for
successful electronic prescribers is a
separate incentive payment from the 2.0
percent incentive payment authorized
for satisfactory reporting of quality
information for the 2009 PQRI.
Comment: A few commenters
requested that we publish the
submission standards for EHRs as soon
as possible to allow practitioners and
vendors adequate time to modify their
systems by January 1, 2009. In addition,
several commenters requested that the
final rule specify the procedures and
requirements that EHR vendors must
meet to minimize errors in the EHR
reporting process during the reporting
period as well as procedures to be
followed to correct for errors that may
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occur when the vendor submits data to
CMS.
Response: As stated above, we are not
planning to accept data via EHRs for
purposes of satisfactorily reporting data
on quality measures in the 2009 PQRI.
We intend, however, to continue testing
in 2009 and to qualify EHR vendors and
their specific products to submit clinical
quality data extracted from their EHR
products to the CMS quality data
warehouse so that we may potentially
begin to accept data via EHRs for
purposes of satisfactorily reporting data
on quality measures in future PQRI
reporting. Therefore, by December 31,
2008, we anticipate posting on the PQRI
section of the CMS Web site at https://
www.cms.hhs.gov/pqri a list of
requirements that EHR vendors must be
able to meet in order to self-nominate to
have their product ‘‘qualified’’ to be able
to participate in the continued testing
phase in 2009 and with anticipation that
such vendors’ systems may be able to
submit quality measures data in the
future to CMS for PQRI on behalf of the
eligible professional(s) using the
system(s).
Based on the comments received
related to our proposal to begin
accepting data from EHRs for the 2009
PQRI and our experience thus far with
testing the EHR reporting mechanism,
we are not finalizing our proposal to
allow eligible professionals to submit
clinical quality data extracted from
EHRs for purposes of receiving an
incentive payment for the 2009 PQRI.
Instead, we will continue to test the
submission of clinical quality data
extracted from EHRs in 2009. The
measures on which specifications are
available for testing EHR data
submission are identified in Table 15.
The specifications for these measures
can be found on the QualityNet Web site
at https://www.qualitynet.org/dcs/
ContentServer?cid=1214232460333&
pagename=Qnet
Public%2FPage%2FQnetTier3&c=Page.
By December 31, 2008, we also
anticipate posting on the PQRI section
of the CMS Web site at https://
www.cms.hhs.gov/pqri a list of
requirements that EHR vendors must be
able to meet in order to self-nominate to
have their product ‘‘qualified’’ to
potentially be able to submit quality
measures data for the 2010 PQRI to
CMS. Qualifying EHR vendors ahead of
actual data submission will facilitate the
live data submission process.
EHR vendors interested in engaging in
the 2009 testing and qualification
process should review the EHR
requirements document that will be
posted on the PQRI section of the CMS
Web site at https://www.cms.hhs.gov. If
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an EHR vendor wishes to be included in
the testing and qualification process, the
vendor should submit a letter of selfnomination to CMS by February 13,
2009 to: PQRI EHR Nomination, Centers
for Medicare & Medicaid Services,
Office of Clinical Standards and
Quality, Quality Measurement and
Health Assessment Group, 7500
Security Blvd, Mail Stop S3–02–01,
Baltimore, MD 21244–1850.
The EHR vendors who self-nominate
will be included in a ‘‘qualifying’’
process (similar to the process
previously established for registries) to
assess their capabilities. If they are
found to meet the requirements, the
EHR vendors will be included in the
data submission testing. These
processes will have firm timelines that
vendors must meet. Failure to meet any
of these deadlines will be a basis for not
continuing to consider the EHR vendor
for qualification to submit data to the
CMS quality data warehouse. The
number of self-nominated vendors will
determine the timeframe needed to
complete the testing and qualification
process. However, it is expected that
this process will conclude by midsummer 2009. The measures and
reporting mechanism for the 2010 PQRI
will be the subject of future notice and
comment rulemaking. As previously
noted, the completion of the EHR
vendor quality data submission
qualification process does not ensure
that EHR reporting will be an option for
the 2010 PQRI.
c. Statutory Requirements for Measures
Included in the 2009 PQRI
i. Overview and Summary
Section 1848(k)(2)(B)(ii) of the Act
requires CMS to publish in the Federal
Register by no later than August 15,
2008, a proposed set of quality measures
that the Secretary determines would be
appropriate for eligible professionals to
use to submit data in 2009. In addition,
section 1848(k)(2)(B)(iii) of the Act
requires CMS to publish in the Federal
Register by no later than November 15,
2008, the final set of quality measures
that would be appropriate for eligible
professionals to use to submit data in
2009.
As discussed in the CY 2009 PFS
proposed rule (73 FR 38565), 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
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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,
the Secretary is given broad discretion
to determine which quality measures
meet the statutory requirements and are
appropriate for inclusion in the final set
of measures for 2009. We do not
interpret section 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 be included
in the 2009 set of quality measures. 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 2009 PQRI
measures were discussed in the CY 2009
PFS proposed rule (73 FR 38565
through 38566). As discussed in the
proposed rule, 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 limiting the 2009 PQRI
measures 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 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.
In addition, section 1848(k)(2)(D) of
the Act, as added by the MIPPA,
requires that for each 2009 PQRI quality
measure, ‘‘the Secretary shall ensure
that eligible professionals have the
opportunity to provide input during the
development, endorsement, or selection
of measures applicable to services they
furnish.’’ Eligible professionals have the
opportunity to provide input during the
development of a measure during the
public comment phase of a measure’s
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development. As part of the measure
development process, measure
developers typically solicit public
comments on measures that they are
testing in order to determine whether
additional refinement of the measure(s)
is needed prior to submission for
consensus endorsement. Additional
information on the measure
development process used by CMS
contractors is available in the ‘‘Quality
Measures Development Overview’’
document found on the CMS Web site
at https://www.cms.hhs.gov/Quality
InitiativesGenInfo/downloads/Quality
MeasuresDevelopmentOverview.pdf.
Eligible professionals also have the
opportunity to provide input on a
measure as the measure is being vetted
through the consensus endorsement
and/or adoption process. Both the NQF
and AQA employ a public comment
period for measures vetted through their
respective consensus endorsement or
adoption processes. Finally, eligible
professionals have an opportunity to
provide input on measures selected for
inclusion in PQRI through the notice
and comment rulemaking process we
use to announce the measures selected
for inclusion in PQRI each year. As
required by section 1848(k)(2)(B)(ii) of
the Act, we proposed measures for the
2009 PQRI in the Federal Register in
July, which was followed by a 60-day
comment period in which eligible
professionals had the opportunity to
comment. Accordingly, we believe the
additional requirement under MIPPA
with regard to the 2009 PQRI has been
met in multiple ways.
ii. Summary of Comments and
Responses
We received several comments related
to the statutory requirements for
measures included in the 2009 PQRI
and/or our approach to the selection of
measures, which are summarized and
addressed below.
Comment: Several comments
expressed concerns about the AQA’s
structure and original intended purpose
not being ideally suited to its current
role in PQRI, and its role in the measure
endorsement process not clearly adding
value to the process. Many comments
noted that the AQA does not meet the
NTTAA definition of a ‘‘voluntary
consensus standards body.’’
Response: Both the NQF and the AQA
were identified as examples of
consensus organizations under section
1848(k)(2)(B)(i) of the Act. We
interpreted this to mean that for
purposes of the PQRI, these
organizations, as constituted on the date
of enactment of the MIEA–THRCA
authorizing legislation, are considered
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to be consensus organizations. On the
other hand we stated that we found the
NQF to be an organization organized
and operating in a manner that meets
the NTTAA definition of a ‘‘voluntary
consensus standards body,’’ but we did
not find that the AQA constituted such
an organization. We also stated our
policy preference for measures endorsed
by an organization that meets the
NTTAA definition of ‘‘voluntary
consensus standards body’’ to one that
does not so qualify. Further, we stated
our policy that a measure that was
specifically declined for endorsement
by the NQF would not be included in
PQRI even though it was adopted by
AQA.
Comment: Several commenters
commended NQF for the scientific rigor
of its structure and review processes.
Some commenters in favor of
establishing a single consensus
organization entity whose approval
would qualify a measure for PQRI
inclusion went on to name NQF as the
leading or only named candidate for
such an organization.
Response: As stated previously, we
have stated a policy preference for NQFendorsed measures. However, we are
not limited by statute to using only
NQF-endorsed measures.
Comment: We received some
comments supportive of having
measures that originate from a variety of
sources and opposed to requiring PQRI
measurement development to come
solely from physician controlled
organizations. At the same time, several
commenters suggested we consider
establishing as policy that quality
measures to be used by, and analyzed at
the level of, individual PQRI-eligible
professionals, must be developed by
clinician controlled organizations to
assure relevance and promote uptake by
the eligible professional community.
Multiple commenters suggested that
explicit preference be given for
measures developed or endorsed by
physician specialty societies, in the
context of consensus-organization
review and CMS measure selection
processes. Some commenters stated that
the AMA–PCPI should be the sole
source for physician level measures.
Several commenters specifically
presented an interpretation of the
requirement under section
1848(k)(2)(B)(i) of the Act for the 2009
PQRI measures to include measures
submitted by a physician specialty as
meaning that the 2009 PQRI should
include only measures developed by
physician organizations, to assure
physician control of available measures
applicable to assessing the clinical
performance of individual physicians.
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69831
Response: Physician involvement and
leadership is standard in the work of
both measure developers and consensus
organizations. As a result, physicians
are actively involved at all levels of
measure development and consensus
adoption and endorsement. We are in
agreement that physician expertise is an
important ingredient in measure
development and in the consensus
process. We further recognize the
leadership of physician organizations,
as is reflected in the large number of
physician quality measures included in
PQRI which were developed by the
AMA–PCPI and its participating
specialty societies.
However, we do not agree that
physicians should be in complete
control of the process of measure
development, as would be the case if
measures were required to be developed
solely by physician-controlled
organizations. Any such restriction
would unduly limit the basic
development of physician quality
measures and the scope and utility of
measures that may be considered for
endorsement as voluntary consensus
standards. We do not interpret the
provisions in section 1848(k)(2)(B)(i) 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. Similarly, we
do not interpret section 1848(k)(2)(B)(i)
of the Act to require that each measure
included in the 2009 PQRI have been
developed by a physician specialty.
Section 1848(k)(2)(B)(i) of 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.
Comment: Several comments
addressed gaps in the PQRI measure set,
such as the lack of measures related to
patient-centeredness, equity/disparities,
and episodes of care based efficiency.
One comment expressed concern that
the PQRI measures appear to be targeted
to single conditions and to patients
where classical treatment goals are
appropriate and do not contain any
quality measures specifically addressing
multiple, co-morbid conditions. A few
comments urged CMS to adopt quality
measures that would enable the full
range of physicians to participate and to
identify and add more quality measures
to fill the gaps. The commenters also
requested that we consider developing
interim opportunities for eligible
professionals for whom there is a
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shortage of available measures to
participate in the PQRI and to receive an
incentive for doing so. One comment
urged funding for consumer-relevant
measure development to fill the existing
gaps and to include language in the
measure development contracts that
reflects the perspectives of consumers
and purchasers. Another commenter
urged us to include more measures on
which specifications for electronic data
submission via EHRs are available.
Response: Health care quality
measures are currently developed by a
variety of organizations and used by a
variety of governmental and
nongovernmental, and public-private
initiatives which have various and at
times differing priorities and
programmatic needs for quality
measures. As reflected by the
considerations for identifying proposed
PQRI quality measures described in the
CY 2009 PFS proposed rule (73 FR
38566), we are committed to having a
broad and robust set of quality measures
for the PQRI. However, we largely
depend on the development of measures
by professional organizations and other
measure developers. Although we had
significant involvement in the
development of measures applicable to
eligible professionals at the start of the
PQRI, ideally we would not need to be
closely involved in the development of
clinician-level quality measures but
would select from measures that meet
the statutory requirements. Thus, we
encourage professional organizations
and other measure developers to fund
and develop measures that address
some of the gaps identified by the
commenters.
Comment: One comment suggested
that we add additional measures in July
of each year for implementation in that
year’s PQRI. For example, in July 2009,
we should announce additional
measures for inclusion in the 2009
PQRI.
Response: Section 1848(k)(2)(B)(ii)
requires us to publish a proposed set of
quality measures for inclusion in a
particular year’s PQRI program in the
Federal Register by no later than August
15th of the prior year. Additionally,
section 1848(k)(2)(B)(iii) requires us to
publish a final set of quality measures
for inclusion in a particular year’s PQRI
program in the Federal Register by no
later than November 15th of the prior
year. We are not authorized to make any
changes to the final set of PQRI quality
measures for a particular year once the
set has been published in the Federal
Register.
However, as explained in the CY 2009
PFS proposed rule (73 FR 38570) we
introduced a test measures process
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during 2008, which gives eligible
professionals the opportunity to submit
the quality data codes for measures
included in the 2008 Measure Testing
Process. No financial incentive is
associated with the reporting of these
2008 test measures though. Instead, the
test measures process helps provide
experience with using the measures
which can contribute to future
consideration for the PQRI. We
proposed and are finalizing as 2009
PQRI measures certain measures
included in the 2008 Test Measures
Process.
d. The Final 2009 PQRI Quality
Measures
In the CY 2009 PFS proposed rule (73
FR 38566 through 38567), we solicited
comments on the implication of
including or excluding 175 specific
quality measures in 4 categories. We
also explained that while we recognized
that some commenters may wish to
recommend additional measures for
inclusion in the 2009 PQRI measures
that we had not proposed, we would not
be able to consider such additional
measures for inclusion in the 2009
measure set. We also described several
considerations used for selecting the
measures proposed for the 2009 PQRI.
We received multiple comments on
the proposed 2009 PQRI quality
measures, which are addressed below.
Comment: A number of comments
requested or recommended that we
make readily available on an ongoing
basis more detailed information on the
measure development process and
measures in development. Numerous
commenters also requested final
measure specifications be published as
far in advance of the beginning of the
reporting period as possible, and that
more detailed information about
measures proposed or finalized for use
in PQRI be published at the same time
as or in advance of future rulemaking.
Response: We agree that it is desirable
for the public to have information on
the measures development process and
measures in development. To this end
CMS has developed a standardized
process to be used for CMS contracted
measures development. This
standardized process is detailed in the
‘‘Quality Measures Development
Overview’’ document found on the CMS
Web site at https://www.cms.hhs.gov/
QualityInitiativesGenInfo/downloads/
QualityMeasuresDevelopment
Overview.pdf. Under the standardized
measures development process, we plan
that all CMS contracted measures
developers, in the future, will post the
measures for public comment on the
CMS Web site rather than solely on the
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individual contractor’s Web site. This
will allow a uniform access point for
information during the CMS contracted
basic development process for measures
intended for PQRI. Additionally, other
major measures developers publish
measures and specifications during
development and seek public comment
as do both NQF and AQA during their
consensus processes.
We agree with the commenters that it
is desirable to provide final measure
specifications sufficiently in advance of
the reporting period to allow reasonable
time for professionals to analyze new or
revised measures and implement any
needed changes in their office
workflows to accurately capture and
successfully submit data on a selection
of measures applicable to their practice
on which they can act to improve the
quality of the services they furnish.
Having detailed information on
measures available in advance of the
reporting period also enhances the
ability of vendors (such as practicemanagement software, billing services,
and electronic health records vendors)
to support professionals’ successful
implementation of revised data-capture
processes for the measures.
Given that section 1848(k)(2)(B)(iii)
requires that we publish the final list of
2009 PQRI measures in the Federal
Register no later than November 15,
2008, we expect to publish detailed
specifications shortly after that date.
Detailed measure specifications for
measures new or revised for 2009 PQRI
will be posted on the Measures/Codes
tab of the PQRI section of the CMS Web
site at https://www.cms.hhs.gov/pqri.
These detailed specifications will
include instructions for reporting and
identifying the circumstances in which
each measure is applicable. The detailed
technical specifications for measures in
the final listing for the 2009 PQRI
remain potentially subject to corrections
until the start of the 2009 reporting
period, as we stated in the proposed
rule. In addition, the 2009 PQRI quality
measure specifications for any given
quality measure may be different from
specifications for the same quality
measure used for 2008. Specifications
for all 2009 PQRI quality measures,
whether or not included in the 2008
PQRI program, must be obtained from
the specifications document for 2009
PQRI quality measures.
Since its inception, the PQRI program
has expanded rapidly in terms of the
number of measures included in the
PQRI. This rapid growth was necessary
in order to meet a primary objective of
having a sufficient number of measures
to allow broad participation by eligible
professionals who cover a broad scope
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of services provided to Medicare
beneficiaries. We now have a broad
range of measures and expect to rely
more on the test measures program to
introduce new measures. In this way, by
the time they may be proposed for
inclusion in a set of measures for a
particular year, the measures
specifications will be published,
established, and utilized by eligible
professionals for test submission.
Comment: Numerous commenters
suggested quality measures in addition
to the quality measures we had
proposed in Tables 11 through 14 of the
CY 2009 PFS proposed rule (73 FR
38567 through 38572) for the 2009
PQRI.
Response: We have not included in
final 2009 PQRI quality measures any
quality measures that were not
identified in the CY 2009 PFS proposed
rule as proposed 2009 PQRI measures.
As discussed above in this rule, we are
obligated by section 1848(k)(2)(B)(ii) of
the Act to publish and provide
opportunity for public comment on
proposed 2009 PQRI quality measures.
Measures recommended for selection
via comments on the proposed rule that
were not included in the proposed rule
have not been placed before the public
as part of notice and comment
rulemaking process. Thus, such
additional measures recommended via
comments on the proposed rule cannot
be included in the 2009 PQRI quality
measure set that is required to be
finalized via publication in the Federal
Register by November 15, 2008 in
accordance with section
1848(k)(2)(B)(iii) of the Act.
However, we have captured these
recommendations and will have them
available for consideration in
identifying measure sets for future
years’ PQRI and other initiatives to
which those measures may be pertinent
or possibly to be introduced as part of
a PQRI Test Measures Process.
Comment: We received a few
comments that suggested that some
measures are not conducive to claimsbased reporting but are good measures
if submitted via a registry or an EHR.
Response: We are not finalizing the
proposal to allow submission of clinical
quality data extracted from EHRS for the
2009 PQRI. We, however, agree that
some measures are not conducive to
claims-based reporting. For the 2009
PQRI, there are 18 measures that will
only be accepted for reporting via
registries due to their complex measure
specifications, which require multiple
diagnosis codes; a low number of
satisfactory submissions during the
2007 PQRI; and a high occurrence of
inaccurate quality date codes reporting
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for the 2007 PQRI. These measures are
identified in Tables 15, 16, 18, and 22
with a ‘‘+’’ after the Measure Title.
For the 2009 PQRI, the following 5
quality measures in Table 15 will be
reportable only through registries as
individual quality measures:
• Measure #7 CAD: Beta-Blocker
Therapy for CAD Patients with Prior
Myocardial Infarction (MI)
• Measure #33 Stroke and Stroke
Rehabilitation: Anticoagulant Therapy
Prescribed for Atrial Fibrillation at
Discharge
• Measure #46 Medication
Reconciliation: Reconciliation After
Discharge from an Inpatient Facility
• Measure #81 End-Stage Renal
Disease (ESRD): Plan of Care for
Inadequate Hemodialysis in ESRD
Patients
• Measure #82 ESRD: Plan of Care for
Inadequate Peritoneal Dialysis
The following 8 quality measures in
Tables 16 and 22 will be reportable only
through registries as individual quality
measures or part of the CABG measures
group for the 2009 PQRI:
• CABG: Prolonged Intubation
(Ventilation)
• CABG: Deep Sternal Wound
Infection Rate
• CABG: Stroke/Cerebrovascular
Accident (CVA)
• CABG: Post-operative Renal
Insufficiency
• CABG: Surgical Re-exploration
• CABG: Anti-platelet Medications at
Discharge
• CABG: Beta Blockade at Discharge
• CABG: Lipid Management and
Counseling
Finally, the following 5 quality
measures in Table 18 will be reportable
only through registries as individual
quality measures for the 2009 PQRI:
• Pediatric ESRD: Adequacy of
Hemodialysis
• 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
6 Months of Potent Antiretroviral
Therapy
Comment: One commenter suggested
that CMS accept as many measures as
possible that are based solely on
information derived from administrative
claims so that professionals would not
have to do additional coding.
Response: Under the PQRI program
eligible professionals are provided an
incentive payment for submission of
quality data. What is suggested would
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69833
not involve submission of quality data
but merely normal claims submission
from which quality inferences would be
made. An important difference in that
approach to PQRI is that under PQRI, by
submitting quality data, the eligible
professional indicates that the patient is
appropriately attributed to that
professional. When purely
administrative data are used, attribution
rules would need to be applied, with
which the physician or other eligible
professional may not agree. Thus,
focusing on administrative-data based
measures only could have the
unintended consequence of holding the
eligible professional responsible for
certain services which the eligible
professional might feel are beyond their
scope of care for a particular patient.
Comment: Several commenters
recommended changes to specific
quality measures’ titles, definitions, and
detailed specifications or coding. Many
of these recommendations were based
on alternative interpretations of clinical
evidence or concerns about the utility of
the measures. Some requests were
specifically concerned that measures be
expanded to include specific
professionals to whom the measure may
be applicable such as occupational
therapists, registered dieticians, and
audiologists. Specifically, one
commenter suggested that in order to
maximize the impact of Measure #1
Diabetes Mellitus: Hemoglobin A1c Poor
Control in Diabetes Mellitus, the PQRI
specifications should continue to
require a performance period of 12
months and reporting that identifies
whether A1c control is good (that is,
A1c ≤ 7.0 percent), moderate (that is,
A1c ≤ 9.0 percent, but > 7.0 percent), or
poor (that is, A1c > 9.0 percent).
Another commenter requested that CMS
re-evaluate the use of inpatient site of
service codes (99241 through 99245) for
Measure #5 Heart Failure: AngiotensinConverting Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker (ARB)
Therapy for Left Ventricular Systolic
Dysfunction (LVSD), Measure #6 CAD:
Oral Antiplatelet Therapy Prescribed for
Patients with CAD, Measure #7 CAD:
Beta-Blocker Therapy for CAD Patients
with Prior MI, and Measure #8 Heart
Failure: Beta-Blocker Therapy for LVSD.
Also another commenter requested the
addition of specifications for inpatient
reporting for Measure #56 CommunityAcquired Pneumonia (CAP): Vital Signs,
Measure #57 CAP: Assessment of
Oxygen Saturation, Measure #58 CAP:
Assessment of Mental Status, and
Measure #59 CAP: Empiric Antibiotic.
One commenter expressed gratitude that
audiologists are now eligible to
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participate in PQRI and willingness to
work with the measure developer to
expand Measure #94 Otitis Media with
Effusion (OME): Diagnostic
Evaluation—Assessment of Tympanic
Membrane Mobility and Measure #95
Otitis Media with Effusion (OME):
Hearing Testing. Lastly, one commenter
requested that we not use Measures #73
Cancer: Plan for Chemotherapy
Documented and Measure T143 Cancer
Care: Medical and Radiation—Plan of
Care for Pain until the measure
developers revise the measure
specifications to include all
chemotherapy and biologic disease
modalities recognized in clinical
guidelines. Also, this same commenter
requested that we not use the
Rheumatoid Arthritis measures group
until the measures’ developer revises
the measures to include all biologic
disease-modifying antirheumatic drugs
(DMARDS) used as a monotherapy or in
combination with nonbiologic
DMARDS, such as methotrexate.
Response: Quality measures that have
completed the consensus processes of
NQF or AQA have a designated party
(generally the measure developer/
owner) who has accepted responsibility
for maintaining the measure. In general,
it is the role of the measure owner,
developer, or maintainer to make
changes to a measure. The measure
maintainer and/or the developer/owner
of a measure included in the final set of
quality measures selected for the 2009
PQRI is identified as the ‘‘Measure
Source’’ in Tables 15 through 18. In
addition, NQF has, for its endorsed
measures, an established maintenance
process which may be accessed.
The Secretary is required to select
measures through notice and comment
rulemaking. We do not, however, use
notice and comment rulemaking as a
means to update or modify measure
specifications. We retain the ability to
update or modify specifications to the
measures until December 31, 2008. After
that date, there will be no changes to the
measure for the 2009 reporting
period(s).
Comment: A number of comments
requested or recommended that CMS
include ‘‘paired’’ measures in the 2009
PQRI. Commenters noted that while
under review by the NQF Steering
Committee several measures proposed
for 2009 were recommended to be
implemented as ‘‘paired measures’’ by
the NQF. Commenters referenced the
following proposed measures as paired
measures based on the NQF Steering
Committee’s recommendations:
(1) Hepatitis C: Hepatitis A
Vaccination and Hepatitis C: Hepatitis B
Vaccination.
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(2) Hepatitis C: Ribonucleic Acid
(RNA) Testing Before Initiating
Treatment and Hepatitis C: HCV
Genotype Testing Prior to Therapy.
(3) Oncology: Medical and
Radiation—Pain Intensity Quantified
and Oncology: Medical and Radiation—
Plan of Care for Pain.
Response: The 2009 PQRI will
include four measures sets that can be
considered paired measures. Each
paired measures set consists of two
closely related individual measures, but
which are composed of two similar and
complementary aspects of care. The
measures assess uniquely different
constructs in the assessment and/or
management of a particular condition.
Thus, while we note the
recommendation that the measures in a
particular paired measures set be
reported together, we do not require for
the 2009 PQRI that the measures in a
particular paired measures set be
reported together.
These paired measures do not
constitute a measures group. These
measures may be subject to the
measures validation strategy posted on
PQRI section of the CMS Web site at
https://www.cms.hhs.gov/PQRI/25_
AnalysisAndPayment.asp#TopOfPage.
Under the measures validation strategy
for eligible professionals that
satisfactorily report less than three
measures, failure to report the
additional measure(s) in a valid set
would cause the eligible professional to
fail to meet the validation requirements.
The four paired measures sets for the
2009 PQRI are as follows:
(1) Hepatitis C: Hepatitis A
Vaccination and Hepatitis C: Hepatitis B
Vaccination.
(2) Hepatitis C: Ribonucleic Acid
(RNA) Testing Before Initiating
Treatment and Hepatitis C: HCV
Genotype Testing Prior to Therapy.
(3) Oncology: Medical and
Radiation—Pain Intensity Quantified
and Oncology: Medical and Radiation—
Plan of Care for Pain.
(4) Falls: Risk Assessment and Falls:
Plan of Care.
Reporting instructions and detailed
measure specifications for the 2009
PQRI quality measures will be available
by no later than December 31, 2008 on
the PQRI section of the CMS Web site
at https://www.cms.hhs.gov/pqri.
Based on our review of these
comments, the final set of 153 quality
measures selected for the 2009 PQRI are
listed in Tables 15 through 18. These
measures can be categorized as follows:
(1) Measures selected from the 2008
PQRI quality measures set; (2)
additional NQF-endorsed measures; (3)
additional AQA-adopted measures; and
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(4) additional measures that had not
received NQF endorsement or AQA
adoption at the time the proposed rule
was published but whose selection was
contingent upon whether they received
NQF endorsement or AQA adoption by
August 31, 2008.
No changes (that is, additions or
deletions of measures) will be made
after publication of this 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.
As described in section II.O1.b.ii.
above, we are establishing a total of
seven measures groups for use in the
2009 PQRI. The measures selected for
inclusion in each of the 2009 measures
groups are listed in Tables 19 through
25.
i. Measures Selected From the 2008
PQRI Quality Measures Set
In the CY 2009 PFS proposed rule (73
FR 38567 through 38570) we proposed
to include in the 2009 PQRI quality
measures set 111 2008 PQRI quality
measures. We received several
comments on the 111 proposed
measures selected from the 2008 PQRI
quality measure set. The comments and
our responses to those comments are
discussed below.
Comment: We received numerous
comments in support of the 2008 PQRI
measures selected for the 2009 PQRI.
One commenter supports the retention
of all the 2008 PQRI measures proposed
for 2009. Other commenters specifically
support inclusion of the following
proposed 2008 PQRI measures in the
2009 PQRI:
• Measure #1 Diabetes Mellitus:
Hemoglobin A1c Poor Control in
Diabetes Mellitus
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• Measure #6 Coronary Artery
Disease (CAD): Oral Antiplatelet
Therapy Prescribed for Patients With
CAD
• Measure #11 Stroke and Stroke
Rehabilitation: Carotid Imaging Reports
• Measure #24 Osteoporosis:
Communication With the Physician
Managing Ongoing Care Post-Fracture
• Measure #39 Screening or Therapy
for Osteoporosis for Women Aged 65
Years and Older
• Measure #40 Osteoporosis:
Management Following Fracture
• Measure #41 Osteoporosis:
Pharmacologic Therapy
• Measure #48 Urinary Incontinence:
Assessment of Presence or Absence of
Urinary Incontinence in Women Aged
65 Years and Older
• Measure #58 Community-Acquired
Pneumonia (CAP): Assessment of
Mental Status
• Measure #84 Hepatitis C:
Ribonucleic Acid (RNA) Testing Before
Initiating Treatment
• Measure #85 Hepatitis C: HCV
Genotype Testing Prior to Therapy
• Measure #86 Hepatitis C:
Consideration for Antiviral Therapy in
HCV Patients
• Measure #94 Otitis Media With
Effusion (OME): Diagnostic
Evaluation—Assessment of Tympanic
Membrane Mobility
• Measure #95 Otitis Media With
Effusion (OME): Hearing Testing
• Measure #110 Preventive Care and
Screening: Influenza Immunization for
Patients ≥ 50 Years Old
• Measure #111 Preventive Care and
Screening: Pneumonia Vaccination for
Patients 65 years and Older
• Measure #112 Preventive Care and
Screening: Screening Mammography
• Measure #113 Preventive Care and
Screening: Colorectal Cancer Screening
• Measure #114 Preventive Care and
Screening: Inquiry Regarding Tobacco
Use
• Measure #115 Preventive Care and
Screening: Advising Smokers to Quit
• Measure #128 Preventive Care and
Screening: Body Mass Index (BMI)
Screening and Follow-Up
We also received several comments
specifically suggesting that Measure 73
Cancer: Plan for Chemotherapy
Documented be removed from the 2009
PQRI quality measures for failure to
achieve NQF endorsement.
Response: Table 15 shows that 101 of
111 proposed 2008 PQRI quality
measures have been finalized for the
2009 PQRI. All of the measures
specifically supported by commenters
are included in Table 15. As suggested
by commenters Measure #73 Cancer:
Plan for Chemotherapy Documented has
been removed from the 2009 PQRI
quality measures set because the
measure was considered and
specifically declined for endorsement
by NQF on or before August 31, 2008.
Comment: With respect to the two
proposed structural measures (Measure
#124 and Measure #125), we received 2
comments suggesting that we allow a
practice or an eligible professional to
simply attest to the use of an EHR or
electronic prescribing in their office
rather than report it on a claim as this
was considered burdensome. Another
comment recommended we treat an
eligible professional’s recognition under
the National Committee for Quality
Assurance (NCQA) Physician Practice
Connection (PPC) as equivalent to
reporting the two structural measures
(Measures #124 and #125).
Response: For those professionals
using an EHR, their system should be
able to auto populate a superbill with
the appropriate G code for this measure.
Many EHRs already code the visit with
diagnosis and level of service. The G
code could be added to the superbill in
this way. The EHR measure (Measure
#124) requires more than just having an
EHR system and software available in
the office; rather the measure also
measures ongoing use of the systems.
As required by section 1848(m)(3)(A)
of the Act, as redesignated and amended
by the MIPPA, we are removing the
electronic prescribing measure (measure
#125) from the 2009 PQRI quality
measure set and adopting the measure
for use in the e-prescribing incentive
program described in section II.O2. of
this final rule with comment period.
With respect to the recommendation
to consider recognition under the NCQA
PPC as equivalent to satisfactory PQRI
reporting, a fundamental PQRI
requirement is that the data be reported
on PQRI measures. The PPC is a
proprietary recognition program that
69835
does not utilize PQRI Measures #124 or
#125.
Comment: One commenter requested
clarification of a statement made in the
proposed rule regarding the 2008 PQRI
Measure #4 Screening for Future Fall
Risk not proposed for 2009. This
commenter noted that the measure
developer did not make a request to
retire this measure from PQRI nor was
the measure replaced by a new AQAadopted or NQF-endorsed measure
proposed for 2009 as stated in the CY
2009 PFS proposed rule (73 FR 38567).
The commenter advocated for Measure
#4 Screening for Future Fall Risk to
remain available for the 2009 PQRI.
Another commenter supported the
removal of Measure #4 Screening for
Future Fall Risk as a result of two new
substantially similar fall measures
proposed for 2009.
Response: The commenter was correct
in noting that the proposed rule
incorrectly stated that the 2008 PQRI
Measure #4 Screening for Future Fall
Risk not proposed for 2009 was retired
and intended to be replaced by new
AQA-adopted or NQF-endorsed
measures proposed for 2009.
However, we are not including
Measure #4 Screening for Future Fall
Risk in the final set of 2009 PQRI
quality measures. We consider the
following proposed AQA-adopted
measures included in the final 2009
PQRI quality measures set listed in
Table 17 to substantially cover the same
care process as Measure #4 Screening
for Future Fall Risk and more
comprehensive: Falls: Risk Assessment
and Falls: Plan of Care.
In addition, as previously stated in
this final rule with comment period, we
are obligated by section 1848(k)(2)(B)(ii)
of the Act to publish and provide
opportunity for public comment on
proposed 2009 PQRI quality measures
prior to including them in the final 2009
PQRI quality measures set.
Based on whether a measure retained
its NQF endorsement status as of August
31, 2008 and the comments received, we
are finalizing in the 2009 PQRI quality
measure set the following 101 of 111
proposed 2008 PQRI measures
identified in Table 15.
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TABLE 15—FINAL 2008 PQRI MEASURES SELECTED FOR 2009
Measure number and title
1.
2.
3.
5.
Measure source
Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus* ....................................
Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus* ..................
Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus* ......................................
Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor
Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)*.
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NCQA.
NCQA.
NCQA.
American Medical Association—Physician Consortium for Performance Improvement
(AMA–PCPI).
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TABLE 15—FINAL 2008 PQRI MEASURES SELECTED FOR 2009—Continued
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Measure number and 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)+,*.
8. Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD) .............
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 .........................................
76. Prevention of Catheter-Related Bloodstream Infections (CRBSI)—Central Venous Catheter
Insertion Protocol.
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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.
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.
AMA–PCPI/American Society of Clinical Oncology (ASCO)/National Comprehensive Cancer Network (NCCN).
AMA–PCPI/ASCO/NCCN.
AMA–PCPI.
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69837
TABLE 15—FINAL 2008 PQRI MEASURES SELECTED FOR 2009—Continued
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 ..................................................................
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.
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.
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. HIT: Adoption/Use of Electronic Health Records (EHR)* .......................................................
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 .......................................................
134. Screening for Clinical Depression ...........................................................................................
+ This
cprice-sewell on PROD1PC64 with RULES_2
* This
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.
NCQA.
AMA–PCPI.
AMA–PCPI.
NCQA.
NCQA.
NCQA.
AMA–PCPI.
NCQA.
NCQA.
NCQA.
AMA–PCPI.
NCQA.
AMA–PCPI
AMA–PCPI.
AMA–PCPI.
Quality Insights of Pennsylvania (QIP)/CMS.
American
Podiatric
Medical
Association
(APMA).
APMA.
QIP/CMS.
QIP/CMS.
QIP/CMS.
QIP/CMS.
measure is reportable only via registry-based reporting and is not reportable via claims-based reporting.
measure is 1 of 10 measures on which specifications are available for testing electronic submission via EHRs.
The following proposed measures
included in the 2008 PQRI on the basis
of AQA adoption were considered and
specifically declined for endorsement
by NQF on or before August 31, 2008
and therefore are not included in the
final measure set for the 2009 PQRI:
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• Measure #73 Cancer: Plan for
Chemotherapy Documented
• Measure #77 Gastroesophageal
Reflux Disease (GERD): Assessment of
GERD Symptoms in Patients Receiving
Chronic Medication for GERD
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Frm 00113
Fmt 4701
Sfmt 4700
• Measure #78 ESRD: Vascular
Access for Patients Undergoing
Hemodialysis
• Measure #101 Prostate Cancer:
Appropriate Initial Evaluation
• Measure #132 Patient CoDevelopment of Treatment Plan/Plan of
Care.
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As described in sections II.O2. and III.
of this final rule with comment period,
the MIPPA authorized a new incentive
program for successful electronic
prescribers. As a result, section
1848(m)(3)(A) of the Act, as
redesignated by section 131(b)(3)(C) of
the MIPPA and amended by section
131(b)(3)(D)(iii) of the MIPPA for 2009
and subsequent years, specifies that the
PQRI quality measures shall not include
electronic prescribing measures.
Therefore, Measure # 125 HIT:
Adoption/Use of Medication ePrescribing is not included in the final
set of 2009 PQRI quality measures. This
measure will instead be used for the
new e-prescribing incentive program
authorized by MIPPA as discussed in
section II.O2.
Lastly, we are not finalizing the
following proposed measures included
in the 2008 PQRI primarily because our
analysis of the 2007 PQRI results
indicate that there were no satisfactory
submissions and no quality data codes
accepted for these measures during the
2007 PQRI:
• Measure #96 OME: Antihistamines
or Decongestants—Avoidance of
Inappropriate Use
• Measure #97 OME: Systemic
Antimicrobials—Avoidance of
Inappropriate Use
• Measure #98 OME: Systemic
Corticosteroids—Avoidance of
Inappropriate Use
• Measure #120 CKD: ACE/ARB
Therapy.
With respect to Measures #96 through
#98, we also believe that eligible
professionals would be unlikely to
voluntarily report inappropriate actions.
With respect to Measure #120, our
analysis of the 2007 PQRI results
revealed that the measure requires
multiple diagnosis codes.
Please note that detailed measure
specifications for 2008 PQRI quality
measures may have been updated or
modified during the NQF endorsement
process or for other reasons prior to
2009. The 2009 PQRI quality measure
specifications for any given quality
measure may, therefore, be different
from specifications for the same quality
measure used for 2008. Specifications
for all 2009 PQRI quality measures,
whether or not included in the 2008
PQRI program, must be obtained from
the specifications document for 2009
PQRI quality measures, which will be
available on the PQRI section of the
CMS Web site on or before December
31, 2008.
As stated above, there are 5 measures
listed in Table 15 that can be reported
only via a registry for the 2009 PQRI
and, therefore, are not reportable via
claims-based reporting.
ii. Additional NQF-Endorsed Measures
We proposed to include in the 2009
PQRI quality measure set 17 new
measures endorsed by the NQF but that
were not included in the 2008 PQRI
quality measures. We received several
comments on the 17 proposed
additional NQF-endorsed measures,
which are summarized and addressed
below.
Comment: We received several
comments in support of the proposed
additional NQF-endorsed measures.
Comments were received specifically in
support of the following measures:
• Anti-platelet Medications at
Discharge.
• Hemodialysis Vascular Access
Decision-making by Surgeons to
Maximize Placement of Autogeneous
Arterial Venous Fistula.
One commenter, also the measure’s
developer, recommended the removal of
the proposed measure ‘‘Use of Imaging
Studies in Low Back Pain’’ and noted
that this measure does not share a
common denominator with the other
measures within the Back Pain
measures group.
Response: We concur with the
comments in support of the proposed
additional NQF-endorsed measures.
However, for the reasons recommended
by the measure developer the proposed
measure ‘‘Use of Imaging Studies in
Low Back Pain’’ has been removed from
the 2009 PQRI quality measures set.
For the 2009 PQRI quality measure
set, we are finalizing 15 of the 17
proposed measures that were endorsed
by the NQF but were not included in the
2008 PQRI quality measures. These 17
measures are identified in Table 16.
Besides having NQF endorsement, these
measures were considered ready for
implementation for the purposes of the
2009 PQRI as of October 15, 2008 based
on the following—(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 to be reported by claims
have been established and will be
effective for CMS claims data
submission on or before January 1, 2009.
TABLE 16—FINAL ADDITIONAL NQF–ENDORSED MEASURES
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Measure title
Measure source
Osteoarthritis (OA): Assessment for Use of Anti-Inflammatory or Analgesic Over-the-Counter
(OTC) Medications.
Back Pain: Initial Visit ......................................................................................................................
Back Pain: Physical Exam ..............................................................................................................
Back Pain: Advice for Normal Activities ..........................................................................................
Back Pain: Advice Against Bed Rest ..............................................................................................
Diabetes Mellitus: Foot Exam .........................................................................................................
Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation)+ ..................................
Coronary Artery Bypass Graft (CABG): Deep Sternal Wound Infection Rate+ ..............................
Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA)+ ........................
Coronary Artery Bypass Graft (CABG): Post-operative Renal Insufficiency+ .................................
Coronary Artery Bypass Graft (CABG): Surgical Re-exploration+ ..................................................
Coronary Artery Bypass Graft (CABG): Anti-platelet Medications at Discharge+ ..........................
Coronary Artery Bypass Graft (CABG): Beta Blockade at Discharge+ ..........................................
Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling+ ...............................
Hemodialysis Vascular Access Decision-Making by Surgeons To Maximize Placement of Autogenous Arterial Venous Fistula.
+ This
AMA–PCPI.
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
Society for Vascular Surgeons (SVS).
measure is reportable only via registry-based reporting and is not reportable via claims-based reporting.
As previously mentioned in this final
rule, we are not finalizing the proposed
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15:01 Nov 18, 2008
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measure, Use of Imaging Studies in Low
Back Pain, in the final 2009 PQRI
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quality measures set listed in Table 16
based on comments received.
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In addition, we are not finalizing the
following proposed NQF-endorsed
measure in the final 2009 PQRI
measures because its adaptation to the
PQRI format was subsequently found to
be not feasible: Selection of Antibiotic
Administration for Cardiac Surgery
Patients. Substantive components of this
measure are duplicative of Measure # 21
Perioperative Care: Selection of
Prophylactic Antibiotic—First OR
Second Generation Cephalosporin,
which is listed in Table 15.
As stated above, there are 8 measures
listed in Table 16 that can be reported
only via a registry for the 2009 PQRI
and, therefore, are not reportable via
claims-based reporting.
As described in the CY 2009 PFS
proposed rule (73 FR 38570), measures
designated as T### in the proposed rule
indicated that the measure was included
in the 2008 Measure Testing Process.
The T#### identifier was removed from
Table 16 in this final rule with comment
because each measure in the final 2009
PQRI quality measures set will be
assigned a unique number which may
be obtained from the detailed
specifications which will be made
available on the PQRI section of the
CMS Web site no later than December
31, 2008.
iii. Additional AQA Adopted Measures
As discussed in the CY 2009 PFS
proposed rule (73 FR 38565 through
38566), 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 proposed 21
new measures adopted by the AQA that
had not yet been reviewed or endorsed
by the NQF at the time the CY 2009 PFS
proposed rule was published and that
were not included in the final set of
2008 PQRI quality measures (73 FR
38571).
We received numerous comments on
the 21 proposed additional AQAadopted measures, which are
summarized and addressed below.
Comment: Numerous commenters
were in support of the inclusion of the
following proposed additional AQAadopted measures in the final 2009
PQRI measures:
• T138 Melanoma: Coordination of
Care.
• T139 Cataracts: 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 percent
OR Documentation of a Plan of Care.
• T143 Oncology: Medical and
Radiation—Plan of Care for Pain.
69839
• Oncology: Medical and RadiationPain Intensity Quantified.
• Oncology: Recording of Clinical
Stage for Lung Cancer and Esophageal
Cancer.
However, we received 2 comments
specifically suggesting that the proposed
measure, T144 Radiology: Computed
Tomography (CT) Radiation Dose
Reduction, not be finalized as part of the
2009 PQRI quality measures for failure
to achieve a recommendation for
endorsement by the NQF Steering
Committee on Outpatient Imaging
Efficiency.
Response: As suggested by
commenters Measure T144 Radiology:
Computed Tomography (CT) Radiation
Dose Reduction will not be finalized as
part of the 2009 PQRI quality measures
set because the measure was specifically
reviewed by NQF on or before August
31, 2008 but declined for endorsement.
All other additional AQA-adopted
measures specifically supported by
commenters are being finalized for the
2009 PQRI.
We are including in the final 2009
PQRI quality measure set 19 of the 21
proposed measures adopted by AQA
that had not yet been reviewed or
endorsed by the NQF at the time the CY
2009 PFS proposed rule was published
and that were not included in the final
set of 2008 PQRI quality measures.
These measures are identified in Table
17.
TABLE 17—FINAL ADDITIONAL AQA-ADOPTED MEASURES
Measure title
Measure source
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Chronic Kidney Disease (CKD): Influenza Immunization ........................................................................................................
Melanoma: Follow-Up Aspects of Care ...................................................................................................................................
Melanoma: Continuity of Care—Recall System ......................................................................................................................
Melanoma: Coordination of Care ............................................................................................................................................
Cataracts: Comprehensive Preoperative Assessment for Cataract Surgery with Intraocular Lens (IOL) Placement ...........
Age-Related Macular Degeneration (AMD): Counseling on Antioxidant Supplement ............................................................
Primary Open-Angle Glaucoma (POAG) : Reduction of Intraocular Pressure (IOP) by 15% OR Documentation of a Plan
of Care.
Oncology: Medical and Radiation—Plan of Care for Pain ......................................................................................................
Radiology: Exposure Time Reported for Procedures Using Fluoroscopy ..............................................................................
Oncology: Medical and Radiation—Pain 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 ...............................................................................
Falls: Plan of Care ...................................................................................................................................................................
Falls: Risk Assessment ...........................................................................................................................................................
Oncology: Radiation Dose Limits to Normal Tissues ..............................................................................................................
Hepatitis C: Hepatitis A Vaccination ........................................................................................................................................
Hepatitis C: Hepatitis B Vaccination ........................................................................................................................................
Oncology: Recording of Clinical Stage for Lung Cancer and Esophageal Cancer ................................................................
The following proposed measures are
not included in the final 2009 PQRI
quality measure set because they were
reviewed by NQF on or before August
31, 2008 and were not recommended for
endorsement:
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15:01 Nov 18, 2008
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• Measure T144 Radiology:
Computed Tomography (CT) Radiation
Dose Reduction; and
• Osteoporosis: Counseling for
Vitamin D, Calcium Intake, and
Exercise.
PO 00000
Frm 00115
Fmt 4701
Sfmt 4700
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.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
STS.
Besides being adopted by the AQA,
the measures we finalized were
considered ready for implementation for
the purposes of the 2009 PQRI as of
October 15, 2008 based on the
following—(1) the final, detailed
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specifications for use 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 to be reported by claims have
been established and will be effective
for CMS claims data submission on or
before January 1, 2009.
As described in section III.O.4.b,
measures designated as T### in the
proposed rule indicated that the
measure was included in the 2008
Measure Testing Process. The T####
identifier was removed from Table 17 in
the final rule with comment period
because each measure in the final 2009
PQRI measure set will be assigned an
unique number which may be obtained
from the detailed specifications which
will be made available on the PQRI
section of the CMS Web site no later
than December 31, 2008.
iv. Additional Measures Selected
Contingent upon NQF Endorsement or
AQA Adoption by August 31, 2008
We proposed to include in the 2009
PQRI quality measure set 26 new
measures that had not yet received NQF
endorsement or AQA adoption at the
time of the publication of the proposed
rule but whose selection was contingent
on NQF endorsement and/or AQA
adoption by August 31, 2008 (73 FR
38571 through 38572).
We received several comments on
these 26 proposed measures, which are
summarized and addressed below.
Comment: Several commenters were
in support of the following proposed
measures that have since been NQF
endorsed and/or AQA adopted as of
August 31, 2008:
• Nuclear Medicine: Correlation with
Existing Imaging Studies for all Patients
Undergoing Bone Scintigraphy; and
• Preventive Care and Screening:
Unhealthy Alcohol Use—Screening &
Brief Counseling.
One commenter, also the measure’s
developer, noted that the proposed
measure Lipid Screening is not available
for use in the 2009 PQRI. Several
commenters stated the following
proposed measures do not represent
standards of care and have technical
issues and therefore, opposed inclusion
of these measures in the final 2009 PQRI
measure set:
• Rheumatoid Arthritis: Appropriate
Use of Biologic Disease Modifying AntiRheumatic Drugs (DMARDs);
• Chronic Wound Care: Offloading of
Diabetic Foot Ulcers;
• Diabetes Mellitus: Diabetic Foot and
Ankle Care, Peripheral Arterial
Disease—Ankle Brachial Index; and
• Palliative Care: Dyspnea Screening
and Management.
Response: The final 2009 PQRI
measures have been selected based
upon the following criteria as stated in
the proposed rule:
• Achievement of NQF endorsement
or AQA adoption by August 31, 2008;
• Readiness 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 to be
reported by claims have been
established and will be effective for
CMS claims based submission on or
before January 1, 2009; and
• Proposed for use in the 2009 PQRI
in the CY 2009 PFS proposed rule with
an opportunity for public comment via
the rulemaking process.
As identified in Table 18, we are
including in the final 2009 PQRI quality
measure set 18 of 26 proposed measures
that were contingent upon NQF
endorsement or AQA adoption by
August 31, 2008.
TABLE 18—FINAL MEASURES SELECTED FOR 2009 CONTINGENT UPON NQF ENDORSEMENT OR AQA ADOPTION BY
AUGUST 31, 2008
Measure title
Measure source
Nuclear Medicine: Correlation with Existing Imaging Studies for all Patients Undergoing Bone Scintigraphy ......................
Preventive Care and Screening: Unhealthy Alcohol Use—Screening & Brief Counseling ....................................................
Pediatric ESRD: Adequacy of Hemodialysis+ .........................................................................................................................
Pediatric ESRD: Influenza Immunization ................................................................................................................................
Rheumatoid Arthritis: Tuberculosis Screening ........................................................................................................................
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 ......
Wound Care: Use of Compression System in Patients with Venous 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 6 Months of Potent Antiretroviral Therapy+ ......................................................................
Elder Maltreatment Screen and Follow-up Plan .....................................................................................................................
Functional Outcome Assessment in Chiropractic Care ..........................................................................................................
Endarterectomy: Use of Patch During Conventional Endarterectomy ....................................................................................
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+ This
AMA–PCPI.
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.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
QIP/CMS.
QIP/CMS.
SVS.
measure is reportable only via registry-based reporting and is not reportable via claims-based reporting.
These measures were selected based
on the comments received, whether the
measure received NQF endorsement
and/or AQA adoption by August 31,
2008, and whether the measure was
ready for implementation by October 15,
2008. A measure was considered ready
for implementation for the purposes of
the 2009 PQRI if by October 15, 2008—
(1) the final, detailed specifications for
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15:01 Nov 18, 2008
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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.
These additional measures augment
the opportunity for eligible
professionals to submit quality data
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Frm 00116
Fmt 4701
Sfmt 4700
under the PQRI where there were
limited measures. These additional
measures include the addition of
measures for nuclear medicine services,
pediatric ESRD services, rheumatoid
arthritis services, gastroenterology
services, wound care, and chiropractic
services.
The following proposed measures are
not included in the final set of 2009
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PQRI quality measures listed in Table
18 because they did not achieve NQF
endorsement or AQA adoption as of
August 31, 2008:
• Chronic Wound Care: Offloading of
Diabetic Foot Ulcers;
• Diabetes Mellitus: Diabetic Foot and
Ankle Care, Peripheral Arterial
Disease—Ankle Brachial Index; and
• Endarterectomy: Perioperative
Stroke or Death in Asymptomatic
Patient Undergoing Carotid
Endarterectomy (CEA).
The following proposed measures are
not included in the final set of 2009
PQRI quality measures listed in Table
18 because they were not ready for
implementation by October 15, 2008:
• Lipid Screening;
• Rheumatoid Arthritis: Appropriate
Use of Biologic Disease Modifying AntiRheumatic Drugs (DMARDs); and
• Participation by Physician or Other
Clinician in a Systematic Clinical
Database Registry that includes
Consensus Endorsed Quality Measures.
That is, by October 15, 2008, (1) the
final, detailed specifications for use of
the measure in data collection for PQRI
have not been completed and/or are not
ready for implementation, or (2) all of
the CPT II codes required for the
measure to be reported by claims have
not been established and/or will not be
effective for CMS claims based
submission on or before January 1, 2009.
In addition, we did not include in the
final set of PQRI measures listed in
Table 18 the following proposed
measures that subsequently were
adopted by the AQA, because their
adaptation to the PQRI format was
subsequently found to be not feasible:
• Palliative Care: Dyspnea Screening
and Management.
Finally, we did not include in the
final PQRI measures listed in Table 18
the following proposed measure:
• Endarterectomy: Peri-operative
Anti-platelet Therapy for Patients
Undergoing Carotid Endarterectomy
(CEA)
We did not include this measure in
the final 2009 PQRI quality measures set
for many reasons. First, this measure is
not reportable through claims
submission. The SVS did not selfnominate to become a qualified registry
for the 2008 PQRI and the SVS registry
is not currently collecting this measure.
In addition, we are not aware of any
other registries collecting this measure.
As stated above, however, there are 5
measures listed in Table 18 that can be
reported only via a registry for the 2009
PQRI, and therefore, are not reportable
via claims-based reporting.
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v. Measures Selected for Inclusion in
2009 Measures Groups
As discussed in the CY 2009 PFS
proposed rule, we proposed to retain
three of the four 2008 PQRI measures
groups for the 2009 PQRI—(1) Diabetes
Mellitus, (2) CKD, and (3) Preventive
Care. The measures proposed for
inclusion in the 2009 Diabetes Mellitus,
CKD, and Preventive Care measures
groups were identified in the CY 2009
PFS proposed rule (73 FR 38572
through 38573).
In addition to these three proposed
measures groups retained from 2008
with applicable modifications, there
were 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 measures groups
was proposed to contain at least four
PQRI quality measures. Except for the
Back Pain measures group, it was
proposed that all measures included in
a measures group could be reported
individually or as part of a group.
Measures in the Back Pain measures
group were proposed to be reportable
only as a part of this measures group.
In the CY 2009 PFS proposed rule (73
FR 38560), we invited comments on the
proposed new measures groups,
including suggestions for other
measures groups based on individual
measures included in the proposed 2009
PQRI measure set. We explained that for
the 2009 PQRI, measures groups must
contain at least 4 measures and asked
that all measures in each measures
group suggested by commenters be
included in the list of measures
proposed in the CY 2009 PFS proposed
rule (73 FR 38567 through 38572). We
explained that 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 the 2009 PQRI, as
identified below.
We received numerous comments on
the proposed measures groups, which
are summarized and addressed as
follows.
Comment: Many commenters
suggested that we create a composite
code for reporting all of the aspects of
care within a measures group. One
commenter specifically recommended
that the CABG Surgery measures group
be limited to a smaller number of
measures unless a composite code is
created for all aspects of care in the
measures proposed for inclusion in the
CABG Surgery measures group.
Response: We continue to seek
methods to simplify reporting and
increase participation in PQRI. We agree
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with this suggestion and have taken the
necessary steps to develop composite
codes for reporting all of the aspects of
care within a measures group. This
composite code will aid to simplify and
allow for ease of reporting for those
eligible professionals who elect to report
a measures group. The measures groups’
specifications document will be
updated to include composite codes. No
later than December 31, 2008, we will
post the detailed specifications and
specific instructions for reporting
measures groups on the PQRI section of
the CMS Web site at https://
www.cms.hhs.gov/pqri.
Comment: We received numerous
comments suggesting additional
measures groups. Examples of measures
groups’ topics suggested by commenters
include, but are not limited to,
geriatrics, hepatitis C, respiratory,
ischemic vascular disease (IVD),
cardiovascular disease and stroke care,
stroke treatment, osteoporosis, and oral
drug therapy. One commenter noted
that the proposed measures groups are
applicable to physicians only and
encouraged us to consider other eligible
professionals as new measures groups
are identified. Some commenters
suggested specific measures for
inclusion in their suggested measures
groups, but many commenters did not
suggest specific groups of at least 4
measures.
Response: While we welcome the
additional measures groups suggested
by commenters, we are not able to
consider such additional measures
groups for inclusion in the 2009 PQRI
since there is no opportunity for public
comment on the measures groups’
potential inclusion in the 2009 PQRI.
However, to the extent that commenters
suggested specific measures for
inclusion in a particular measures
group, we will take the commenters’
suggestions into consideration for
purposes of identifying measures groups
for possible inclusion in future years’
PQRI.
As stated in the CY 2009 PFS
proposed rule (73 FR 38560), each
measures group suggested by
commenters must contain at least 4
measures and must consist of the
proposed measures cited in section
II.O.4. of the proposed rule, ‘‘Proposed
2009 PQRI Quality Measures.’’ The
measures groups must have a particular
clinical condition or focus in common,
as identified by the denominator
definition and coding of the measures
groups.
We encourage professional
organizations and measure developers
to engage in the development of
measures groups, including measures
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groups that are applicable to other
nonphysician professionals. We will
continue working with stakeholders to
fill gaps for measures groups.
Comment: We received multiple
suggestions for altering the proposed
measure groups.
Response: As stated previously, we
requested in the CY 2009 PFS proposed
rule that suggestions for new measures
groups or measures included in a
particular measures group, must be
based on individual measures included
in the proposed 2009 PQRI quality
measure set. In response to the
suggestions provided by commenters,
the Use of Imaging Studies in Low Back
Pain measure has been removed from
the Back Pain measures group due to the
frequency for the process of care being
inconsistent with the other measures in
this measures group. No new measures
groups have been established outside of
what was included in the CY 2009 PFS
proposed rule. However, we encourage
professional organizations and measure
developers to engage in the
development of measure groups. We
plan to continue working with
stakeholders to fill gaps for measures
groups.
Comment: Several commenters
recommended retaining the ESRD
Measures Group for the 2009 PQRI by
replacing the 2008 PQRI Measure #80:
Plan of Care for ESRD Patients with
Anemia which was declined for NQF
endorsement with the proposed 2009
PQRI Measure #82 ESRD: Plan of Care
for Inadequate Peritoneal Dialysis listed
in section II.O1.d. of this final rule,
‘‘The Final 2009 PQRI Quality
Measures.’’
Response: As stated in the proposed
rule (73 FR 38560), the ESRD measures
groups is not being included in the 2009
PQRI because one of the measures in the
group is no longer NQF-endorsed. The
denominator definition and coding of
the ESRD measures proposed and
selected for the 2009 PQRI do not meet
the requirements for a measures group
as stated in section II.O1.b.ii. of this
final rule with comment period.
However, the proposed 2009 PQRI
Measure #82 ESRD: Plan of Care for
Inadequate Peritoneal Dialysis is
available to be reported as an individual
quality measure in the 2009 PQRI.
Based on the comments we received,
we are retaining three 2008 PQRI
measures groups for the 2009 PQRI—(1)
Diabetes Mellitus, (2) CKD, and (3)
Preventive Care. In some cases, different
or additional measures may be selected
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 selected for
inclusion in the 2009 Diabetes Mellitus,
CKD, and Preventive Care measures
groups are listed in Tables 19 through
21.
Some measures selected 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 19 through
25. 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 preceded by a
number have never been part of a PQRI
measure set until now. A number will
be assigned to such measures for the
2009 PQRI. 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.O1.b.ii.).
TABLE 19—FINAL MEASURES SELECTED 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 ........
Diabetes Mellitus: Foot Exam ..................................................................................................................................................
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
NCQA.
TABLE 20—FINAL MEASURES SELECTED FOR 2009 CKD MEASURES GROUP
Measure title
Measure source
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).
Chronic Kidney Disease (CKD): Referral for Arteriovenous AV) Fistula ................................................................................
Chronic Kidney Disease (CKD): Influenza Immunization ........................................................................................................
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
AMA–PCPI.
TABLE 21—FINAL MEASURES SELECTED FOR 2009 PREVENTIVE CARE MEASURES GROUP
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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 .........................................
112. Preventive Care and Screening: Screening Mammography ...........................................................................................
113. Preventive Care and Screening: Colorectal Cancer Screening ......................................................................................
114. Preventive Care and Screening: Inquiry Regarding Tobacco Use .................................................................................
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AMA–PCPI/NCQA.
AMA–PCPI.
NCQA.
NCQA.
NCQA.
AMA–PCPI.
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69843
TABLE 21—FINAL MEASURES SELECTED FOR 2009 PREVENTIVE CARE MEASURES GROUP—Continued
Measure title
Measure source
115. Preventive Care and Screening: Advising Smokers to Quit ...........................................................................................
128. Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up ....................................................
In addition to the three measures
groups retained from 2008 with
applicable modifications, there are four
new measures groups that we are
finalizing for the 2009 PQRI: (1) CABG
Surgery; (2) Rheumatoid Arthritis; (3)
Perioperative Care; and (4) Back Pain.
Each of the measures groups contains at
least four PQRI measures.
NCQA.
QIP/CMS.
Tables 22 through 25 lists the
measures selected for inclusion in each
of these new measures groups.
TABLE 22—FINAL MEASURES SELECTED 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 ................
Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation) + .........................................................................
Coronary Artery Bypass Graft (CABG): Deep Sternal Wound Infection Rate + ......................................................................
Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA) + ...............................................................
Coronary Artery Bypass Graft (CABG): Post-operative Renal Insufficiency + ........................................................................
Coronary Artery Bypass Graft (CABG): Surgical Re-exploration + .........................................................................................
Coronary Artery Bypass Graft (CABG): Anti-platelet Medications at Discharge + ..................................................................
Coronary Artery Bypass Graft (CABG): Beta Blockers Administered at Discharge + .............................................................
Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling + .......................................................................
+ This
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
STS.
measure is reportable only via registry-based reporting and is not reportable via claims-based reporting.
TABLE 23—FINAL MEASURES SELECTED FOR 2009 RHEUMATOID ARTHRITIS MEASURES GROUP
Measure title
Measure source
108. Rheumatoid Arthritis: Disease Modifying Anti-Rheumatic Drug (DMARD) Therapy ......................................................
Rheumatoid Arthritis: Tuberculosis Screening ........................................................................................................................
Rheumatoid Arthritis: Periodic Assessment of Disease Activity .............................................................................................
Rheumatoid Arthritis: Functional Limitation Assessment ........................................................................................................
Rheumatoid Arthritis: Assessment and Classification of Disease Prognosis .........................................................................
Rheumatoid Arthritis: Glucocorticoid Management .................................................................................................................
NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
TABLE 24—FINAL MEASURES SELECTED FOR 2009 PERIOPERATIVE CARE MEASURES GROUP
Measure title
20.
21.
22.
23.
Perioperative
Perioperative
Perioperative
Perioperative
Care:
Care:
Care:
Care:
Measure source
Timing of Antibiotic Prophylaxis—Ordering Physician ......................................................................
Selection of Prophylactic Antibiotic—First OR Second Generation Cephalosporin .........................
Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures) ............................................
Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL Patients) ..........................
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
AMA–PCPI/NCQA.
TABLE 25—FINAL MEASURES SELECTED FOR 2009 BACK PAIN MEASURES GROUP
Measure title
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Back
Back
Back
Back
Pain:
Pain:
Pain:
Pain:
Measure source
Initial Visit ..............................................................................................................................................................
Physical Exam .......................................................................................................................................................
Advice for Normal Activities ..................................................................................................................................
Advice Against Bed Rest ......................................................................................................................................
We are not finalizing the proposed
CAD and HIV/AIDS measures groups.
Analysis of the proposed CAD measures
group has revealed difficulty with
determining a common denominator
and that two of the four measures
within this measures group would
require additional diagnosis codes in
order to be applicable for the group.
Analysis of the proposed HIV/AIDS
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measures group has revealed several
barriers for establishing the common
denominator and the consecutive
patient determination. While these are
meaningful individual quality measures,
we believe that the issues as stated make
it impractical to use these measures as
measures groups.
The measures in the Diabetes
Mellitus; CKD; Preventive Care;
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NCQA.
NCQA.
NCQA.
NCQA.
Rheumatoid Arthritis, and Perioperative
Care measures groups are reportable
either individually or as part of the
measures group. The measures in these
measures groups can be reported
through claims-based or registry-based
submission.
The measures in the Back Pain
measures group are reportable only as a
measures group, not as individual
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measures. As individual measures, the
measures in the Back Pain measures
group are too basic; however, taken
together they are meaningful indicators
of quality of care for back pain. These
measures are also reportable through
claims-based or registry-based
submission.
Eight measures in the CABG surgery
measures group are reportable only via
registry-based reporting as a measures
group or as individual measures. These
measures cannot be reported through
claims-based reporting because they
cannot be feasibly specified for claimsbased reporting.
In addition, as discussed above, we
did not finalize Measure #120 CKD:
ACE/ARB Therapy in the 2009 PQRI.
Therefore, we are removing Measure
#120 from the CKD Measures Group and
are instead replacing Measure #120 with
the following 2 measures from Table 17:
• CKD: Referral for AV Fistula.
• CKD: Influenza Immunization.
Analysis of Measure #120 revealed
that the measure requires multiple
diagnosis codes, which is inconsistent
with the other measures in the CKD
Measures Group.
As noted in the CY 2009 PFS
proposed rule (73 FR 38560), the
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 could be different from
specifications and submission
instructions for the same measures
group used for 2008. These measure
specification changes do not materially
impact the intended meaning of the
measures or the strength of the
measures. Additionally, the
specifications for measures groups
would 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
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. We
will post the detailed specifications and
specific instructions for reporting
measures groups on the PQRI section of
the CMS Web site at https://
www.cms.hhs.gov/pqri by no later than
December 31, 2008.
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e. Uses of PQRI Information
i. Overview and Summary
In the CY 2009 PFS proposed rule (73
FR 38574 through 38575) we indicated
that we are contemplating a ‘‘Physician
Compare’’ Web site similar to other Web
pages we currently have 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) by enhancing the information
found on the Physician and Other
Healthcare Professional 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.
There are a variety of data sources that
could provide quality of care, value, and
other information for services provided
by professionals to Medicare
beneficiaries that could be used to
develop a Physician Compare Web site.
As we indicated in the proposed rule,
the data on PQRI quality measures that
is submitted at the individual (that is,
NPI) level by physicians and other
eligible professionals could be the basis
for public reporting of quality
measurement performance results at
either the individual or group (that is,
TIN) level. We also indicated that as
part of our broader goal to measure and
make the quality of care for services
furnished to Medicare beneficiaries
publicly available and in support of the
four cornerstones for value-driven
health care (that is, connecting the
health system through the use of
interoperable health information
technology; measuring and publishing
information about quality; measuring
and publishing information about price;
and using incentives to promote highquality and cost-effective care), we
anticipate making information on the
quality of care for services furnished by
professionals to Medicare beneficiaries
publicly available in the future. We also
indicated that we anticipate exploring
the use of information collected from
the PQRI, including performance
results, for this purpose. To assist us in
determining the most appropriate uses
of PQRI data, we invited 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.
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• 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.
In addition, subsequent to the
publication of the CY 2009 PFS
proposed rule, section 1848(m)(5)(G) of
the Act, as added by the MIPPA and
described in section III. of this final rule
with comment period, requires the
Secretary to post on the CMS Web site,
in an easily understandable format, a
list of the names of eligible
professionals (or group practices) who
satisfactorily submitted data on quality
measures for the PQRI and the names of
the eligible professionals (or group
practices) who are successful electronic
prescribers as defined and discussed
further below in section II.O2. This
requirement, however, cannot be
applied retrospectively to data that was
collected prior to the enactment of the
MIPPA.
ii. Summary of Comments and
Responses
The following is a summary of the
comments we received and our
responses.
Comment: A few commenters
expressed general support for publicly
reporting physician performance and/or
participation information and
applauded CMS’ efforts to assist
beneficiaries in making informed
decisions when choosing a health care
provider. One commenter noted that
although reporting performance
information back to providers is an
important first step, rapidly reporting
performance information to the public is
critical for informed decision-making by
consumers and purchasers. Some
commenters also expressed support for
making specific types of information
public about eligible professionals.
Examples of information that
commenters would like to see made
public include, but are not limited to,
board certification status and
certification maintenance status, adding
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hospital medicine to the list of
specialties contained in the Physician
and Other Healthcare Professional
Directory, CAHPS patient survey data,
an indicator of whether an eligible
professional participates in a clinical
data registry, and the numerators and
denominators for any measure rates that
are publicly reported.
Response: We are pleased to have the
commenters’ support for our broader
goal to make information on physician
performance publicly available. We
agree that such information may be
relevant and useful to a broad audience.
Physicians and other eligible
professionals can use information about
their own performance and the
performance of their peers to improve
the quality of the care they deliver.
Medicare beneficiaries and other
consumers can use such information to
inform their decision-making when it
comes to selecting their health care
providers. We note, however, that much
of the information that commenters
specifically requested be made public is
beyond the scope of this final rule with
comment period, which is limited to the
public disclosure of PQRI information.
Comment: A few commenters
suggested that we limit public reporting
of PQRI information to the names of the
clinicians and/or group practices that
satisfactorily participated and earned an
incentive payment.
Response: As stated previously, the
MIPPA requires us to list the names of
eligible professionals (or group
practices) who satisfactorily submitted
data on quality measures for the PQRI
on our Web site. While we agree that
information on who satisfactorily
submits data on quality measures for the
PQRI is useful information to have and
plan to list only the names of physicians
who satisfactorily participated in the
2009 PQRI and earned an incentive
payment, it is our goal to eventually
make performance information public as
well. We have made information on
quality of care in other care settings
publicly available and hope to
eventually do the same for physicians
and other health care practitioners as
part of our broader goal to measure and
make the quality of care for services
furnished to Medicare beneficiaries
publicly available.
Comment: Several commenters felt
that it would be premature to publicly
report any information derived from
PQRI at this time. Other commenters
merely urged CMS to proceed
cautiously when creating a Physician
Compare Web site using PQRI data.
Although some commenters supported
limiting the information to be publicly
reported to the names of eligible
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professionals and/or group practices
that satisfactorily participate in PQRI
and earned the bonus incentive
payment, many commenters cited
concerns with even listing just the
names of participants. Some of the
specific concerns cited include:
• Lack of program stability;
• Lack of evidence demonstrating that
compliance with pay-for-reporting
programs increases quality;
• Lack of evidence to demonstrate the
validity of some of the PQRI quality
measures;
• Successful participation
demonstrates only an eligible
professional’s ability to implement a
process and is not a measure of quality;
• Publicly reporting PQRI
participation information may give
beneficiaries or others who visit the
Web site the false impression that
eligible professionals who participated
are practicing higher quality medicine
than those who do not participate;
• Not clear how information on an
individual’s participation in the PQRI
would be helpful or meaningful;
• The analysis of physician
performance on some measures will be
based on small numbers;
• CMS’ data on PQRI participation
may be an inaccurate representation of
the number of eligible professionals
participating or making a good faith
effort to participate in PQRI since
clearinghouses inappropriately removed
NPI information from claims
submissions;
• Major improvements are needed to
the Physician and Other Healthcare
Professional Directory before it can form
the basis for a Physician Compare Web
site because there are accuracy issues
associated with the data on the
Physician and Other Healthcare
Professional Directory;
• It would be unfair to eligible
professionals to publish PQRI
information since no interim feedback
reports are provided to help participants
determine if they are reporting correctly;
• It would be especially unfair to
publicly report 2007 and 2008 data
because eligible professionals were not
informed in advance that such
information would be publicly reported;
• Publicly reporting 2007 PQRI
participation information may be
perceived by physicians as reneging on
prior commitments that CMS made to
physicians in which we indicated that
we would not publicly report PQRI
information at this time;
• While other providers, such as
hospitals, home health agencies, and
nursing homes had many months of
advance notice that CMS would be
launching public reporting programs for
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69845
those provider settings, eligible
professionals were given no advance
notice that PQRI information would be
made public until very recently;
• CMS does not have the authority to
publicly report PQRI performance
information since the Congress only
gave CMS the authority to publicly
report the names of successful
participants;
• The PQRI program is too new and
is a voluntary program;
• Many eligible professionals cannot
participate in PQRI due to the lack of
applicable measures;
• Experience with PQRI is limited
and individual eligible professionals are
still trying to determine how to integrate
PQRI into their office billing processes;
and
• There are numerous barriers, some
of which are described above, that make
it difficult for physicians and other
eligible professionals to participate in
the PQRI.
Response: We are appreciative of the
commenters’ thoughtful and
constructive feedback and will take
these concerns into consideration as we
further develop our plans for publicly
reporting PQRI information. While we
understand the commenters’ concerns,
we note that section 1848(m)(5)(G) of
the Act, as added by the MIPPA,
requires us to list the names of eligible
professionals who satisfactorily
submitted PQRI quality measures data
in an easily understandable format on
our Web site. As such, it is our intent
to identify the eligible professionals
who satisfactorily submit data on
quality measures for the 2009 PQRI on
the CMS Web site in 2010. We are not
required, nor are we specifically
authorized by MIPPA or preceding PQRI
authorizing legislation, to publicly
report 2007 and 2008 PQRI information
submitted prior to July 15, 2008.
Comment: A number of the
commenters urged CMS to delay the
public reporting of information derived
from PQRI that was authorized by the
MIPPA because eligible professionals
should have the opportunity to view
their individual data for several years
before it is made public. Several
commenters provided recommendations
for CMS to consider with respect to
publicly reporting PQRI information
and specifically as we proceed with
implementing the MIPPA provision to
list the names of the individuals or
physician groups who successfully
participate in the PQRI on CMS’s Web
site. Examples of some of the
recommendations received include:
• CMS should educate the public on
PQRI and its limitations and include
disclaimer language on the Web site
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explaining the PQRI program and its
limitations, such as the program is
voluntary, there are many barriers to
participation and many valid reasons for
nonparticipation, there are many factors
that could impact participation, the year
to year changes to the program, and
PQRI participation status is not a proxy
for quality.
• CMS should conduct a formal
evaluation to closely review the 2007
and 2008 PQRI program, including the
program’s processes and the analysis
and validation of the data gathered,
before proceeding with public reporting
of PQRI participation or performance
data. No PQRI data should be publicly
released until its accuracy and
reliability is verified, otherwise, serious
unintended consequences can occur.
CMS must make every effort to ensure
the accuracy of any information that
will be made public, including
demographic information and other
information listed in the Physician and
Other Healthcare Professional Directory,
and provide the American Medical
Association and medical specialty
societies access to aggregate PQRI
participation data so that these groups
can analyze the data to ensure accuracy,
improve upon identified quality gaps in
specialty care, and work with
physicians to boost participation.
• The Web site should positively
recognize physicians who attempted to
participate in the program and if a
physician or other eligible professional
attempted to participate but was not
deemed to be a successful participant,
CMS should provide the eligible
professionals with the reasons why and
give the eligible professional the
opportunity to correct any errors,
appeal, and/or request that the
participant’s explanation for why he or
she was not successful be made public.
• Eligible professionals should also
be given the opportunity to publicly
explain why they did not participate,
including the ability to describe any
quality improvement initiatives the
eligible professional participates in.
• CMS should provide more timely
and detailed confidential feedback
reports (including interim feedback
reports) to providers so that they can
quickly address any participation or
performance issues before data is posted
to the Web site.
• Eligible professionals should be
notified prior to the start of data
collection that data collected in a
particular year will be publicly reported
and should be given sufficient
opportunity to review and comment on
any information that will be made
public prior to its public release
following an initial dry run in which
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reports are shared only with the eligible
professionals. In addition, there should
be a formal process to allow eligible
professionals to correct any errors. CMS
should also make the comments
received from the review period public.
• CMS should not report the names of
those who satisfactorily submitted
quality data until the data submission
process and the reporting results have
been verified.
• CMS should work closely with the
physician community and other
stakeholders in establishing a Physician
Compare Web site and should establish
a multi-stakeholder workgroup to
provide input and feedback to CMS on
the development of the Web site,
including identifying potential problem
areas. This includes conducting focus
groups with consumers and providers to
determine the goals for public reporting
prior to deciding which data to report.
• CMS may want to consider
reporting data at the physician group or
team level as opposed to the individual
level as well as consider reporting
composite measures rather than
individual measures.
• Eligible professionals should have
the ability to opt-out of having their
information made public.
• Public reporting of PQRI
measurement results should be limited
to those measures that have achieved an
agreed upon baseline of scientific
acceptability post-implementation or to
those measures on which eligible
professionals chose to submit data.
• CMS should publish the names of
participating eligible professionals only
in cases where the PQRI measures that
the eligible professionals reported on
has been in use in the PQRI for at least
3 years. This indicates at least some
measure of stability in the program and
allows CMS to recognize those eligible
professionals that reported on measures
that have been in use in PQRI for less
than 3 years as early adopters.
• Any Physician Compare tool
developed by CMS needs to be userfriendly and thoroughly vetted and
evaluated prior to going live to the
public. CMS should consider formats
that balance the needs of end users with
the amount of data to be displayed and
permit specific action by patients,
families, and others. The Web site
should be designed to report current
measure sets but be flexible enough to
grow with the addition of measures and
physicians over time.
• CMS should take a two-phase
approach to publicly reporting PQRI
information at the NPI level. In Phase 1
CMS should publicize only the names of
those who participated. After 2 years,
then CMS should publicize the names of
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those who participated, those who did
not participate and those who
participated successfully in Phase 2.
Response: We appreciate the
numerous recommendations that were
provided in the spirit of ensuring a
successful launch of our efforts to make
information about physician
performance publicly available. As we
proceed with making the names of the
eligible professionals who satisfactorily
report data on quality measures for the
2009 PQRI, we will consider these
suggestions along with other input
received (both formally and informally)
as part of our ongoing dialogue with
stakeholders. We believe that many of
these suggestions are reasonable and
will try to incorporate them into our
plans to the extent that they are feasible
and practical.
c. Plans for Publicly Reporting
Information Derived From PQRI
To support the delivery of highquality, efficient health care and enable
consumers and providers to make more
informed health care decisions, CMS
plans to launch a Physician and Other
Health Care Professional Compare Web
site that will enhance the information
found on the current Physician and
Other Health Care Professionals
Directory at https://www.medicare.gov/
Physician/Home.asp?bhcp=1. CMS
anticipates that the addition of a
Physician and Other Health Care
Professional Compare Web site to the
compare family of Web sites will
complement the quality information
CMS already makes available for
hospitals, dialysis facilities, nursing
homes, and home health facilities.
Similar to the other compare Web sites,
Physician and Other Health Care
Professional Compare will include
information about the quality of care
and value for services provided by
physicians to Medicare beneficiaries.
As a first step, we plan to use
information from the PQRI program to
populate a Physician and Other Health
Care Professional Compare Web site.
Based on the public comments
received and the requirements under
section 1848(m)(5)(G) of the Act, we
will report publicly the names of
eligible professionals that have
satisfactorily submitted quality data for
the 2009 PQRI. This information will be
available in 2010, in an easily
understandable format, on a Physician
and Other Health Care Professional
Compare Web site at https://
www.medicare.gov/Physician/
Home.asp?bhcp=1.
For purposes of publicly reporting the
names of eligible professionals, on a
Physician and Other Health Care
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Professional Compare Web site, we will
post the names of eligible professionals
who have (1) submitted data on the
2009 PQRI quality measures through the
claims-based reporting mechanism or
through registry-based reporting, (2) met
one of the satisfactory reporting criteria
for the 2009 PQRI described in section
II.O1.b above, and (3) received a PQRI
incentive payment for covered
professional services furnished between
January 1, 2009 through December 31,
2009.
As with the other compare Web sites,
CMS plans to continue to expand the
information that is available on the
Physician and Other Health Care
Professional Compare Web site in the
future. CMS may publicly report
physician information that is
maintained in the ‘‘Performance
Measurement and Reporting System
(PMRS),’’ SOR number 09–70–0584, as
amended, in order to improve the
quality and efficiency of health care
delivery and enable consumers to make
more informed health care decisions.
This includes posting on an Internet
Web site the names of those physicians
who report data on quality measures
through the PQRI as described above as
well as other types of performance
measurement information. More
information about the PMRS SOR is
available at https://www.cms.hhs.gov/
PrivacyActSystemofRecords/downloads/
0584.pdf.
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O2. Electronic Prescribing
(E-Prescribing) Incentive Program
a. Program Background and Statutory
Authority
As discussed in section III. of this
final rule with comment period, the
MIPPA authorizes a new incentive
program beginning for 2009 for eligible
professionals who are successful
electronic prescribers. Since MIPPA was
enacted after publication of the CY 2009
PFS proposed rule, there was no
discussion of this new incentive
program in the CY 2009 PFS proposed
rule. We note, however, that many of
the requirements under MIPPA with
respect to the new e-prescribing
incentive program are selfimplementing. In addition, section
1848(m)(5)(C) of the Act, as
redesignated and amended by the
MIPPA, authorizes us to implement
certain aspects of the 2009 e-prescribing
incentive program by program
instruction or otherwise. Given that the
e-prescribing quality measure developed
under the PQRI program will be used in
2009, however, we are finalizing the
2009 e-prescribing incentive program in
this final rule with comment period.
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As defined in § 423.159(a), eprescribing is the transmission, using
electronic media, of prescription or
prescription-related information
between a prescriber, dispenser,
pharmacy benefit manager (PBM), or
health plan, either directly or through
an intermediary, including an eprescribing network. E-prescribing
includes, but is not limited to, two-way
transmissions between the point of care
and the dispenser.
The MMA and the creation of the
Medicare Prescription Drug Benefit
Program (Part D) promoted the use of
electronic prescribing by requiring the
adoption of interoperable Part D
standards for electronically prescribing
Part D covered drugs prescribed to Part
D eligible individuals. As required by
section 1860(D)(4)(e) of the Act, as
added by the MMA, ‘‘foundation
standards’’ were adopted on November
7, 2005 (70 FR 67568) and additional
Part D e-prescribing standards were
adopted on April 1, 2008, that are to
become effective April 1, 2009 (73 FR
18918).
Section 1860(D)(4)(e)(6) of the Act, as
added by the MMA, also permitted third
parties to offset the implementation
costs for electronic prescribing by
authorizing the creation of an exception
to the physician self-referral (‘‘Stark’’)
prohibition for certain donations of
electronic prescribing technology. This
enabled health plans, hospitals, and
medical groups to provide in-kind
support to physicians for electronic
prescribing. Furthermore the MMA
authorized the creation of a ‘‘safe
harbor’’ to protect these entities from
prosecution under the anti-kickback
statute.
There are many potential advantages
to e-prescribing. These advantages
include, but are not limited, to:
• Improving patient safety and
quality of care by (reducing medication
errors by up to 86 percent):
Æ Reducing illegibility.
Æ Reducing oral miscommunications.
Æ Providing warnings and alert
systems.
Æ Providing access to patient’s
medication history;
• Reducing time spent on pharmacy
phone calls and faxing;
• Automation of renewals and
authorization;
• Improving formulary adherence
(from 14 percent to 88 percent after eprescribing implementation) (Bell,
Douglas S. and Friedman, Maria A. ‘‘EPrescribing and the Medicare
Modernization Act of 2008.’’ Health
Affairs. 2005; Volume 24, no.5: 1159–
1169); and
• Improving drug surveillance/recall;
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69847
A more detailed description of the
benefits of e-prescribing can be found by
clicking on the Clinician’s Guide to
Electronic Prescribing link at https://
www.ehealthinitiative.org/. Many of
these advantages were also discussed at
a recent e-prescribing conference cosponsored by CMS. Downloadable
information from this conference is
available at https://www.eprescribingconference.com.
Although there are many benefits to
electronic prescribing, there has been
limited adoption and use of electronic
prescribing by physicians and other
professionals who prescribe
medications. It is estimated that only 5
to 18 percent of providers currently use
e-prescribing (Bell, Douglas S. and
Friedman, Maria A. ‘‘E-Prescribing and
the Medicare Modernization Act of
2008.’’ Health Affairs. 2005; Volume 24,
no. 5: 1159–1169.). The enactment of
the MIPPA in July, 2008, should
encourage significant expansion of the
use of electronic prescribing by
authorizing a combination of financial
incentives and payment differentials.
Financial incentives are available for the
years 2009 through 2013, and payment
differentials apply starting 2012 and for
all subsequent years.
Specifically, for 2009, in accordance
with section 1848(m)(2) of the Act, as
added by section 132(a) of the MIPPA,
a ‘‘successful electronic prescriber’’ as
defined by MIPPA and further discussed
below, is eligible to receive an incentive
payment equal to 2.0 percent of the total
estimated allowed charges submitted
not later than 2 months after the end of
the reporting period for all covered
professional services furnished during
the 2009 reporting period. This new Eprescribing Incentive Program is
separate from and in addition to any
incentive payment that eligible
professionals may earn through the
PQRI program discussed above.
Incentive payments for successful
electronic prescribers for future years
are authorized as follows:
• 2.0 percent for 2010.
• 1.0 percent for 2011.
• 1.0 percent for 2012.
• 0.5 percent for 2013.
Under section 1848(a)(5) of the Act, as
added by section 132(b) of the MIPPA,
a PFS payment differential applies
beginning in 2012 to those who are not
successful electronic prescribers.
Specifically, for 2012 and any
subsequent year, if the eligible
professional is not a successful
electronic prescriber for the reporting
period for the year, the fee schedule
amount for covered professional
services furnished by such professionals
during the year shall be less than the fee
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schedule that would otherwise apply
by:
• 1.0 percent for 2012.
• 1.5 percent for 2013.
• 2.0 percent for 2014 and each
subsequent years.
The application of the payment
differential will be the subject of future
notice and comment rulemaking and is
beyond the scope of this rule.
Under section 1848(m)(6) of the Act,
as amended by the MIPPA, the
definition of ‘‘eligible professional’’ for
purposes of eligibility for the electronicprescribing incentive program is
identical to the definition of ‘‘eligible
professional’’ for the 2009 PQRI under
section 1848(k)(3)(B) of the Act. In other
words, eligible professionals include
physicians, other practitioners as
described in section 1842(b)(18)(C) of
the Act, physical and occupational
therapists, qualified speech-language
pathologists, and beginning in 2009,
qualified audiologists. However,
eligibility is further restricted by scope
of practice to those professionals who
have prescribing authority.
b. Requirement for Successful Electronic
Prescriber
Under section 1848(m)(3)(B) of the
Act, as redesignated and added by the
MIPPA, in order to qualify for the
incentive payment, an eligible
professional must be a ‘‘successful
electronic prescriber,’’ which the
Secretary is authorized to identify using
one of two possible standards. For 2009,
to be a successful electronic prescriber,
the standard under section
1848(m)(3)(B)(ii) of the Act will apply,
in which an eligible professional must
report on at least 50 percent of
applicable cases, on such electronic
prescribing quality measure(s)
established by the Secretary under the
PQRI, for use in the Electronic
Prescribing Incentive Program. For
2009, as will be further discussed, there
is established one electronic prescribing
measure, with the applicable cases
being those where particular services
are furnished to Medicare beneficiaries
and billed under Part B.
The Secretary also has authority
under section 1848(m)(3)(B)(iii) of the
Act to identify a substitute standard for
successful electronic prescriber based
on the electronic prescribing of a
sufficient number (as determined by the
Secretary) of Part D prescriptions by an
eligible professional for the requirement
to report on electronic prescribing
measure(s). However, under section
1848(m)(3)(B)(i) of the Act, if this
standard were substituted by the
Secretary for a particular year, then the
standard based on the reporting on
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electronic prescribing measures would
no longer apply or be available. If the
Secretary decides to establish the
substitute requirement, the Secretary is
authorized to use Part D drug claims
data to assess whether a sufficient
number of prescriptions have been
submitted by eligible professionals.
For the 2009 Electronic Prescribing
Incentive Program, as described above,
we will require eligible professionals to
report on the existing electronic
prescribing measure established by the
Secretary as described in further detail
below. In future years, we intend to
consider the use of a certain number of
Part D prescribing events as the basis for
the incentive payment. However, our
ability to use this substitute requirement
for 2009 is not feasible. Our future
consideration will depend on
achievement of technical changes that
may be necessary and would be
addressed in future notice and comment
rulemaking.
c. The 2009 Reporting Period for
Successful Electronic Prescriber
Section 1848(m)(6)(C) of the Act, as
redesignated and amended by the
MIPPA, defines ‘‘reporting period’’ for
the 2009 E-Prescribing Incentive
Program to be the entire year. Therefore,
like for the 2009 PQRI, the reporting
period for the 2009 E-Prescribing
Incentive Program is defined as the
entire calendar year, or January 1, 2009
through December 31, 2009. Successful
electronic prescribers are eligible to
receive an incentive payment equal to
2.0 percent of the total estimated
allowed charges submitted by no later
than February 28, 2010 for all covered
professional services furnished January
1, 2009 through December 31, 2009.
d. 2009 Electronic Prescribing Measure
Section 1848(m)(3)(B)(ii) of the Act
provides that a successful electronic
prescriber is required to report on each
such electronic prescribing measure
established under the PQRI and that are
applicable to the eligible professional’s
services. There is one electronic
prescribing measure that has been
established for the PQRI. This measure
was developed in response to the
requirement under section
1848(k)(2)(B)(i) of the Act that the
Secretary include structural measures
for the 2008 PQRI, such as the use of
electronic health records (EHRs) and
electronic prescribing technology, and
again proposed for the 2009 PQRI. The
measure is identified as Measure #125
and is included in the 2008 PQRI: ‘‘HIT:
Adoption/Use of Medication EPrescribing.’’ This measure achieved
AQA consensus adoption in October
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2007, and was included in the 2008
PQRI. The measure was endorsed by the
NQF during 2008. The measure is being
reported by physicians and other
eligible professionals as a quality
measure for the 2008 PQRI. As required
by section 1848(m)(3)(A) of the Act, we
will finalize Measure #125 in this final
rule with comment period (for use in
the 2009 E-Prescribing Incentive
Program) and then the PQRI will have
no electronic prescribing measures for
2009 or thereafter.
We will post the updated measure
and its specifications for the 2009
Electronic Prescribing Incentive
Program (that is, Measure #125) on or
about the date of publication of this
final rule with comment period.
However, as noted below, we retain the
authority to make specification code
changes to the electronic prescribing
measure until December 31, 2008.
Measure specifications and/or reporting
instructions for Measure #125 for the
2008 PQRI are not identical to the
measure specifications and/or reporting
instructions for the 2009 E-Prescribing
Incentive Program. The final measure
specifications and reporting instructions
for the E-Prescribing Measure #125 for
the 2009 E-prescribing incentive
program will be posted on the PQRI
section of the CMS Web site at https://
www.cms.hhs.gov/PQRI/03_
EPrescribingIncentiveProgram.asp#
TopOfPage as soon as practical but by
no later than December 31, 2008.
e. Reporting the Electronic Prescribing
Measure
Reporting the electronic prescribing
measure for 2009 is limited to claims
based submission. The reporting of the
measure is subject to the same technical
requirements as for PQRI claims based
measures in terms of the items that need
to be submitted on the claim. Examples
of technical requirements include
submission of an NPI for the eligible
professional, inclusion of the measure
reporting codes on the same claim that
contains the denominator codes, and no
resubmission of the claims for purpose
of reporting numerator codes. Detailed
information on the technical submission
requirements is available on the PQRI
section of the CMS Web site at https://
www.cms.hhs.gov/pqri.
Measure #125, like other PQRI
measures, has two basic elements. These
include: (1) A reporting denominator
(for Measure #125, this consists of a set
of procedure codes) that defines the
circumstances when the measure is
reportable; and (2) a reporting
numerator (for Measure #125, this
consists of three specific codes, one of
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which must be reported for successful
reporting.)
The measure becomes applicable to a
particular patient and reportable when,
in billing for Part B services, the
professional includes at least one of the
procedure codes making up the
denominator on the claim for payment
(for example, a medical visit for CPT
code 99213). If one of the denominator
codes is included on a claim for Part B
services, then the physician or other
eligible professional must report one of
the numerator reporting codes on the
same claim to meet the reporting
requirement. Where the eligible
professional fails to report a numerator
reporting code specified for the measure
on such a claim, then the case would be
included in the denominator count, but
not in the numerator count for
satisfactory reporting. More detailed
information on the specific technical
requirements for correctly reporting
quality data codes is available on the
PQRI section of the CMS Web site at
https://www.cms.hhs.gov/pqri.
i. Reporting Denominator
The Measure #125 denominator
consists of specific billing codes for
professional services. They are typically
billed for services in the office or
outpatient setting furnished by
physicians or other eligible
professionals. Currently, the
denominator codes for the electronic
prescribing measure are CPT Codes:
90801, 90802, 90804, 90805, 90806,
90807, 90808, 90809, 92002, 92004,
92012, 92014, 96150, 96151, 96152,
99201, 99202, 99203, 99204, 99205,
99211, 99212, 99213, 99214, 99215,
99241, 99242, 99243, 99244, 99245, and
G Codes: G0101, G0108, G0109.
Measure #125 has no diagnosis codes or
age/gender requirements in order to be
included in the denominator (that is,
reporting of the e-prescribing measure is
not further limited to certain ages or
gender). As previously discussed, for
2009, the measure becomes reportable
when any one of these procedure codes
is billed by an eligible professional as
Part B services. As discussed further
under section II.O2.e.iii, however,
eligible professionals are not required to
report this measure in all cases in which
the measure is reportable. Physicians
and other eligible professionals who do
not bill for one of these procedure codes
on at least one claim during 2009 for
Part B services will have no occasion to
report the electronic prescribing
measure.
There is also a statutory limitation
under section 1848(m)(2)(B) of the Act
for the E-Prescribing Incentive Program
that will be discussed below. For 2009,
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we are applying the limitation that
requires that the total estimated Part B
allowed charges for the denominator
codes to which the electronic
prescribing quality measure (that is,
Measure #125) applies must constitute
at least 10 percent of the professional’s
total Part B allowed charges for the
incentive to apply. This limitation is
designed to target the electronic
prescribing incentive payments to
physicians or other eligible
professionals who have the opportunity
to prescribe a statutorily determined
sufficient amount of prescriptions and
not provide incentive payments of 2.0
percent of allowed charges in a year to
those physicians who do not have the
opportunity to prescribe a threshold
amount of prescriptions. However, this
limitation does not affect the ability to
report the measure, but rather we will
apply it in the final determination as to
whether an incentive is earned. See the
discussion below.
As initially required under section
1848(k)(2)(A)(ii) of the Act, and further
established through rulemaking and
under section 1848(m)(2)(B) of the Act,
we may modify the codes making up the
denominator of the electronic
prescribing measure. We have
considered whether to expand the scope
of the denominator codes to
professional services outside the
professional office and outpatient
setting for 2009, such as professional
services furnished in hospitals or skilled
nursing facilities. Although we retain
the authority to update technical
specifications of the measure until
December 31, 2008 for use in the 2009
E-Prescribing Incentive Program, we
will not expand the basic scope of the
denominator outside the professional
office and outpatient setting.
We believe that several reasons
support the limitation of the 2009 eprescribing measure (that is, Measure
#125) denominator codes to physician
and other eligible professional office
and outpatient settings. First, physicians
and other eligible professionals have
limited ability to influence the adoption
and availability of electronic prescribing
systems in hospitals or other provider
settings. Second, including codes for
professional services in provider facility
settings may negatively impact the
ability of professionals who practice in
office and facility settings to
successfully report the electronic
prescribing measure at the required 50
percent of cases. Without access to
electronic prescribing for services
furnished in a provider setting, the
professional would be unable to report
and these cases would count as not
reporting if such codes were included in
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69849
the measure denominator. Third, the
effect of the electronic prescribing
incentive payment is likely to have its
greatest impact in stimulating adoption
and use of electronic prescribing in the
professional office and outpatient
setting. While outpatient services are an
imperfect marker, outpatient services
are likely to represent the largest
opportunity to expand electronic
prescribing where prescribing is
frequent and the decision to adopt
electronic prescribing systems is also
dependent on the choices, practices and
funding by eligible professionals.
Fourth, the statutory limitation that
applies to eligibility for the incentive
also applies to the future differential
payment provisions. Extension of the
denominator codes to hospital-based
settings of care, may cause professionals
who exclusively practice in such
settings to be liable for a differential
payment for services furnished in a
setting where they have limited ability
to influence the adoption of electronic
prescribing.
ii. Qualified Electronic Prescribing
System—Required Functionalities and
Part D E-Prescribing Standards
To report Measure #125 the eligible
professional must report one of three
‘‘G’’ codes, as will be discussed below,
on the same claim for which one of the
denominator codes is billed. In
reporting any of the G codes, however,
and thereby qualifying for the incentive
payment for e-prescribing in 2009, the
professional must have and regularly
use a ‘‘qualified’’ electronic prescribing
system as defined in Measure #125. If
the professional does not have general
access to an e-prescribing system in the
practice setting, there is nothing to
report. In this way, Measure #125 is
more than a ‘‘pay-for-reporting’’
measure since the reporting must relate
to an already implemented e-prescribing
system.
Required Functionalities for a
‘‘Qualified’’ Electronic Prescriber
System. What constitutes a ‘‘qualified’’
electronic prescribing system is based
upon certain required functionalities
that the system can perform. As
currently specified in Measure #125, a
‘‘qualified’’ electronic prescribing
system is one that can:
(a) Generate a complete active
medication list incorporating electronic
data received from applicable
pharmacies and PBMs, if available.
(b) Allow eligible professionals to
select medications, print prescriptions,
electronically transmit prescriptions,
and conduct alerts (written or acoustic
signals to warn the prescriber of
possible undesirable or unsafe
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situations including potentially
inappropriate dose or route of
administration of a drug, drug-drug
interactions, allergy concerns, or
warnings and cautions).
(c) Provide information related to
lower cost, therapeutically appropriate
alternatives (if any). The ability of an
electronic prescribing system to receive
tiered formulary information, if
available, would suffice for this
requirement for 2009 and until this
function is more widely available in the
marketplace.
(d) Provide information on formulary
or tiered formulary medications, patient
eligibility, and authorization
requirements received electronically
from the patient’s drug plan (if
available).
Part D E-Prescribing Standards.
Section 1848(m)(3)(B)(v) of the Act, as
redesignated and added by the MIPPA,
requires that, to the extent practicable,
‘‘the Secretary shall ensure that eligible
professionals utilize electronic
prescribing systems in compliance with
standards established for such systems
pursuant to the Part D Electronic
Prescribing Program under section
1860D–4(e) of the Act.’’ Part D sponsors
must use when they transmit
prescriptions and certain prescription
related information for Part D covered
drugs that are prescribed for Part D
eligible individuals. In the qualified
electronic prescribing system context of
this rule, electronic systems must
convey the information listed above
under (a) through (d) using the
standards currently in effect for the Part
D e-prescribing program. New Part D eprescribing standards will be effective
April 1, 2009. These new Part D eprescribing standards can be found on
the CMS Web site at https://
www.cms.hhs.gov/eprescribing.
To ensure that eligible professionals
utilize electronic prescribing systems
that meet these requirements, EPrescribing Measure #125 requires that
those functionalities required for a
‘‘qualified’’ electronic prescribing
system must utilize the adopted Part D
e-prescribing standards.
The Part D e-prescribing standards
relevant to the four functionalities for a
‘‘qualified’’ system in Measure #125,
described above and listed as (a), (b), (c),
and (d), are:
(a) Generate medication list—Use the
National Council for Prescription Drug
Programs (NCPDP) Prescriber/
Pharmacist Interface SCRIPT Standard,
Implementation Guide, Version 8,
Release 1, October 2005 (hereinafter
‘‘NCPDP SCRIPT 8.1’’) Medication
History Standard;
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(b) Transmit prescriptions
electronically—Use the NCPDP SCRIPT
8.1 for the transactions listed at 42 CFR
423.160(b)(2);
(c) Provide information on lower cost
alternatives—Use the NCPDP Formulary
and Benefits Standard, Implementation
Guide, Version 1, Release 0 (Version
1.0), October 2005 (hereinafter ‘‘NCPDP
Formulary and Benefits 1.0’’);
(d) Provide information on formulary
or tiered formulary medications, patient
eligibility, and authorization
requirements received electronically
from the patient’s drug plan—use:
(1) NCPDP Formulary and Benefits 1.0
(2) Accredited Standards Committee
(ASC) X12N 270/271-Health Care
Eligibility Benefit Inquiry and Response,
Version 4010, May 2000, Washington
Publishing Company, 004010X092 and
Addenda to Health Care Eligibility
Benefit Inquiry and Response, Version
4010A1, October 2002, Washington
Publishing Company, 004010X092A1
for communicating eligibly information
between Medicare Part D sponsors and
prescribers.
(4) NCPDP Telecommunication
Standard Specification, Version 5,
Release 1 (Version 5.1), September 1999,
and equivalent NCPDP Batch Standard
Batch Implementation Guide, Version 1,
Release 1 (Version 1.1), January 2000 for
communicating eligibility information
between Medicare Part D sponsors and
dispensers.
There are, however, Part D eprescribing standards that are or will
shortly be in effect for functionalities
that are not commonly utilized at this
time. Such functionalities are not
currently required for a ‘‘qualified’’
system under Measure #125. One
example is Rx Fill Notification, which is
discussed in the e-prescribing final rule
(73 FR 18918, 18926). For purposes of
the 2009 electronic prescribing program
and incentive payments, it is not
required that the electronic prescribing
system contain all functionalities for
which there are available Part D eprescribing standards. Rather, the only
required functionalities are those stated
in the measure and described above in
the section entitled ‘‘Required
Functionalities for a ‘Qualified’
Electronic Prescribing System.’’ For
those required functionalities described
above, a ‘‘qualified’’ system must use
the adopted Part D e-prescribing
standards for electronic messaging.
There are other aspects of the
functionalities for a ‘‘qualified’’ system
that are not dependent on electronic
messaging and are part of the software
of the electronic prescribing system, for
which Part D standards for electronic
prescribing do not pertain. For example,
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the requirements in qualification (b)
listed above that require the system to
allow professionals to select
medications, print prescriptions, and
conduct alerts are functions included in
the particular software, for which Part D
standards for electronic messaging do
not apply.
We are aware that there are significant
numbers of eligible professionals who
are interested in earning the incentive
payment, but currently do not have an
electronic prescribing system. The
electronic prescribing measure does not
require the use of any particular system
or transmission network, but only that
the system be a ‘‘qualified’’ system
having the functionalities described
based on Part D e-prescribing standards.
While it is not appropriate for us to
suggest particular products, we will post
general information at or about the time
of publication of this rule that may be
helpful to the eligible professional in
selecting a system that meets the
requirements of a ‘‘qualified’’ system
under Measure #125. Additionally, we
will provide additional clarifying
information, as needed, in the form of
Frequently Asked Questions (FAQs) and
post them on the CMS Web site.
iii. Reporting Numerator
To report for an applicable case where
one of the denominator codes is billed
on a claim for Part B services, an eligible
professional must submit one of three G
codes specified in Measure #125 on the
same Medicare Part B claim.
• One G code is used to report that all
prescriptions in connection with the
visit billed were electronically
prescribed;
• Another G code indicates that no
prescriptions were generated during the
visit; and
• A third G code is used when some
or all prescriptions were written or
phoned in due to patient request, State
or Federal law, the pharmacy’s system
being unable to receive the data
electronically or because the
prescription was for a narcotic or other
controlled substance.
As we have previously discussed, to
qualify for an incentive payment under
the electronic prescribing incentive
program, the eligible professional must
report applicable G codes on claims
containing one or more denominator
billing codes, in at least 50 percent of
applicable cases. Since the measure
does not apply to claims for services not
containing one of the denominator
codes, professionals need not report G
codes for the electronic prescribing
measure on claims not containing one of
the denominator codes.
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Although only one of the three
reportable G codes indicates that the
physician or eligible professional used
electronic prescribing for all of the
prescriptions provided during the
encounter, the reporting of any one of
the G codes counts as successful
reporting and toward the required 50
percent reporting requirement.
However, as previously discussed by
reporting any one of the G codes, the
physician or eligible professional is
indicating that an electronic prescribing
system has been adopted for use.
With respect to narcotics and
controlled substances, the third G code
is reported in connection with using
written prescriptions rather than
electronic prescribing for such
medications, because electronic
prescribing of these medications is
currently prohibited by Federal
regulation. We are aware that the Drug
Enforcement Agency (DEA) has
proposed regulatory changes which if
finalized would allow electronic
prescribing of controlled substances
under certain circumstances. This third
G code would continue to be reportable
for the 2009 Electronic Prescribing
Measure without regard to possible
changes in the DEA’s regulations with
respect to the electronic prescribing of
controlled substances. Based on
concerns expressed to us, we are aware
that professionals may find it
impractical to utilize electronic
prescribing for controlled substances,
depending on specific requirements that
may be finalized by the DEA. Therefore,
to alleviate uncertainty with respect to
the electronic prescribing incentive
program, for 2009, physicians and other
eligible professionals may report the
electronic prescribing measure without
any requirement to use electronic
prescribing for narcotics or other
controlled substances without regard to
final action that the DEA may take on
this subject, based on the G codes
contained in the Electronic Prescribing
Measure.
f. Determination of Successful
Electronic Prescriber and Amount of
Incentive Payment
Determination of professionals who
are Successful Electronic Prescribers for
2009 is at the individual professional
level, based on the National Provider
Identifier (NPI) as it is under PQRI.
However, payment is made to the
practice represented by the Tax
Identification Number (TIN) to which
payments are made for the individual
professional’s services. Inasmuch as
some individuals (NPIs) may be
associated with more than one practice
or TIN, determination of Successful
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Electronic Prescriber for 2009, as it is for
PQRI, will be made for each unique
NPI–TIN combination. Payment will be
made to the applicable TIN.
Under PQRI, a physician or other
eligible professional may meet, in
theory, the criteria for satisfactory
reporting on as few as a single patient
falling within the denominator of a
measure and correctly reporting on that
measure. In the case of the E–
Prescribing Incentive Program, however,
section 1848(m)(2)(B) of the Act, as
added by the MIPPA, imposes a
limitation. As discussed above, for 2009,
the limitation provides that the
electronic prescribing incentive is not
available to an eligible professional
unless the eligible professional’s total
estimated allowed charges for covered
Medicare Part B services furnished for
the codes in the denominator of the
2009 Electronic Prescribing Measure
make up at least 10 percent of the
eligible professional’s total allowed
charges for all covered Medicare Part B
professional services furnished by the
eligible professional during the 2009
reporting period (that is, January 1, 2009
through December 31, 2009). The
statutory limitation also applies to the
future application of the payment
differential, which limits those to whom
the differential will apply as well.
Therefore, in determining whether an
eligible professional will receive an
electronic prescribing incentive
payment, CMS will determine whether
the 10 percent threshold is met based on
the claims submitted by the eligible
professional at the NPI/TIN level. This
calculation is expected to take place in
the first quarter of 2010 and will be
performed by dividing the individual’s
total 2009 charges submitted for the
measure’s HCPCS codes by the
individual’s total Medicare Part B
charges (as assessed at the NPI/TIN
level). If the result is 10 percent or more,
then the statutory limitation does not
apply and a successful electronic
prescriber would earn the electronic
prescribing incentive payment. If the
result were less than 10 percent, then
the statutory limitation would apply
and the eligible professional could not
receive an electronic prescribing
incentive payment.
As discussed previously, this
limitation will be applied by CMS in
determining whether the individual
professional meets the requirements for
the incentive payment. Although
individual eligible professionals may
decide about whether to report based on
their own assessment of what portion of
their allowed charges for Part B services
are likely to be made up of services
represented by the denominator codes,
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69851
individual professionals may report the
numerator codes without regard to the
statutory limitation for the incentive
payment.
If an eligible professional meets the 10
percent threshold for 2009, we will
determine whether the professional is a
successful electronic prescriber by
reporting the numerator codes for 50
percent of applicable cases. If the
professional is determined to be a
successful electronic prescriber, then
the incentive payment will be made.
As indicated above, for 2009, the
electronic prescribing incentive
payment is 2.0 percent of the total
estimated Part B allowed charges for the
reporting period (that is, the entire year,
for 2009). Thus, the incentive payment
is not solely 2.0 percent of the estimated
Part B allowed charges for services for
which the measure is reported, but 2.0
percent of all estimated Part B allowed
charges for the year. In other words,
although the measure denominator is
limited to certain office and outpatient
professional services, and the
requirement to be an electronic
prescriber is based on those services, the
incentive payment is paid as 2.0 percent
of all estimated Part B allowed charges
for the professional, submitted by the
end of February 2010.
g. Uses of Information on Successful
Electronic Prescribers
As discussed in section II.O1.e.i.
above, section 1848(m)(5)(G) of the Act,
as added by the MIPPA and described
in section III. of this final rule with
comment period, requires the Secretary
to post on the CMS Web site, in an
easily understandable format, a list of
the names of eligible professionals (or
group practices) who satisfactorily
submitted data on quality measures for
the PQRI and the names of the eligible
professionals (or group practices) who
are successful electronic prescribers. As
noted previously, this requirement
cannot be applied retrospectively to
data that was collected prior to the
enactment of the MIPPA.
In order to implement this
requirement we will report publicly the
names of eligible professionals who are
successful electronic prescribers for the
2009 E-Prescribing Incentive Program.
Along with the names of eligible
professionals who satisfactorily
submitted data on quality measures for
the 2009 PQRI, the names of eligible
professionals who are successful
electronic prescribers will be available
in 2010, in an easily understandable
format, on a Physician and Other Health
Care Professional Compare Web site at
https://www.medicare.gov/Physician/
Home.asp?bhcp=1.
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Accordingly, we will post on the CMS
Web site the names of eligible
professionals (1) whose 2009 Medicare
Part B charges for codes in the
denominator of the E-Prescribing
Measure #125 make up at least 10
percent of the eligible professional’s
Medicare Part B charges for 2009; (2)
who reported the E-Prescribing Measure
#125 in at least 50 percent of the cases
in which the measure was reportable
during 2009; and (3) who received an eprescribing incentive payment for
covered professional services furnished
January 1, 2009 through December 31,
2009.
Since the PQRI and the E-Prescribing
Incentive Program are two separate
incentive programs, it is feasible for an
eligible professional who participated in
both incentive programs to be listed
both as an individual eligible
professional who satisfactorily
submitted data on quality measures for
the PQRI and a successful electronic
prescriber if he or she met the criteria
for both incentive programs.
d. Summary of Comments and
Responses
Although the MIPPA was not enacted
until after publication of the CY 2009
PFS proposed rule, we received some
comments related to this new incentive
program that was authorized by the
MIPPA. A summary of these comments
and our responses is below.
Comment: We received a few
comments about the PQRI Measure
#125. These commenters suggested that
prior to implementation of this quality
measure in the e-prescribing incentive
program, the quality measure and our
design of the e-prescribing incentive
program should go through a public
comment process. One commenter
indicated support for the e-prescribing
incentive but noted that implementing
e-prescribing in physicians’ offices is
resource intensive and many local
pharmacies are not prepared to use eprescribing.
Response: As described above, the
MIPPA requires us to implement an
incentive payment for successful
electronic prescribers beginning in
2009. Many of the MIPPA requirements
with respect to the incentive payment
for successful electronic prescribers are
generally self-implementing, require
little exercise of discretion, and build on
existing aspects of the PQRI that have
already been proposed. In addition,
although section 1848(m)(5)(C) of the
Act, as redesignated and amended by
the MIPPA, authorizes us to implement
certain aspects of the 2009 e-prescribing
incentive program by program
instruction or otherwise, we are
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finalizing this program for 2009 in this
final rule with comment period. The
quality measure that we are using to
determine whether an eligible
professional qualifies as a successful
electronic prescriber was available for
public comment during its development
by QIP as well as during the consensus
process for AQA adoption and NQF
endorsement, both of which have been
achieved. Additionally, as this quality
measure was one of the quality
measures proposed for the 2009 PQRI in
the CY 2009 PFS proposed rule, the
public had an opportunity to comment
on this quality measure during the
proposed rule’s comment period.
Comment: One commenter was
concerned that future DEA regulation
changes may complicate e-prescribing.
The commenter urged us to exempt eprescribing of controlled substances
from any assessment of differential
payments.
Response: We are aware of the
proposed DEA regulation changes and
believe the modification and
explanation of the third G code
described above adequately addresses
this issue.
Comment: We received one comment
that emergency department evaluation
and management codes do not appear in
the denominator of the e-prescribing
measure proposed for the 2009 PQRI
(Measure #125). Another commenter
suggested that we maintain the eye visit
codes in this measure so that
ophthalmologists can participate in the
e-prescribing incentive program.
Response: We have addressed in the
body of the preamble the comment with
respect to hospital based services of
professionals. The current measure
specifications contain office and
outpatient codes applying to eye care.
As stated above, we will post the final
specifications for the e-prescribing
measure for purposes of the 2009 eprescribing incentive program no later
than December 31, 2008.
Comment: A few commenters
objected to the fact that there is no
definition as to what constitutes an
acceptable hardship exemption for the
e-prescribing incentive initiative.
Response: As discussed briefly above,
section 1848(a)(5)(A) of the Act, as
added by the MIPPA, authorizes the
Secretary, starting in 2012, to apply a
differential fee schedule amount for
covered professional services furnished
by an eligible professional who is not a
successful electronic prescriber. In
accordance with section 1848(a)(5)(B) of
the Act, the Secretary may, on a caseby-case basis, exempt an eligible
professional from the application of the
payment differential if the Secretary
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‘‘determines, subject to annual renewal,
that compliance with the requirement
for being a successful electronic
prescriber would result in a significant
hardship.’’ This hardship exemption is
to be used at the discretion of the
Secretary.
Since this hardship exemption
pertains only to those eligible
professionals subject to a payment
differential because they did not meet
the criteria for becoming a successful
electronic prescriber, this provision will
not become effective until 2012 when
the payment differential for those
eligible professionals who are not
successful electronic prescribers is first
required. As such, the definition of what
constitutes an acceptable hardship is
beyond the scope of this final rule with
comment period.
P. Discussion of Chiropractic Services
Demonstration
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 BN 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 BN. We
will assess BN by determining the
change in costs based on a pre- and
post-comparison of aggregate payments
and the rate of change for specific
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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
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
BN and the proposed offset during the
CY 2010 PFS rulemaking process.
The following is a summary of the
public comments we received and our
responses.
Comment: We received one comment
concerning the methodology for
determining BN. The commenter stated
that the Congressional intent for
implementing BN is clearly spelled out
in section 651(f)(1)(A) of the MMA. The
commenter believes the demonstration’s
costs should be offset from the totality
of services payable under the Part B
Trust Fund, and not a discrete minority
of services. The commenter stated that
our methodology is flawed because it
offsets demonstration costs only from
existing chiropractic services.
Response: Section 651(f)(1)(A) of the
MMA requires that ‘‘* * * the Secretary
shall ensure that the aggregate payment
made by the Secretary under the
Medicare program do not exceed the
amount which the Secretary would have
paid under the Medicare program if the
demonstration projects under this
section were not implemented.’’ The
statute does not specify a specific
methodology for ensuring BN. Our
methodology meets the statutory
requirement for BN and appropriately
impacts the chiropractic profession that
is directly affected by the
demonstration. The BN adjustment
under PFS will be limited to adjusting
the chiropractor fee schedule codes
(comprised of the 3 currently covered
CPT codes: 98940, 98941, and 98942).
No other codes would be affected.
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Q. Educational Requirements for Nurse
Practitioners and Clinical Nurse
Specialists
In the CY 2009 PFS proposed rule (73
FR 38576), we proposed 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 on or after January 1, 2003, must
meet all of the following criteria: (1) Be
a registered professional nurse who is
authorized by State law to practice as a
NP; (2) be nationally certified as a NP;
and (3) have a master’s degree in
nursing. The current NP qualification
standards in our regulations include
progressive requirements that are 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 in the CY 2000
PFS proposed rule (64 FR 39625) and
the subsequent final rule (64 FR 59411).
In the CY 2000 PFS final rule, we stated,
‘‘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.’’
In the CY 2009 PFS proposed rule (73
FR 38576), we also proposed to amend
our regulations at § 410.75(b)(4) which
require that NPs must have a master’s
degree in nursing. We proposed 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 proposed 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
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CNSs, alternatively, to meet these
requirements with a DNP doctoral
degree.
In the proposed rule, we
acknowledged that we are aware that
some educational institutions are
offering programs to prospective NPs
and CNSs that allow students to move
from a baccalaureate degree in nursing
directly to the doctoral degree in
nursing where they earn a DNP as a
terminal clinical doctoral degree.
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
noted that a Wall Street Journal article
(published April 2, 2008) 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 to recognize APNs with more
extensive education and training.
Therefore, we proposed to permit
qualified APNs with the DNP degree to
enroll and receive Medicare Part B
payment as NPs and CNSs.
We received several comments on our
proposals with the majority from
national organizations. The following is
a summary of the comments received
and our responses.
Comment: All of the comments that
we received on our proposed technical
correction supported the change. The
commenters agreed that the intent of the
graduated NP educational qualifications
was to ensure that practicing NPs and
their patients were not left unable to
enroll in Medicare after we adopted our
rules requiring national certification and
a master’s degree in nursing for
enrollment. Many commenters stated
that these NPs had already been
recognized and practicing as Part B
suppliers. The commenters also stated
that the technical correction does not
appear to violate the intent of the NP
educational qualifications and should
reduce any confusion that might still
remain regarding this requirement.
Response: We are finalizing the
technical correction as proposed in
order to clarify our requirement that
effective on or after January 1, 2003, all
NPs must have a master’s degree in
nursing.
Comment: The majority of
commenters commended CMS for our
proposal to recognize the DNP degree
and stated that we are keeping pace
with the transformation in advanced
practice registered nursing education.
The commenters applaud CMS for
recognizing the DNP degree as a valid
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degree that exceeds a master’s degree in
nursing and stated that recognition of
the DNP degree will be positive for
patients.
However, some commenters
cautioned against eliminating the
master’s degree in nursing for NPs and
CNSs and replacing it with the DNP
degree only. The commenters stated that
transitioning to the DNP degree as the
national standard by 2015 is only a goal
toward which the nursing profession
will work and that it may take longer for
some programs than others to address
State licensing and institutional issues.
Accordingly, the commenters requested
that both the master’s degree in nursing
and the DNP degree must be recognized
by CMS as appropriate credentials for
APN reimbursement. Additionally, one
commenter urged CMS not to require a
master’s of science in nursing (MSN)
degree instead of a master’s degree in
nursing.
Response: As we stated in the CY
2009 PFS proposed rule, we believe that
it is logical for Medicare to recognize
APNs with more extensive education
and experience while continuing to
recognize NPs and CNSs with a master’s
degree in nursing. NPs or CNSs with a
doctoral degree in nursing practice
should not be denied enrollment in the
Medicare program because our
educational standard for NPs and CNSs
is a master’s degree. Additionally, we do
not intend to eliminate the master’s
degree in nursing requirement and
replace it with solely the DNP degree.
We also have no plans to require a MSN
degree in lieu of a master’s degree in
nursing.
Comment: Two commenters stated
that they have not yet taken a position
on the DNP degree and on the various
DNP programs that graduate APNs.
However, the commenters noted that
many schools offering the DNP degree
have programs that focus on areas other
than clinical practice such as
administration, leadership, business,
and nursing policy. The commenters
also stated that DNP graduates seeking
to enroll in Medicare as new suppliers
should hold a clinically-based DNP
degree and also, ideally, attain advanced
practice certification. The commenters
believe that NPs and CNSs who
graduate from DNP programs should not
be allowed to bypass the master’s degree
in nursing before achieving the DNP
degree because they believe that the
master’s education provides the
appropriate foundation for CNS
practice. One commenter is opposed to
Medicare’s recognition of the DNP
degree in Medicare regulations at this
time because of the varying routes of
entry into a DNP program have not been
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resolved, there is a lack of
standardization of DNP programs’
multiple accreditation processes. The
commenters also stated that, and
Federal recognition of an unproven
nursing doctoral program seems
premature given that no State licensing
agency or State board of nursing has
developed statutes or regulations
authorizing the utilization of the DNP as
a substitute for the master’s education
requirement and NP or CNS
certification.
Response: We believe that as any new
educational program develops, there are
likely to be some uncertainty and
inconsistency inherent in the process.
However, the APN community has a
stated goal of moving toward a national
standard of graduating APNs from DNP
programs. We do not believe that it is
sensible to deny Medicare enrollment to
a registered professional nurse with a
DNP degree who meets all of the other
qualification requirements when we
enroll nurses with a master’s degree. We
have relied on our contractors to enroll
only those NPs and CNSs who have
graduated with a master’s degree in
nursing in addition to meeting other
qualification standards that require
State licensure and certification by a
recognized national certifying body. We
believe that these collective
qualifications ensure that only qualified
nurses with proper clinical training
furnish services to Medicare patients.
However, we plan to study and monitor
DNP programs as they continue to
evolve. If we discover that APNs
enrolling in Medicare as graduates of
DNP programs are not sufficiently
qualified to furnish services to Medicare
patients, we will reconsider our
education requirements and take
appropriate action.
Comment: One commenter suggested
revising the definition of a physician
under the NP and CNS qualifications.
Response: We believe this comment is
outside the scope of this regulation, and
therefore, we are not addressing this
comment at this time.
After reviewing the public comments,
we are finalizing our proposals to
amend the NP qualifications to
incorporate the technical correction and
to include the DNP degree under the
educational qualification requirements
for NPs and CNSs. However, we will
continue to study and monitor DNP
nursing programs, State legislative
action, and the State boards of nursing
as the DNP degree evolves.
R. Portable X-Ray Issue
The Conditions for Coverage (CfC) for
Portable X-Ray services are authorized
by section 1861(s)(3) of the Act and
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were adopted in 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
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 recognized by the
USDE 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, referencing organizations that
no longer perform the stated function
and requiring a specific duration of
training that is no longer the community
standard, we proposed to revise the
regulation to reflect the current
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requirements. References to schools
approved by the CEAMA or the AOA
will be deleted, and approval by
JRCERT will be added. In addition, we
proposed that the requirement for
formal training of not less than 24
months in duration be deleted, since
this criterion has not been part of the
criteria established by entities that
evaluate and approve x-ray technology
programs since 1993.
We proposed 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
July 1, 1966 but before January 1, 1993,
the time period during which CEAMA
and the AOA were approving training
programs, we proposed 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.
The following is a summary of the
comments we received and our
responses.
Comment: Commenters suggested an
alternate requirement for qualification
as an x-ray technologist, namely
American Registry of Radiologic
Technologists (ARRT) certification. The
commenters also stated that restricting
recognition to only graduates of JRCERT
accredited educational programs could
create a shortage of radiographers
eligible to furnish procedures.
Response: We agree that certification
by the ARRT is widely recognized;
however, ARRT certification is
voluntary, and therefore, may not be
required as a condition of employment.
Requiring ARRT certification would
present an additional expense and
testing obligation that individuals who
are otherwise qualified might not
choose to incur. Such a requirement
would also make it necessary for those
who are already working in the field to
obtain ARRT certification if they are not
already certified.
The goal of our proposed revision was
to update our regulations to reflect the
accurate accrediting entity and program
requirements for x-ray technology
programs. As it stood, the regulation
was inaccurate by referencing
organizations that no longer approve
and accredit x-ray technology programs,
and by specifying an outdated 24-month
program requirement. It was not our
intention to consider imposing new or
additional qualification requirements
for technicians.
In accordance with existing
regulations, we will continue to
recognize as qualified those individuals
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who have successfully completed a
program of formal training in x-ray
technology in a school approved by the
JRCERT, as well as those who have
earned a bachelor’s or associate degree
in radiologic technology from an
accredited college or university. States
will continue to have the autonomy to
utilize the ARRT exam for State
licensing purposes.
After reviewing the public comments,
we are finalizing the provisions as
proposed.
S. 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)
In the CY 2009 PFS proposed rule (73
FR 38578), we solicited public
comments on policy options regarding
physician involvement in the
certification and recertification for
Medicare-covered home health services
under a home health plans of care
(POC), payment for those services, and
the basis for those payments (relative
resources measured in RVUs).
Currently, we pay physicians for both
the certification and recertification of
home health POCs under HCPCS codes
G0180 and G01779, respectively. We
make payment for these services
through the PFS.
In the CY 2009 PFS proposed rule, we
expressed our concern that physician
involvement in the home health POC
may not be as extensive as we had
hoped. We recognize that there exists a
vast array of differing levels of
physician involvement in the
certification and recertification of home
health POCs. We continue to believe
that the active involvement of the
physician (to include ‘‘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 offered different
policy options and solicited the public
for comment on those options in an
effort to gather more information on this
issue, and any other possible underlying
issues that may exist.
The following is a summary of the
comments and our response.
Comment: Most commenters
suggested that we leave our current
policies and payment to physicians
unchanged, at least until the further
analysis is completed. To that end, it
was suggested by commenters that we
continue to study the role of the
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physician in home care and determine
which factors enhance a physician’s
ability to conduct oversight activities,
ensure appropriateness of care, and
work collaboratively with home health
agencies without further burdening
Medicare beneficiaries. Commenters
urged CMS to engage with industry
organizations that represent the
physicians that furnish these services, to
determine goals and assess options.
Commenters further suggested that goals
and options could include revising the
procedure codes used for billing,
assessing the current RVUs, and
establishing documentation
expectations.
Some commenters suggested that
payments to physicians for certifying
and recertifying HH POCs should be
restructured to provide incentives for
greater physician involvement, to
include personally seeing the patients.
Specifically, some commenters
suggested adding different payments for
the varying levels of physician
involvement in the certification and
recertification of HH POCs. Other
commenters urged CMS to consider how
home telehealth can be employed to a
greater degree to increase input of
clinical information directly to
physicians in lieu of face-to-face
contact.
Other commenters suggested that we
actively support amending the Medicare
statute to allow nurse practitioners
(NPs) to certify and recertify HH POCs.
Some commenters suggested that we
actively support demonstrations and
legislative proposals to build on the
concept of merging home care with
primary care under a single care
management entity for persons in the
advanced stages of chronic illnesses.
Other commenters suggested that
payment to medical directors should be
restored to HHAs, along with
requirements for their education and a
definition of their role, and that we
consider reimbursement for a planning
teleconference between the physician
and home health personnel.
Response: We appreciate the
comments from the public on this
matter and will continue to analyze and
consider those comments and
suggestions in future rulemaking.
2. Prohibition Concerning Payment of
Continuous Positive Airway Pressure
(CPAP) Devices
a. Background
Obstructive Sleep Apnea (OSA,
sometimes referred to as Obstructive
Sleep Apnea Hypopnea SyndromeOSAHS) is associated with significant
morbidity and mortality. It is a
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commonly under-diagnosed condition
that occurs in 4 percent of men and 2
percent of women. The prevalence
increases with age (up to 10 percent in
persons 65 and older), as well as with
increased weight. Complications of OSA
include excessive daytime sleepiness,
concentration difficulty, coronary artery
disease, and stroke. It is estimated that
10 percent of patients with congestive
heart failure (CHF) have OSA, which is
independently associated with systemic
arterial hypertension. Also, untreated
OSA is associated with a ten-fold
increased risk of motor vehicle
accidents.
Continuous Positive Airway Pressure
(CPAP) is prescribed by physicians to
treat OSA. The patient wears a face
mask that provides air pressure to help
keep the breathing passages open during
sleep. The purpose is to prevent the
collapse of the oropharyngeal walls and
thereby prevent the obstruction to
airflow during sleep, which occurs in
OSA. This treatment is generally
continued for the rest of the patient’s
life.
In 2006, Medicare spent
approximately $750 million for the
diagnosis and treatment of OSA. Sixty
five percent of those expenditures
represent the amount Medicare spent on
diagnostic related costs of OSA using
attended facility-based
polysomnography (PSG). The remaining
$260 million represents the amount
spent on treatment related costs
associated with the CPAP.
Stakeholders in the sleep community
suggest that OSA is currently
underdiagnosed and that the numbers of
persons using of CPAP will rapidly
grow with greater public awareness and
the convenient availability of in home
testing. It is difficult to precisely
estimate the ultimate growth because
the true proportion of undiagnosed
beneficiaries is unknown, and the
current stakeholder estimates may
reflect the prior limited access to home
sleep testing in the Medicare
population. We expect that this
combined with the March 2008
expansion of CPAP coverage may lead
to significantly increased overall
Medicare payments related to OSA
diagnosis and CPAP treatment. Though
we believe that most of this increase
will likely arise from greater beneficiary
access to medically appropriate care, we
are concerned that even a limited
proportion of fraud and abuse will be a
significant vulnerability when applied
in a very large benefit.
On March 13, 2008, we published a
national coverage determination (NCD)
that extends coverage of CPAP devices
to beneficiaries whose OSA has been
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diagnosed by certain unattended sleep
tests furnished in a setting other than a
sleep laboratory facility, that is, tests
that are furnished in the beneficiary’s
home, commonly referred to as home
sleep tests (HSTs). Prior Medicare
policy had covered CPAP devices only
for beneficiaries who’s OSA had been
diagnosed by facility-based attended
PSG. Attended facility-based PSG is a
comprehensive diagnostic sleep test
including at least
electroencephalography, electrooculography, electromyography, heart
rate or electrocardiography, airflow,
breathing effort, and arterial oxygen
saturation furnished in a sleep
laboratory facility in which a
technologist supervises the recording
during sleep time and has the ability to
intervene if needed.
The NCD represents a significant
expansion of coverage and facilitates the
new participation of new entities that
had not previously been involved in the
provision of this benefit. This also
allows testing to occur in patient homes,
which are not regulated as health care
facilities. For these and additional
reasons we describe below, we believe
that the diagnosis of OSA for coverage
of CPAP merits proactive and ongoing
oversight by CMS. Therefore, we intend
to closely monitor this benefit.
During the NCD public comment
period, we received many comments
expressing concern that financial
incentives could lead to abusive testing
practices that may harm Medicare
beneficiaries and the Medicare program.
Though these concerns were largely
focused on vulnerability that might
accompany the entry of new types of
entities into the sleep test business
following a broad expansion of
coverage, some commenters suggested
that vulnerabilities would be found in
sleep test facilities. Therefore, in the CY
2009 PFS proposed rule, we proposed to
prohibit the provider of a qualifying
sleep test—both PSG and HST—from
also being the supplier of the CPAP
device. Our use of the term provider
throughout this rule refers to those
individuals or entities that administer
and/or interpret the sleep test and/or
furnish the sleep test device, as
described below. The provision of
diagnostic sleep testing includes TCs
and PCs related to the administration
and interpretation of the test itself.
Commonly one entity will furnish the
sleep test device and another entity,
such as a physician, will furnish the
professional interpretation of the result
generated by the device. Depending on
the location in which the test is
performed (that is, attended facilitybased PSG or a HST), a sleep test
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provider may furnish the sleep test in its
own physical facility, that is, the sleep
laboratory, or may furnish the sleep test
device and deliver it to and retrieve it
from the beneficiary’s home.
We believe that Medicare
beneficiaries and the Medicare program
are vulnerable if the provider of a
diagnostic test has a financial interest in
the outcome of the test itself. This
creates incentive to test more frequently
or less frequently than is medically
necessary and to interpret a test result
with a bias that favors self-interest. In
the specific context of this rule, we
believe that the provider of a sleep test
has self-interest in the result of that test
if that provider is affiliated with the
supplier of the CPAP device that would
be covered by the Medicare program.
We believe that in most cases the
provider that would be submitting a
claim for payment related to the sleep
test will not be the beneficiary’s primary
physician but will be another party, for
example, another physician or a
diagnostic testing entity. We note that
only rarely would a Medicare
participating physician also be enrolled
as a Medicare DME supplier.
b. Regulation
In the CY 2009 PFS proposed rule, we
proposed to prohibit DME supplier
payment for a CPAP device if the
provider of a sleep test that is used to
diagnose obstructive sleep apnea (OSA)
in the Medicare beneficiary is the DME
supplier or an affiliate of the supplier of
the CPAP machine used to treat the
beneficiary’s sleep apnea. The proposal
applied to all sleep testing from
attended facility-based PSG to
unattended HST.
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 section
1834(j)(1)(B)(ii)(IV), which requires
suppliers of equipment and supplies to
‘‘meet such other requirements as the
Secretary may specify,’’ and due to our
concerns with respect to the potential
for unnecessary utilization of sleep
tests, we shall prohibit payment to the
supplier of the CPAP device when such
supplier, or its affiliate defined as a
person or organization that is related to
another person or organization through
a compensation arrangement or some
type of ownership, is directly or
indirectly the provider or the interpreter
of the unattended out of facility sleep
test that is used to diagnose a Medicare
beneficiary with OSA.
We considered several options. We
considered whether a narrower
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prohibition could reasonably
accomplish the purposes of this
regulation at this time. Exceptions for
providers that offer integrated disease
management models were considered.
We also considered allowing an
exception for nationally accredited
disease management programs but we
are unaware of any current model that
was encompass accreditation for both
OSA diagnosis and CPAP supply under
a single accreditation certificate.
Therefore, we proposed 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 also
proposed to add new definitions to
paragraph (a) to define ‘‘Continuous
positive airway pressure (CPAP)’’ and
‘‘sleep test’’ 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 as defined
above, is directly or indirectly related to
the provider of the sleep test that would
used to diagnose the beneficiary with
OSA.
In this final rule, in response to public
comment, we are adding additional
definitions for ‘‘affiliate’’, and ‘‘attended
facility-based polysomnogram’’, and
clarify the definitions of ‘‘Continuous
positive airway pressure (CPAP)’’, and
‘‘sleep test.’’ In addition, we are adding
a new paragraph (g), which would
create an exception to the prohibition
contained in (f) if the sleep test is an
attended facility-based PSG.
The following is a summary of the
comments we received and our
responses.
Comment: Many commenters
maintained that the prohibition is unfair
and that it ‘‘singles out’’ sleep
diagnostics and therapies for a special
payment prohibition. They maintain
that there is no evidence that sleep tests
promote ‘‘self interested’’ referrals any
more than do referrals from any other
diagnostic tests.
Response: We disagree. During the
process leading to the revised NCD, we
received many public comments
expressing concern that financial
incentives involving sleep test providers
being affiliated with CPAP suppliers
might very well lead to abusive
practices that would harm Medicare
beneficiaries and threaten the integrity
of the Medicare program.
As we noted above, testing for the
diagnosis of OSA will expand into
settings that are not regulated as health
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care facilities. CPAP for the treatment of
OSA differs from many other DME items
in several ways that are significant here.
The clinical symptoms that prompt the
use of CPAP, for example, snoring,
sleeplessness, daytime drowsiness,
generally occur in the home setting and
are self reported by the patient. The
physical findings of patients with OSA
are also seen in persons who do not
have OSA.
The diagnosis of OSA which may lead
to coverage of CPAP hinges upon the
results of a clinical examination and a
diagnostic test, the single night sleep
study. The interpretation of a sleep
study is subject to inter-interpreter
variability. Sleep study results are
known to vary from night to night and
are also technique dependent. Other
conditions for which Medicare covers
DME, for example chronic obstructive
pulmonary disease, are generally
diagnosed based on the combined
results of multiple tests such as chest xrays, arterial blood gas measurements
and pulmonary function tests. Thus it is
less likely that a diagnosis of OSA will
be supported by consistent findings
across multiple test platforms. We are
concerned that the provider of a sleep
test will have a bias to interpret an
inconclusive sleep test as positive if that
provider has a financial interest in the
payment for the CPAP device that
would be used to treat the beneficiary.
We believe that this represents a
vulnerability to the Medicare program.
We believe that we have sufficient
reason to believe that OSA and CPAP
are more amenable to fraud and abuse
than some other items and services. We
have seen program vulnerabilities in a
similar benefit, specifically oximetry
testing in the home for coverage of the
home use of oxygen. For example, our
local contractors informed us that
laboratories and DME suppliers were,
without an order from the treating
physician, initiating oximetry testing.
As a result, we acted to prohibit DME
suppliers from furnishing the oximetry
testing used in part to establish the
beneficiary’s eligibility for home oxygen
coverage.
Comment: Several commenters state
that the best models utilize high degrees
of coordination and affiliation. The
commenters claim that integrated care
models result in higher CPAP
compliance and better quality of care for
the patient. The commenters state that
the proposed rule would force
integrated sleep management programs
to refer beneficiaries to outside entities
for the CPAP device, thus creating a
break in continuity and accountability.
During the public comment period on
the proposed rule, several institutional
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stakeholders noted that if finalized
unchanged, the regulation would
essentially eliminate integrated sleep
management programs that furnish
coordinated management of OSA from
testing to therapy including provision of
CPAP. The commenters claimed that
these programs, all facility-based,
provide a level of patient support in
ensuring appropriate provision and
titration of CPAP that is not typical with
many DME suppliers. These programs
note that under this scenario they would
have reduced ability to monitor the
beneficiary’s compliance with CPAP,
including ensuring that the CPAP
device has been and continues to be
optimized for the individual
beneficiary. The commenters believe
that finalization of the proposed rule
would remove this option, thus they
believe leading to fragmented care, loss
of accountability and potential harm to
patients.
Response: Integrated sleep
management programs furnish
comprehensive diagnostic and
therapeutic services with a single
coordinated program that commonly
includes ongoing assessment of the
patient’s response to therapy and
modifications to therapy as needed.
If finalized as proposed, the
regulation would likely result in these
programs referring all beneficiaries to
outside DME suppliers for the CPAP
device, thus creating a break in
continuity of care.
This concern, which we recognize
with attended facility-based PSG
furnished in integrated sleep
management programs, is not applicable
outside of this setting. There is no
substantive claim of continuity of care
and coordinated disease management in
other settings where a sleep test
provider may have some other
relationship with a DME supplier.
Our administrative contractors
informed us that they have not
historically found these integrated sleep
management programs furnishing
attended facility-based PSG to be a
significant vulnerability. We cannot at
this time confidently exclude the
possibility that disrupting this model of
care might be harmful to some patients.
To avoid disrupting established
integrated sleep management programs,
this final rule with comment period will
not prohibit DME payment to suppliers
of CPAP to beneficiaries who have been
diagnosed with OSA using attended
facility-based PSG.
We are unaware of a reliable way to
prospectively distinguish bona fide
integrated sleep management programs
from other entities for the purposes of
this regulation. As we note below, there
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is no currently available accreditation
program under which an entity can,
under a single certificate, be accredited
for sleep diagnosis and the supply of
CPAP treatment. Thus we considered
how to balance these concerns and
minimize disruptions to continuity of
care while maintaining the necessary
protections for the Medicare program
and its beneficiaries.
We believe that creating an exception
for facility-based PSG strikes a
reasonable balance of these concerns. In
the context of OSA diagnosis and
treatment for Medicare beneficiaries
these integrated sleep management
programs have historically (before the
March 2008 NCD) used attended
facility-based PSG for OSA diagnosis, as
alternative diagnostic strategies did not
support Medicare coverage of the CPAP
device.
Excepting attended facility-based PSG
from the payment prohibition for CPAP
does not exempt HST furnished by the
same entity, that is, the exception is at
the test level not the program or facility
level. Thus, this final rule with
comment period avoids disrupting
established integrated sleep
management programs when they
furnish attended facility-based PSG
while affording the public more time to
propose alternatives.
Comment: Several commenters stated
that they would be forced to provide
supplementary, nonreimbursable
services to CPAP patients as a result of
the rule. Sleep clinicians point to the
fact that follow-up care of an OSA
patient is a requirement for AASM
accreditation. The commenters stated
that under the provisions of the
proposed rule, the DME supplier would
be reimbursed for the care, even when
the DME fails to furnish the follow up
care.
Response: We disagree. We expect
that treating physicians and other
recognized clinicians who evaluate and
manage beneficiaries’ sleep apnea
would continue to submit claims for
Medicare payment for the services that
they furnish. This rule does not prohibit
treating physicians from appropriately
providing follow up care to their
patients who use CPAP. A DME
supplier that is not also enrolled by
Medicare as a physician would not
furnish services that are properly within
the scope of practice of the beneficiary’s
physician, and we would not expect to
receive claims for Medicare payment for
such services.
Comment: Several commenters
suggested that accredited entities should
be exempt from the prohibition. Some
commenters have proposed that
facilities that have been accredited by a
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recognized accrediting body to provide
full diagnostic, therapeutic, and DME
services should have an exception from
the prohibition required as stated in the
proposed rule.
Response: We agree that an entity that
has been accredited by a recognized
sleep therapy accrediting body would
likely have protections in place that
would minimize the potential fraud and
abuse concerns we addressed above. We
believe that the scope of such
accreditation programs should be broad
enough to include OSA diagnosis and
the supply of CPAP treatment under a
unified certificate.
We have contacted JCAHO and AASM
(American Academy of Sleep Medicine)
to determine whether either has an
accreditation program that could be
applied to an integrated sleep
management program that includes
complete patient management to
include managing the DME. AASM
accredits sleep testing but not DME;
JCAHO has nonspecific criteria that
might be applied to the testing and DME
supplier separately. However, we are
unaware of any current model that
would encompass both under a single
accreditation certificate. One
commenter estimated that it would take
approximately 6 months to develop
such an accreditation framework. We
expect that it would take 1 to 2 years to
implement and accredit sufficient
programs to make this a viable
alternative.
Ideally, we would like to require that
all entities that furnish both sleep
testing and CPAP be accredited. We
solicit public input on accreditation
models that might support this option.
Once we are made aware of appropriate
accrediting models, we may readdress
this issue in future rulemaking.
Comment: Several commenters
expressed concern regarding the delays
from time of OSA diagnosis to time of
CPAP treatment that might arise if the
beneficiary is supplied CPAP from an
unaffiliated supplier. The commenters
believe that this will have an adverse
impact on the patient and will affect
their follow through related to the plan
of care.
Response: OSA is not an acute
condition. We are not aware of credible
evidence of serious harm due to delay
of days or weeks between OSA
diagnosis and CPAP treatment.
The attended facility-based PSG
testing paradigm may include same
night initiation and titration of CPAP
treatment. The final rule provides an
exception for attended facility-based
PSG. Thus, we believe that the
exception provides a reasonable option
should the beneficiary’s treating
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physician determine that there is a
pressing need for urgent treatment in
the case of an individual beneficiary.
Comment: Several commenters
believe that the adoption of this rule
would cause disruptions in care of OSA
treatments for patients in rural areas by
imposing new restrictions. These
commenters expressed wishes for a
Stark-like rural exception, based on
access to care arguments.
Response: Though various
commenters have compared the
provisions of this rule to the ‘‘Stark’’
rules, this rule is distinct from Stark and
addresses separate concerns.
We acknowledge that rural
beneficiaries are more likely to live at
greater distances from sleep facilities.
Thus, these beneficiaries would be more
likely to avail themselves of home sleep
testing if it were available.
We also note that the final rule allows
an exception for attended facility-based
PSG. Thus, when compared to Medicare
coverage before the March 2008 NCD
expansion, the final rule’s provisions in
this regard do not impose new
restrictions for Medicare beneficiaries
located in rural areas. Therefore we
believe that a specific rural exception is
not needed at this time.
Comment: Many commenters state
that existing fraud and abuse laws
adequately address abuses arising out of
affiliations. For example, the
commenters stated that the Stark
regulations do not allow a physician
who has a financial relationship
(ownership or compensation) with a
DME supplier to refer a patient to that
DME supplier for CPAP, unless an
exception applies. In addition,
commenters stated that under many
State regulations a physician cannot
have a substantial ownership interest in
a DMEPOS supplier and still refer
Medicare patients for DME. The
commenters also state that fraud and
abuse is prevented by other Medicare
provisions, such as those limiting
coverage of CPAP to a 12-week period
to identify beneficiaries diagnosed with
OSA who benefit from CPAP.
Response: We disagree. While Stark
and other statutes and rules, including
the Federal anti-kickback statute, afford
some protections, we believe this
regulation to be necessary in order to
further protect Medicare beneficiaries
from potential abusive practices and to
further reduce the Medicare program’s
vulnerability to fraud and abuse. We
believe that the payment prohibition for
CPAP in this rule will be applied to a
broader set of CPAP supplier
relationships than would be prohibited
under Stark. We here address additional
CPAP supplier relationships that do not
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necessarily depend on a relationship
with the beneficiary’s treating physician
who makes a referral, for example, a
relationship between a sleep test
provider and a DME supplier when the
provider of the sleep test is not the
beneficiary’s treating physician who
made the referral for the test.
Comment: One commenter stated that
this proposal is unlawful. First, the
commenter stated that general
rulemaking authority cannot support a
‘‘Stark-like’’ proposal such as the one
under consideration. Further, the
commenter states that the preamble
lacks sufficient facts or data to support
the statutory predicate under section
1871(a)(1) that the rule must be
‘‘necessary to carry out the
administration’’ of the Medicare
program. The commenter summarizes
their concerns by stating that the general
grant of rulemaking authority is not
plenary. The commenter also stated that
the rule is inconsistent with the Stark
statute and it’s implementing
regulations, which the commenter
asserted would not preclude a physician
from selling a CPAP device to his or her
patient if the physician is enrolled as a
DME supplier and personally furnishes
all of the services associated with the
provision of the CPAP. In addition, the
commenter concludes that this rule is in
direct contradiction to the Stark law
because, unlike the Stark law, this rule
does not contain an exception for
referrals made by a physician who has
an ownership or investment interest in
a ‘‘rural provider.’’
Response: We do not agree. Our
authority for promulgating this rule is
supported by two different provisions in
the Act. First, we believe that section
1871(a)(1) of the Act, which authorizes
the Secretary to ‘‘prescribe such
regulations as may be necessary to carry
out the administration of the insurance
programs under this title,’’ provides
sufficient authority for this regulation.
We believe that the prevention of fraud
and abuse in the provision of CPAP
devices is essential to the efficient
administration of the Medicare program.
While the use of unattended HSTs will
provide more beneficiaries with access
to diagnosis and treatment of OSA, we
are concerned that the increased
number of unattended HSTs will in turn
increase the potential for a test
provider’s affiliation with a CPAP
supplier to lead to overutilization as we
discussed above. We believe that the
administration of the Medicare program
includes a responsibility to protect the
program and its beneficiaries from the
harmful effects of fraud and abuse.
Second, we also believe that section
1834(j)(1)(B)(ii)(IV) of the Act, which
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requires suppliers of equipment and
supplies to ‘‘meet such other
requirements as the Secretary may
specify,’’ provides sufficient authority
for this regulation.
We also disagree with the
commenter’s assertion that a physician’s
furnishing of CPAP can easily escape
the purview of Stark and that this rule
therefore conflicts with the Stark law.
As we stated in the ‘‘Phase III’’ Stark
final rule, although personally
performed services are not a ‘‘referral’’
for Stark purposes, ‘‘the dispensing of
CPAP equipment by a physician would
almost always constitute a ‘‘referral’’
* * *, as would the dispensing of CPAP
equipment by anyone else affiliated
with the referring physician, such as a
nurse or physician assistant’’ (72 FR
51020). This is because a referring
physician claiming to personally
provide DME must personally furnish
the CPAP equipment as well as
personally perform all activities
necessary to satisfy the DME supplier
standards. Thus, in all but the rarest of
circumstances, the prohibition
promulgated under this final rule does
not conflict with the Stark prohibition
as applied to physicians who refer for
and furnish CPAP in their own medical
practices. Moreover, given our general
rulemaking authority and our authority
under section 1834(j)(1)(B)(ii)(IV) of the
Act, we are not prevented from
regulating the provision of CPAP in
those unusual circumstances in which
Stark is not implicated because there
has been no ‘‘referral.’’
Similarly, we do not agree with the
commenter’s assertion that this rule
conflicts with the Stark prohibition
because it does not contain an exception
for referrals made by a physician who
has an ownership or investment interest
in a ‘‘rural provider.’’ Under the Stark
statute, section 1877(d)(2) of the Act,
there ‘‘shall not be considered to be an
ownership or investment interest * * *
[i]n the case of designated health
services [including DME, such as CPAP]
furnished in a rural area (as defined in
section 1886(d)(2)(D)) by an entity, if
* * * substantially all of the designated
health services furnished by the entity
are furnished to individuals residing in
such a rural area.’’ Thus, Stark is not
implicated in those circumstances.
Nevertheless, we are not precluded from
using other authority to limit or prohibit
payment for items and services that are
provided in a manner that does not
implicate Stark. Notwithstanding Stark,
we have authority under sections
1871(a)(1) and 1834(j)(1)(B) of the Act to
issue this rule.
Comment: One commenter stated
concerns that the rule will limit
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appropriately trained and qualified
DMEPOS suppliers’ ability to furnish
home sleep tests. The association claims
that the rule creates unnecessary and
artificially high barriers to DMEPOS
suppliers’ ability to furnish services that
are uniquely within their area of
expertise. The commenter stated that
the DME business model is premised on
the ability to furnish medical equipment
to patients in their homes and DMEPOS
suppliers may be the only providers
with the immediate capacity to furnish
HST to Medicare beneficiaries.
Response: Only the physician treating
the beneficiary can order a HST and
prescribe CPAP therapy. We expect that
the sleep test would be interpreted by a
physician, and we do not believe CPAP
suppliers should be paid for supplying
CPAP equipment when an affiliated
physician has interpreted the HST or
ordered the equipment. We are not
persuaded that DME suppliers have any
uniquely valuable expertise in the
provision of diagnostic testing.
Comment: Many commenters claimed
the regulation will result in an under
availability of CPAP equipment and
services in many communities. One
commenter explained that IDTFs are
now permitted to utilize HST to
diagnose OSA, but point out that the
vast majority of IDTFs do not have the
resources and infrastructure needed to
deliver or pick-up HST equipment to
and/or from the beneficiary’s home. The
commenter requested that CMS furnish
a detailed analysis on beneficiary access
to CPAP supplies and services locally
before implementing such a provision.
Response: This rule does not prohibit
IDTFs from establishing and
maintaining sufficient resources and
infrastructure to deliver or pick up
HSTs, so long as the DME supplier who
will be furnishing the CPAP to the
beneficiary as a result of the HST is not
the same DME supplier that the IDTF
has affiliated with for purposes of
delivering or picking up the HSTs or
performing other functions related to
providing the HST. In addition, the
exception we are providing for attended
facility-based PSG is sufficient to
maintain beneficiary access at historical
levels before the 2008 NCD.
Comment: One commenter stated that
the mission of all nonprofit healthcare
systems includes furnishing care for the
under and un-insured populations. The
commenter stated that healthcare
systems would no longer furnish sleep
tests to the under and uninsured if the
healthcare system is prohibited from
furnishing CPAP devices to Medicare
beneficiaries.
Response: It is not clear to us why a
nonprofit would refuse to offer HSTs to
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the under- or uninsured simply because
the nonprofit entity cannot use an
affiliated DME supplier to furnish a
CPAP device prescribed after the HST.
We note that health care entities can
continue to provide CPAP when
prescribed as a result of an attended
facility-based PSG.
Comment: One commenter points to
guidance issued in mid 2002, where
CMS recognized a separation between a
hospital system and its ownership of a
DME business (otherwise referred to as
a Hospital-based supplier). By enacting
this provision, the commenter
concludes that CMS would no longer
recognize this separation. The
commenter concludes that this
provision, if enacted, would result in
other prohibitions for follow-up care
following a diagnostic test.
Response: We disagree with the
commenter’s conclusion, and we note
that the final rule’s exemption of
attended facility-based PSG would
likely apply to many hospital affiliated
sleep programs.
Comment: Several commenters stated
that there is a clear conflict of interest
for the provider of the test to also profit
from the provision of the CPAP therapy.
Response: We appreciate the
supportive comments.
Comment: Several commenters wrote
that physicians who work for hospitals
are under increasing pressure to
generate revenue by conducting more
tests and prescribing CPAP through a
hospital owned DME supplier. Other
commenters claim that bonus payments
are made to physician’s who prescribe
CPAP through a hospital owned DME
supplier. These commenters favor the
payment prohibition.
Response: We appreciate the overall
concerns expressed by the commenters
about pressure on physicians, but we
wish to minimize the disruption to
programs that were in place prior to the
March 2008 NCD expansion of coverage.
We believe that an exemption for
attended facility-based PSG is a
reasonable balance between beneficiary
access and protection at this time.
Comment: Several commenters
support a payment prohibition where
the diagnostic test facilities are not
permitted to provide the CPAP and
related supplies. According to the
commenters, the DMEPOS suppliers
claim to possess a higher degree of
sophistication surrounding CPAP
technologies and related supplies by
focusing exclusively on the technologies
rather than on the sleep diagnostics.
Response: We appreciate the
supportive comment on the proposed
regulation. However we have been
persuaded for reasons described above
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to except attended facility-based PSG
from the payment prohibition for CPAP.
Comment: Several commenters stated
that hospital-owned DME qualifies as a
monopoly, and results in an unfair
competitive advantage for hospitals and
large sleep centers. The commenters
favor the payment prohibition and state
that such a prohibition is good for small
businesses.
Response: Business monopoly is
beyond the scope of this regulation and
we will not discuss it here.
Comment: Several commenters stated
that the term ‘‘affiliate’’ is ambiguous,
and that the proposed rule is vague and
overly broad in its use of the terms
‘‘affiliate’’ and ‘‘directly or indirectly’’.
The commenters requested that CMS
provide a clear definition of ‘‘affiliate’’.
The commenters stated that without
clear definitions from CMS it is
impossible to discern what types of
affiliations CMS intends to preclude
under the rule or how the proposed rule
would apply to any given set of
circumstances. One commenter
recommended that a definition of
affiliate be common ownership of
greater than 50 percent of the supplier
of the CPAP device.
Response: We define ‘‘affiliate’’ as a
person or organization that is related to
another person or organization through
a compensation arrangement or some
type of ownership.
We have defined a provider of sleep
test as an individual or entity that
directly or indirectly administers and/or
interprets the test and/or furnishes the
sleep test device. By indirect we mean
that one or more intermediary actors are
used to accomplish the sleep test to its
end. For example, if a DME supplier
contracted with a sleep test provider to
furnish HST, that supplier would
indirectly provide the HST. Directly
providing the test means there are no
intermediary actors—no intervening
persons or entities between them.
Comment: One commenter requested
that sleep labs be permitted to develop
criteria to gauge the competency of the
DME. Further, the commenter requested
that sleep labs be permitted to use such
criteria to discriminate against DME
companies who fail to perform at an
acceptable level of competency.
Response: We believe that this
concern can be addressed through the
development and implementation of
accreditation standards. Ideally, we
would like to require that all entities
furnishing sleep tests in any settings in
addition to supplying CPAP be
accredited. Once we are made aware of
appropriate accrediting models, we will
readdress the issue in future
rulemaking.
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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 section
1834(j)(1)(B)(ii)(IV), which requires
suppliers of equipment and supplies to
‘‘meet such other requirements as the
Secretary may specify,’’ and due to our
concerns with respect to the potential
for unnecessary utilization of sleep
tests, we shall prohibit payment to the
supplier of the CPAP device when such
supplier or its affiliate is directly or
indirectly the provider of the HST that
is used to diagnose a Medicare
beneficiary with OSA.
We considered several options. We
considered whether a narrower
prohibition could reasonably
accomplish the purposes of this
regulation at this time. Exceptions for
providers that offer integrated sleep
management programs were considered.
We also considered allowing an
exception for nationally accredited
disease management programs but we
are unaware of any current model that
would encompass accreditation for both
OSA diagnosis and CPAP supply under
a single accreditation certificate.
After reviewing the public comments,
we are finalizing the prohibition in
§ 424.57 as proposed but with an
exception for attended facility-based
PSG. Excepting facility-based PSG from
the prohibition on providing CPAP
would not except HST performed by the
same entity, that is, the exception is at
the test level not the facility level. We
plan to solicit public input on
accreditation models that might support
future exceptions to this prohibition.
We add additional definitions for
‘‘affiliate’’, ‘‘attended facility-based
polysomnogram,’’ and clarify the
definitions of ‘‘Continuous positive
airway pressure (CPAP)’’ and ‘‘Sleep
test’’.
3. Beneficiary Signature for
Nonemergency Ambulance Transport
Services
In the CY 2008 PFS final rule with
comment period (72 FR 66406), we
created an additional exception to the
beneficiary signature requirements,
applicable for emergency ambulance
transports, in § 424.36(b)(6). The
exception allows ambulance providers
and suppliers to sign on behalf of the
beneficiary, at the time of transport (that
is, the time during which the
beneficiary is picked up and dropped
off at the receiving facility), provided
that certain documentation
requirements are met. To take advantage
of the exception at § 424.36(b)(6), an
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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 and 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 (72 FR 66324), 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). 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
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 do not anticipate an
increased risk of fraud or program abuse
if the exception in § 424.36(b)(6) is
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extended to include nonemergency
transports, we proposed to revise
§ 424.36(b)(6) to refer specifically to
nonemergency transports. We also
proposed 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
proposed 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.
We received comments that urged us
to eliminate entirely the beneficiary
signature requirement where a
beneficiary is mentally or physically
incapable of signing a claim and no
other person authorized to sign a claim
on behalf of the beneficiary is available
or willing to sign at the time of
transport. In addition, the commenters
stated that the proposed documentation
requirements would be costly and
burdensome to ambulance providers
and suppliers. Several commenters
objected to our proposal to amend
§ 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
upon one of the exceptions in 424.36(b).
We are adopting our proposals, with
modification. Specifically, we are
amending the exception in
§ 424.36(b)(6) to include nonemergency
ambulance transports. We are also
amending § 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. We are revising
§ 424.36(b)(6)(ii)(C)(2) to include
secondary forms of verification from
either a hospital or a facility.
The following is a summary of the
comments we received and our
responses.
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Comment: The majority of
commenters stated that it is a burden on
ambulance providers and suppliers to
obtain a signature for nonemergency
ambulance transports when a
beneficiary is mentally incapable of
signing the ‘‘waiver.’’ The commenters
contended that asking for additional
documentation to verify that a patient
was transported creates a financial
burden on the ambulance provider. One
commenter stated that its billing office
has to do more mailings, follow-up calls
and faxes to get a ‘‘waiver’’ completed,
and that spouses are reluctant to sign
the form for fear that they will be
responsible for the ambulance transport
bill. The commenter also stated that the
forms are confusing to its ambulance
crew and that hospital and
rehabilitation representatives are
reluctant to sign forms. One commenter
suggested that checking hospital and
rehabilitation bills would be an easier
way to document a patient transport,
whereas another commenter suggested
that we should abolish the signature
requirement entirely.
Response: We note that whereas
several commenters referred to a
‘‘waiver’’ of the signature requirement of
§ 424.36, in fact § 424.36 sets forth a
signature requirement and alternative
means of satisfying the signature
requirement. That is, § 424.36 generally
requires that the beneficiary sign the
claim, unless the beneficiary is deceased
or unavailable to sign the claim, in
which case other individuals or entity
representatives (as enumerated in
§ 424.36(b), (c) and (d)) may sign the
claim. We are adopting our proposal to
amend § 424.36(a) to clarify that ‘‘the
claim’’ includes the actual claim form or
such other form that contains adequate
notice to the beneficiary or other
authorized individual signing on behalf
of the beneficiary 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. The purpose of the
beneficiary signature is to verify that the
services were in fact rendered and were
rendered as billed.
Our proposal does not impose any
new burdens on ambulance providers or
suppliers, but rather offers an optional,
alternative method, for satisfying the
beneficiary signature requirement. We
do not agree with the commenters that
it is a significant burden on ambulance
providers and suppliers to comply with
the proposed signature and
documentation requirements in order to
meet the proposed exception for
nonemergency ambulance transports
when a beneficiary is incapable of
signing a claim form; however, those
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ambulance providers and suppliers that
believe that the signature and
documentation requirements of the new
exception at § 424.36(b)(6) are
burdensome may avail themselves of the
other means specified in § 424.36 for
satisfying the beneficiary signature
requirement.
In response to the assertion that the
forms are confusing, we reiterate that we
did not create any new forms for
ambulance personnel or facility staff to
sign. Ambulance providers or suppliers
may use whatever forms they wish
(such as the patient care trip report, etc.)
for capturing the signature and
documentation requirements specified
in § 424.36(b)(6). In response to the
assertion that spouses are reluctant to
sign a form for fear that they will be
responsible for the ambulance transport
bill, signing of the claim form (or such
other form used as a proxy for the claim
form) does not make a person
financially liable to pay the provider or
supplier. However, if a beneficiary or
the beneficiary’s authorized
representative refuses to sign the claim
form, the ambulance company may bill
the beneficiary directly for the transport
service. In addition, if the transport
service is deemed not medically
necessary, and thus is not covered by
Medicare, the beneficiary may be held
responsible for payment (subject to the
limitation of liability provisions of
section 1879 of the Act and our
regulations at §§ 411.404).
We are not persuaded to adopt the
suggestion that we eliminate entirely the
beneficiary signature requirement for
ambulance transports. We are concerned
that there may be an increased risk of
fraud or program abuse if we were to
remove the signature requirement.
Moreover, we did not propose to
eliminate the signature requirement and
therefore may lack the authority to
abolish the requirement through this
final rule even if we were otherwise
inclined to do so. With respect to the
suggestion that we should check
hospital and rehabilitation bills to
document a patient transport (which is
tantamount to suggesting that we
eliminate the signature requirement), we
do not agree that it should be the
program’s responsibility, at the time of
processing the claim, to guess whether
the beneficiary would have authorized
the claim if asked, or to have to secure
documentation from providers and
suppliers (which, to the extent that they
have not furnished the transport, may
not be required to supply us with such
documentation and may even be
precluded by privacy laws from
supplying us with such documentation).
Accordingly, we believe providers and
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suppliers should go on record, at the
time of submitting the claim, that the
beneficiary (or someone authorized on
his behalf) authorized the filing of the
claim.
Comment: Several commenters noted
that, in light of our proposal to expand
the (b)(6) exception to include
nonemergency ambulance transports as
well as emergency ambulance
transports, the signature requirements
may apply when a beneficiary is being
transported from or to skilled nursing
facilities, hospitals and other
permissible destinations. Therefore, the
commenters requested that we revise
§ 424.36(b)(6)(ii)(C)(2), which makes
reference to ‘‘the hospital registration/
admission sheet’’, ‘‘the hospital log’’, or
‘‘other internal hospital records,’’ and
replace ‘‘hospital’’ with ‘‘facility.’’
Response: We agree with the
commenter that there may be
nonemergency transports where the
beneficiary is being transported from or
to skilled nursing facilities, hospitals
and other permissible destinations.
Thus, we are revising
§ 424.36(b)(6)(ii)(C)(2) to replace
‘‘hospital’’ with ‘‘hospital or other
facility’’.
Comment: One commenter requested
that we clarify whether secondary forms
of verification must be signed by a
representative of the receiving facility.
In response to a similar request for
clarification in the CY 2008 PFS final
rule (72 FR 66323) we stated that
secondary forms of verification did
require a signature; however, this
requirement was not included in the
text of § 424.36(b)(6)(ii)(C)(2), as
finalized in the CY 2008 PFS final rule.
The commenter also stated that
hospitals are moving toward electronic
recordkeeping, and urged us to clarify
that secondary forms of documentation
used to verify transport do not need to
be signed by a representative of the
facility, provided that the form of
documentation obtained is an official
facility record that clearly indicates the
name of the patient, and the date and
time the patient was received by or
transported from that facility.
Response: We acknowledge that,
although the preamble language in the
CY 2008 PFS final rule stated that all
forms of secondary documentation used
to verify transport need to be signed by
a representative of the receiving facility,
the regulation text at § 424.36(b)(6), as
published in the 2008 CY PFS final rule,
did not include this specific
requirement. We are clarifying
§ 424.36(b)(6)(ii)(C)(2)to provide that
secondary forms of documentation used
to verify transport do not need to be
signed by a representative of the
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receiving facility if the form of
documentation obtained is an official
hospital or facility record, (such as the
facility or hospital registration/
admissions sheet, patient medical
record, facility or hospital log, or other
facility or hospital record), and it
documents the beneficiary’s name, date,
and time the beneficiary was received
by that facility.
Comment: Several commenters
objected to our proposal to clarify
§ 424.36(a) to state that a provider or
supplier must make ‘‘reasonable efforts
to locate and obtain the beneficiary’s
signature’’ before a provider or supplier
could rely upon one of the exceptions
set forth in § 424.36(b)(1) through (5).
Response: We are not adopting our
proposal because, having reexamined
the issue, we believe that the current
language in § 424.36(b)(5) provides
adequate protection for the beneficiary
and the Medicare program. Prior to, and
during the course of, the CY 2008 PFS
rulemaking, we were alerted to the fact
that some ambulance providers and
suppliers were signing the claim on
behalf of the beneficiary simply because
the beneficiary was not able to sign the
claim at the time of transport. We
clarified in the preamble to the CY 2008
PFS final rule with comment period that
signing the claim on behalf of the
beneficiary simply because the
beneficiary was not able to sign the
claim at the time of transport was not
proper and, further, that only providers
(and not suppliers) are eligible to use
the exception at § 424.36(b)(5). Our
decision to make an exception to the
requirement that reasonable efforts must
be made to obtain the signature of the
beneficiary, by creating a new exception
at § 424.36(b)(6) in the CY 2008 PFS
final rule with comment period for
emergency ambulance transports, and in
this final rule for nonemergency
ambulance transports, and to allow the
provider or supplier to sign the claim on
behalf of the beneficiary at the time of
the service, provided certain safeguards
are met, was a deliberate departure from
the general rule. However, because we
amended § 424.36(b)(5) in the CY 2008
PFS final rule with comment period to
state that, before relying on that
exception, providers must ‘‘mak[e]
reasonable efforts to locate and obtain
the signature of one of the individuals
specified in paragraph (b)(1), (2), (3) or
(4) of this section,’’ rather than to state
that the provider must first make
reasonable efforts to locate and obtain
the signature of the beneficiary, we are
concerned that we might create
confusion or add an unneeded degree of
complexity if we were to finalize our
proposal to amend § 424.36(a) to state
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that a provider or supplier must make
reasonable efforts to locate and obtain
the beneficiary’s signature before a
provider or supplier could rely upon
one of the exceptions set forth in
§ 424.36(b)(1) through (5). By requiring
providers and suppliers to not sign
claims on behalf of the beneficiary
under § 424.36(b)(5) without having first
made reasonable efforts to procure the
signature of the beneficiary or an
authorized individual, we address our
core concerns. It is true that, as clarified,
our regulations allow providers and
suppliers to procure the signature of an
authorized individual in a situation
where the beneficiary may be only
temporarily unable to sign the claim,
but, on balance, we believe it is
preferable, for the sake of convenience,
to give providers and suppliers some
flexibility as to whether they obtain the
signature of the beneficiary or that of an
authorized individual. With respect to
ambulance providers and suppliers, the
matter of making reasonable efforts to
locate and obtain the signature of the
beneficiary or another authorized
individual should largely be moot.
Ambulance providers and suppliers
should be able to rely on the exception
at § 424.36(b)(6) to sign the claim in the
case of both emergency and
nonemergency transports, provided they
meet the documentation requirements
therein. To the extent that ambulance
providers and suppliers do not wish to,
or are unable to, comply with the
documentation requirements of
§ 424.36(b)(6), they may obtain the
signature of an authorized individual
specified at § 424.36(b)(1) through (b)(4)
(including in the situation where one of
the authorized individuals is available
and willing to sign at the time of
transport). Moreover, an ambulance
provider (but not a supplier), may rely
on the exception at § 424.36(b)(5) to,
itself, sign the claim, after having made
reasonable efforts (including over a
reasonable period of time) to locate and
obtain the signature of either the
beneficiary or an authorized individual.
Comment: Several commenters
requested that we make the new
exception in § 424.36(b)(6) for
nonemergency transports retroactive to
January 1, 2008. Commenters also asked
us to clarify in this final rule and/or in
guidance on the CMS Web site that we
will not take any adverse action against
an ambulance provider or supplier that
made good faith (but unsuccessful)
attempts to comply with the beneficiary
signature requirement rules prior to
January 1, 2009. The commenters stated
that, despite multiple attempts to obtain
the required signatures from the
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beneficiary or the beneficiary’s
authorized representative, many
ambulance providers and suppliers have
been unsuccessful, and thus, they are
holding claims for nonemergency
transports. The commenters also
asserted that ambulance providers and
suppliers have experienced difficulty in
obtaining signatures from facility
representatives because of concerns that
their signature would render the facility
financially liable for the transport.
Response: We are not making the new
exception in § 424.36(b)(6) for
nonemergency ambulance transports
retroactive to January 1, 2008, and are
not making an exception for good faith
efforts to comply with the regulation as
it existed prior to this final rule with
comment period. There would be
significant legal issues if we were to
make the rule retroactive to January 1,
2008 or to waive the requirements as
they existed prior to this final rule.
Moreover, apart from the legal
constraints, we are not persuaded that
either course of action is warranted. The
CY 2008 PFS final rule did not create
any new burden for ambulance
providers and suppliers (and, to the
contrary, made it easier for ambulance
providers and suppliers to comply with
the beneficiary signature requirement
for emergency transports). It did,
however, clarify our longstanding policy
that providers and suppliers must make
reasonable efforts to obtain the
beneficiary’s signature before submitting
the claim and that it was not sufficient
for providers to submit the claim
(utilizing the exception at § 424.36(b)(5))
simply because the beneficiary was able
to sign the claim at the time of transport.
We also clarified that only providers,
and not suppliers, may utilize the
exception at § 424.36(b)(5), consistent
with the plain language of the
exception. To the extent that, following
the November 27, 2007 final rule,
ambulance providers and suppliers have
found it difficult to obtain the
beneficiary’s signature for
nonemergency transports (because they
had not previously been following our
rules), we have addressed their concerns
in two ways. First, on July 24, 2008, we
placed guidance on the CMS Web site
at https://www.cms.hhs.gov/
AmbulanceFeeSchedule/downloads/
Guidance_On_Beneficiary_Signature_
Requirements_for_Ambulance_
Claims.pdf that reiterated our position
that ambulance providers and suppliers
may utilize the exception at
§ 424.36(b)(4), which allows facilities to
sign on behalf of the beneficiary, and
explained that such facilities do not
assume liability for payment of the
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69863
services simply by signing on behalf of
the beneficiary. Second, in this final
rule we are finalizing our proposal to
expand the exception in § 424.36(b)(6)
to nonemergency transports. The new
exception is effective for ‘‘claims’’ filed
on or after January 1, 2009. Therefore,
if claims have been held and are still
within the timely filing limit, as
specified in § 424.44, the claims may be
submitted to Medicare for payment in
accordance with the new exception.
Comment: A commenter
recommended that the existing language
in § 424.36(b)(6)(ii)(A) be modified to
state that, in the case of an emergency
transport, the general crew signature on
an emergency ambulance incident
report is sufficient to meet the
requirements of § 424.36(b) and that a
separate crew signature is not required.
The commenter suggested, as an
alternative, that if we determine that the
signature of an ambulance employee
present during the transport is
necessary, it should be sufficient if the
employee signature on the incident
report is obtained ‘‘after the fact,’’ rather
than contemporaneous with the
transport. The commenter stated that it
is necessary that we allow signatures
obtained after the transport because the
ambulance crew’s primary concern is
taking care of the patient, not doing
paperwork, such as a signed incident
report.
Response: We are not persuaded to
modify the requirement in
§ 424.36(b)(6)(ii)(A) to state that the
general crew signature on an incident
report is sufficient and that a separate
crew signature is not required. We
believe that the commenter’s suggestion
that any member of the general crew be
permitted to sign the incident report as
evidence that the service was rendered
as billed would not satisfy our integrity
concerns, because the general crew
member would have no direct
knowledge regarding the transport
services. It is also our understanding
that the ambulance crew completes a
trip report that describes the condition
of the beneficiary, treatment, origin/
destination, etc. Therefore, we believe it
would be a minimal burden upon the
ambulance crew signing the incident or
trip report to prepare a statement
detailing why the beneficiary is unable
to sign a claim form at the time of
transport. We also emphasize that
§ 424.36(b)(6)(ii)(A) requires that a
contemporaneous statement signed by
an ambulance employee present during
the trip be obtained. A
contemporaneous statement, rather than
one obtained after the fact, is necessary
to meet our integrity concerns, that is,
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to verify that the trip took place as
claimed on the bill.
Comment: Several commenters
suggested that we eliminate the terms
‘‘emergency and nonemergency
ambulance transport services’’ in
§ 424.36(b)(6) and replace those words
with ‘‘ambulance services.’’
Response: We are not persuaded to
revise § 424.36(b)(6) in the manner
suggested by the commenters. Although
readers familiar with the Federal
Register publications of the CY 2008
PFS final rule and the CY 2009 PFS
final rule would realize that ‘‘ambulance
services’’ would refer to both emergency
and nonemergency transports, we wish
the regulation text that will appear in
the CFR to be clear on its own,
particularly to readers who may be
accessing the regulation years from now.
Therefore, we believe it is preferable to
retain the proposed language
‘‘emergency and nonemergency
ambulance transport services’’ so as to
leave no doubt that both emergency and
nonemergency transports are covered by
the exception in § 424.36(b)(6).
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4. Solicitation of Comments and Data
Pertaining to Physician Organ Retrieval
Services
Since 1987, we have limited the
amount an Organ Procurement
Organization (OPO) may reimburse a
physician for cadaveric kidney donor
retrieval services. Chapter 27 of the
Provider Reimbursement Manual (CMS–
Pub. 15–1) limits the payment to a
physician for cadaveric kidney retrieval
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 solicited public
comments and data that are reflective of
organ retrieval service costs. We did not
limit our solicitation to costs associated
with kidney retrieval services, but rather
stated that we are interested in receiving
comments and data pertaining to
retrieval services for all types of organs.
We indicated that we may use this
information to determine the extent to
which a recalculation of the payment for
cadaveric organ retrieval services
furnished by a physician is warranted
and to inform any future rulemaking on
this subject. Any future rulemaking
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would provide for notice and public
comment.
We received four timely public
comments in response to our request for
information and data for use in updating
the organ retrieval physician payment
amount included in organ acquisition
costs. The following is a summary of the
comments we received and our
responses.
Comment: The commenters believed
that the kidney retrieval rate of $1,250
per donor is insufficient and three of the
commenters recommended that we
increase that limit by either the
Consumer Price Index for all urban
consumers (CPI–U) or the Medicare
Economic Index. Two commenters
stated that little or no data on actual
organ retrieval services exists, and that
any rulemaking without such data
would be inappropriate. The
commenters stated that due to the
extreme variability associated with
these services, they had serious
concerns as to the feasibility of
establishing an accurate cost or payment
for organ retrieval using an approach
like that employed by the AMA’s
Relative Value Scale Update Committee
(RUC). According to the commenters,
there are specific factors impacting the
cost of organ retrieval including donor
evaluation, travel and wait time, dry
runs and other risks and costs. These
factors contribute to the great variability
in measuring the time and expense
associated with organ retrieval services.
These commenters offered to assist us in
establishing a process to collect data for
the purpose of updating the organ
retrieval rates. One commenter stated
that the retrieval rate should be paid per
kidney and not per donor.
Response: We thank the commenters
who responded to our solicitation of
comments and appreciate the offer that
some made to be involved in future
efforts to design a revised payment
method. We are not inclined to propose
that the base organ retrieval rate for
kidneys and other organs simply be
increased by an indexed amount (such
as the CPI–U) because we believe the
base payment amounts for retrieval of
the various organs may need to be
updated. Therefore, we are again
soliciting information from the
transplant community. Specifically we
would like to obtain information on the
physician effort and resources required
to procure an organ. These resources
include surgical time, dry runs (number
and percentage of retrievals in which an
organ is not recovered), travel and wait
times, as well as the incremental time
required for extended criteria donors
and donors after cardiac death.
Additionally, because currently we limit
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kidney retrieval physician
reimbursement to $1,250 per donor, we
would need resource information to
determine the difference in procuring
one kidney or a pair of kidneys from a
single donor in order to determine a
payment on a per kidney basis as
suggested by a commenter.
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
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
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
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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 proposed to revise
§ 405.874(b)(2) from, ‘‘ The revocation of
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.’’
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
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15:01 Nov 18, 2008
Jkt 217001
contractor determined that the provider
or supplier was no longer operational.’’
In addition, to ensure consistency, we
proposed to revise § 424.535(f)
(redesignated as § 424.535(g)) 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 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.’’
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 solicited 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) 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.
In addition, we solicited 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.
The following is a summary of the
comments we received and our
responses.
Comment: Several commenters
recommended that we withdraw our
proposed changes to the appeals
process.
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69865
Response: We disagree with these
commenters because we continue to
believe that we should not make further
payments to physicians and NPPs who
have had their State medical license
suspended or revoked, were convicted
of a felony as described in
§ 424.535(a)(3), were excluded or
debarred from participating in a Federal
program, or were determined by CMS or
its contractor not to be operational.
Comment: One commenter urged
CMS to require contractors to send
revocation notices in an effective
manner that would establish a date of
receipt and the recipient.
Response: While this comment is
outside the scope of the proposed rule,
Medicare contractors are instructed to
mail revocation notices to the
correspondence address of the provider.
Comment: One commenter
recommended that we create an
expedited reconsideration process of not
more than 30 days in cases where
revocation is based on CMS/contractor
error.
Response: While we have considered
establishing an expedited
reconsideration process for those cases
in which Medicare revoked billing
privileges due to a Federal exclusion or
debarment, a felony conviction as
described in § 424.535(a)(3), a State
license suspension or revocation, or the
practice location is determined by CMS
or our contractor not to be operational,
we do not believe that an expedited
reconsideration process is warranted.
Comment: One commenter stated that
our proposal to make revocation
effective with limited notice and appeal
rights in certain situations is a violation
of due process.
Response: While we agree that
physicians, NPPs and physician and
NPP organizations will receive limited
notice when CMS or our contractor
revokes Medicare billing privileges due
to State licensure suspension/
revocation, Federal debarment or
exclusion, felony convictions as
described in § 424.535(a)(3), or when a
practice location is found to no longer
to be in operation, we disagree with this
commenter’s statement that we are
violating due process rights. Physicians,
NPPs, and physician and NPP
organizations are afforded identical
appeal rights as any other provider or
supplier whose Medicare billing
privileges were revoked.
Comment: One commenter stated that
retroactive revocation creates a situation
where Medicare denies payment for
services physicians have furnished in
good faith reduces the time available for
appeal and then locks the physician out
of Medicare for at least a year.
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Response: We disagree with this
commenter. Whenever a physician or
NPP’s State medical license is
suspended or revoked, is convicted of
felony as described in § 424.535(a)(3),
excluded or debarred from participating
the Federal exclusion or debarment, or
is determined by CMS or our contractor
not to be operational, we believe that
the payments to these practitioners
should immediately cease.
Comment: One commenter suggested,
at the very least, current rights of appeal
should be preserved for all proposed
denials and we should actively research
the performance of its contractors in
auditing clinicians who make ‘‘all or
substantially all of their clinical
encounters in the patient’s home,’’ and
give provider feedback a defined role in
the evaluation and subsequent award of
contracts to intermediaries.
Response: This comment is outside
the scope of this proposed rule and can
not be addressed in this final rule.
After reviewing public comments, we
are finalizing § 405.874(b)(2) to state
‘‘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 as
described in § 424.535(a)(3), 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.’’ We are also
finalizing § 424.535(f) (redesignated as
§ 424.535(g)) to state ‘‘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 revocations, or if 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
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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 continue to believe that
revocations such as felony convictions
and license suspensions or revocations
are determinations that 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 action. 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 revocations, 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
except for those revocation
determinations imposed under
§ 424.535(a)(2), (a)(3), and (a)(5).
6. Physician Resource Use Feedback
Program
a. General Background
CMS’ Office of the Actuary estimates
that the Medicare PFS allowed charges
have grown approximately 55 percent
from 2000 to 2007.1 The Medicare
1 CMS
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Payment Advisory Commission
(MedPAC) reports that since 2000, total
Medicare spending for physicians’
services has climbed more than 9
percent per year.2 In addition to these
rapid increases in cost, the Dartmouth
Atlas (https://www.dartmouthatlas.org/)
shows that there is significant
geographic variation in the amount of
services Medicare beneficiaries receive,
with little or no relationship to
outcomes.2 We are implementing valuebased purchasing (VBP) initiatives in
response to these concerning trends.
VBP ties payment to performance
through the use of incentives based on
measures of quality and cost of care.
The implementation of VBP will
transform CMS from 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 Data 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
the Physician Group Practice
Demonstration.
In its March 2005 Report to Congress,
MedPAC recommended that CMS use
Medicare claims data to measure
physicians’ resource use and share the
results confidentially with physicians to
educate them about how their resource
use compares with aggregated peer
performance. MedPAC envisioned that
resource use measurement and feedback
could encourage physicians to reduce
the volume and intensity of the services
they provide without sacrificing quality
of care, thereby improving efficiency.3
In response to this MedPAC
recommendation, we launched a study
to develop resource use reports (RURs),
in early 2006, with an initial focus on
high cost imaging services. In Stage I of
this study, we developed RURs for
physician referral and utilization
patterns for echocardiograms, along
with a concentration on
echocardiograms for patients with
congestive heart failure. We worked
with two healthcare systems in
2 Assessing Alternatives to the Sustainable
Growth Rate System. Medicare Payment Advisory
Commission Report to Congress. March 2007.
https://www.medpac.gov/documents/
Mar07_SGR_mandated_report.pdf.
3 Medicare Payment Policy. Medicare Payment
Advisory Commission Report to Congress. March
2005. Chapter 3. https://www.medpac.gov/
documents/Mar05_EntireReport.pdf.
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Madison, WI and Cleveland, OH to
recruit physicians for the study. We
used Medicare fee-for-service (FFS)
claims data for the recruited physicians
to populate RURs. Based on the
feedback received during stage I, we
redesigned the RURs (stage II) and
focused on magnetic resonance imaging
and computerized tomography imaging.
For stage II, the RURs were modified to
incorporate clinical guidelines into the
reports. The construct of the RURs
included in stages I and II of the study
is similar to the RURs that are
described, in detail, in section 6.c. of
this final rule.
Building on its March 2005
recommendation, MedPAC
subsequently released an additional
report on the topic of measuring
physician resource use. In its June 2006
Report to Congress, MedPAC focused on
commercial episode grouper products.
In that report, MedPAC addressed such
issues as: risk adjustment, attribution
(assignment) of cost per episode to
individual physicians, and variation in
resource use across geographic areas.
MedPAC tested two commercially
available episode grouper products,
Episode Treatment Groups (ETGs) and
Medical Episode Groups (MEGs), using
Medicare fee-for-service claims data.4
The ETG product is owned by Ingenix
and ‘‘identifies and classifies an entire
episode of care regardless of whether
the patient has received medical
treatment as an outpatient, inpatient, or
both.’’ 5 The MEG product is owned by
Thomson and ‘‘groups inpatient,
outpatient, and pharmaceutical claims
into clinically homogenous units of
analysis called episodes that describe a
patient’s complete course of care for a
single illness or condition.’’ 6
In 2006, we awarded a contract to
Acumen LLC, to explore how the ETGs
and MEGs handle Medicare FFS claims
data. In addition to Acumen’s technical
episode grouper analysis, we are also
pursuing a contract with Kennell, LLC
to analyze selected claims grouping
algorithms within each of these
commercial episode grouper products.
Both of these research contracts are
currently underway.
The Government Accountability
Office (GAO) has also addressed
physician resource use. In their April
2007 report, GAO compared the
4 Increasing the Value of Medicare. Medicare
Payment Advisory Commission Report to Congress.
June 2006. Chapter 1. https://www.medpac.gov/
documents/Jun06_EntireReport.pdf.
5 Ingenix Product Sheet. https://www.ingenix.com/
content/attachments/ETG_ProductSheet.pdf.
6 Thomson Product Sheet. https://
home.thomsonhealthcare.com/uploadedFiles/docs/
MEG_HP_TH10002.pdf.
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resource use of physician practices with
that of their peers and specifically
focused on outliers. In their report, GAO
recommended that CMS develop a
system to identify physicians with
inefficient practice patterns and provide
confidential feedback to improve
efficiency.7
A number of other entities have also
been developing approaches to
measuring and reporting on physician
resource use, including the National
Quality Forum, the National Committee
for Quality Assurance, the Quality
Alliance Steering Committee, and the
AQA-Alliance.
b. Statutory Authority
Section 131(c) of the MIPPA amends
section 1848 of the Act by adding
subsection (n), which requires the
Secretary to establish and implement by
January 1, 2009, a Physician Feedback
Program using Medicare claims data and
other data to provide confidential
feedback reports to physicians (and as
determined appropriate by the
Secretary, to groups of physicians) that
measure the resources involved in
furnishing care to Medicare
beneficiaries. If determined appropriate
by the Secretary, the Secretary may also
include information on quality of care
furnished to Medicare beneficiaries by
the physician (or group of physicians) in
the reports. We have titled this initiative
the physician resource use feedback
program.
Under section 1848(n)(1)(B) of the
Act, resource use may be measured on
an: (i) Episode basis, (ii) per capita
basis, or (iii) on both an episode and a
per capita basis. In addition, to the
extent practicable, data for reports shall
be based on the most recent data
available. Section 1848(n)(4) authorizes
the Secretary to focus the application of
the program as appropriate, such as
focusing the program on: (1) Physician
specialties that account for a certain
percentage of all spending for
physicians’ services; (2) physicians who
treat conditions that have a high cost, of
a high volume, or both; (3) physicians
who use a high amount of resources
compared to other physicians;
(4) physicians practicing in certain
geographic areas; or (5) physicians who
treat a minimum number of individuals.
In addition, section 1848(n)(5)
authorizes the Secretary to exclude
certain information regarding a service
from a report with respect to a physician
(or group of physicians) if the Secretary
determines that there is insufficient
7 Focus on Physician Practice Patterns Can Lead
to Greater Program Efficiency. April 2007. https://
www.gao.gov/new.items/d07307.pdf.
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69867
information relating to that service to
provide a valid report on that service.
Finally, under section 1848(n)(6), to the
extent practicable, the Secretary shall
make appropriate adjustments to the
data used to prepare RURs, such as
adjustments to take into account
variations in health status and other
patient characteristics.
c. Implementation of Section
1848(n)(1)(B)
In April 2008, we awarded a contract
to Mathematica Policy Research to assist
in the development of physician
resource use measures and confidential
feedback reports. The purposes of the
contract were to: (1) Develop
meaningful, actionable, and fair
measures of resource use for physician
practices with the ultimate goal of using
the measures in CMS’ VBP initiatives;
and (2) provide feedback and education
to encourage more efficient provision of
services. The Mathematica contract
contains the following tasks:
(1) Development of resource use
measures based on both an episode of
care (ETG & MEG) and per capita
analysis; (2) risk adjustment of Medicare
FFS claims data for patient severity of
illness; (3) development of
methodologies to attribute both episodes
and total cost of care for a beneficiary
to individual physicians and multiple
physicians; (4) development of
benchmarks for peer comparison; (5)
populate RURs with Medicare FFS data
for several medical specialties; (6)
recruit physicians to confidentially
share the feedback reports; and (7)
submit all documentation and
production programming logic to allow
for a possible national dissemination of
RURs to physicians. The work
performed and derived from this
contract is the basis for establishing the
program required under section 1848(n)
of the Act, which we will refer to as the
‘‘Physician Resource Use Feedback
Program.’’
The Physician Resource Use Feedback
Program will consist of multiple phases.
Under this approach, each phase of the
program will inform future phases of the
Program. The tasks listed above
comprise phase I of the feedback
program. To date, CMS has
disseminated RURs in two program
sites: Baltimore, MD (August 2008) and
Boston, MA (September 2008).
Baltimore was selected as a program site
due to its close proximity to the CMS
central office and Boston was selected
as a program site due to its high per
capita Medicare costs and utilization
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rates.8 We refer readers to a detailed
discussion of the Baltimore and Boston
program sites below. Any additional
Phase I activities completed for the
Physician Resource Use Feedback
Program will be similar to activities
completed in Baltimore and Boston,
including the same methodologies for:
(1) Choosing additional program sites,
(2) recruitment of physicians, and (3)
construction of RURs. We are
implementing Phase I of the Physician
Resource Use Feedback Program on an
interim final basis with comment period
and it is CMS’ intent to propose
subsequent phases of the program
through rulemaking.
As indicated above, section
1848(n)(1)(B) of the Act requires that the
physician resource feedback program
address resources measured on: (1) An
episode basis; (2) a per capita basis; or
(3) both an episode and a per capita
basis. The RURs used in the Baltimore
program site used a per capita analysis
for measuring cost of care and the RURs
used in the Boston program site used
both a per capita and an episode of care
analysis for measuring cost of care.
Accordingly, we are implementing this
approach to resource measurement on
an interim final basis and solicit
comments on this approach, as well as
the following additional questions:
• Are per capita resource use
measures meaningful and actionable?
• Are episode-based resource use
measures meaningful and actionable?
• Are composite measures of resource
use that combine episodes of care
valuable?
We also provided the Baltimore and
Boston physicians with a cost of service
category breakdown (for example,
imaging services, inpatient admissions,
or outpatient services) for both the per
capita and episode of care analyses. We
are finalizing this approach and
welcome public comment on including
cost of service categories to capture
Medicare FFS claims data, as well as
other ways to capture data in the
Physician Resource Use Feedback
Program. In particular, we are soliciting
comment on the following:
• What cost of service categories are
most meaningful and actionable?
Section 1848(n)(3) of the Act, requires
that, to the extent practicable, the data
for the reports shall be based on the
most recent data available. In Phase I of
the Physician Resource Use Feedback
Program, we are using Medicare FFS
claims data from 2004–2007, which is
currently the most recent data available.
8 Dartmouth Atlas of Healthcare. 2005 Medicare
reimbursement figures derived from Hospital
Service Area (HSA).
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The per capita analysis used in both
Baltimore and Boston included
Medicare FFS claims data for calendar
year 2005. The episode of care analysis
used in Boston included Medicare FFS
claims data for calendar years 2004–
2006. Typically, when an episode of
care analysis is used, one calendar year
of data is used as a focal year (in this
case 2005) and the prior year (2004) and
following year (2006) are also included
to ensure the episode captures any
services that may occur just outside of
a calendar year. We are implementing
and soliciting comment on this
approach to data for Phase I, as well as
seeking comments on the following:
• How many years of data should be
included for a per capita analysis?
• How many years of data should be
included for an episode of care analysis?
As explained above, under section
1848(n)(4) of the Act, the Secretary may
focus the application of the program as
appropriate, including focusing on
physicians who treat conditions that are
high cost, a high volume, or both. CMS
has identified several priority
conditions that are high cost, high
volume, or both through an analysis of
Medicare FFS claims data. The reports
disseminated in the Baltimore and
Boston program sites included the
following conditions: (i) congestive
heart failure; (ii) chronic obstructive
pulmonary disorder; (iii) prostate
cancer; (iv) cholecystitis; (v) coronary
artery disease with acute myocardial
infarction flare-up; (vi) hip fracture; (vii)
community-acquired pneumonia; and
(viii) urinary tract infections.
Under section 1848(n)(4) of the Act,
we also are permitted to focus the
application as appropriate on physician
specialties that account for a certain
percentage of all spending for
physicians’ services. Based upon the
high cost and high volume conditions
selected above, CMS identified the
several medical specialties as being the
most relevant specialties for treating
those conditions. The RURs
disseminated in the Baltimore and
Boston program sites included the
following physician specialties: internal
medicine, cardiology, gastroenterology,
general practice, orthopedic surgery,
medical oncology, urology,
pulmonology, family practice, and
primary care. We are implementing the
focus of Phase I of the Program on the
above conditions and medical
specialties on an interim final basis and
we welcome public comments on the
selected conditions and medical
specialties, as well as any additional
conditions and medical specialties to
include in the feedback program.
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To select physicians, CMS recruited
participants for the Baltimore and
Boston program sites based on selfdesignated medical specialty. Both the
Baltimore and Boston sites included
physicians from all of the medical
specialties listed above. Once
physicians agreed to participate in the
Baltimore and Boston program sessions,
CMS used Medicare physician
identifiers to find Medicare FFS claims
data to populate individual physician
RURs for the participating physicians.
Approximately 50 physicians
participated in a 60-minute individual
in-depth session with one interviewer
that covered approximately 4 different
RUR designs. Each one-on-one
physician/interviewer session educated
the physician on his/her individual
Medicare FFS resource utilization. In
the cases where Medicare FFS data was
available, a de-identified report of real
data was used for educational purposes.
The RURs contained all of the elements
discussed throughout section 6.c of this
final rule. In particular, we are soliciting
public comments on the following:
• Do physicians prefer paper or
electronic feedback reports?
• How do physicians prefer to
provide comments on or ask questions
about the RURs?
• What other types of the outreach/
educational efforts are useful in helping
physicians understand resource use?
As mentioned previously, section
1848(n)(4) of the Act permits us to focus
the program as appropriate, such as
focusing the program on physicians
practicing in certain geographic areas.
The RURs disseminated in Baltimore
included a geographic benchmark for all
physicians treating one condition (listed
above) in the Baltimore-Washington, DC
metro area, as defined by zip codes. The
Baltimore program site also used
hospital service area (HSA) as a
geographic benchmark. The HSA was
based upon all hospitals in the
Baltimore-Washington, DC metro area
that physicians typically refer
beneficiaries to for a particular
condition. The Boston program site also
used the HSA benchmark and used the
state of Massachusetts as a benchmark.
We welcome public comment on the
selected geographic benchmarks
implemented for those areas, as well as
any additional geographic benchmarks
that could be included in the Physician
Resource Use Feedback Program.
Section 1848(n)(4) of the Act also
permits us to focus the program as
appropriate, such as on physicians who
use a high amount of resources
compared to other physicians. The
RURs disseminated in Baltimore and
Boston contained distribution curves
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that defined peer groups of physicians
for one condition using the specialty
and geographic benchmarks mentioned
above. Within each peer group, a
physician was identified as a high cost
outlier if he/she fell within the 90th
percentile of cost or higher. In addition,
to including a high cost benchmark, the
Baltimore and Boston RURs included a
low cost (10th percentile) benchmark
and a median cost (50th percentile)
benchmark. We are implementing this
approach and welcome public comment
on the cost benchmarks, as well as any
additional cost benchmarks that could
be included in the program. Further, we
are soliciting public comment on which
benchmarks (specialty, geography, and
cost) are most likely to motivate changes
in resource use.
In order to identify a high cost outlier,
attribution of cost must be assigned to
a physician. In the Baltimore and
Boston program sessions, CMS provided
RURs that contained several different
methodologies for attribution or
assignment of costs to physicians. The
following five attribution rules were
included: (i) Physician billing the most
Evaluation and Management (E&M)
visits and billing for at least 10 percent
of the total cost for a beneficiary or an
episode of care; (ii) physician billing the
most established E&M visits (chronic
conditions only); (iii) assign all cost to
each physician billing for any E&M or
procedure; (iv) assign cost to each
physician in proportion to billed visits;
and (v) assign cost to the physician
billing the first E&M visit (acute
episodes only). In our continued
distribution of RURs through phase I,
we will continue to update and refine
our attribution rules. We are soliciting
comments on this approach and the
following:
• What criteria should be taken into
account to ensure equity when
considering attribution rules?
Finally, although the statute
authorizes the Secretary to focus the
application of the program as
appropriate, on physicians who treat a
minimum number of individuals and
authorizes us to provide feedback to
groups of physicians, as determined
appropriate by the Secretary, we did not
exercise these optional provisions in the
Baltimore and Boston program sites and
are not finalizing these in Phase I of the
program. In addition, section 1848(n)(6)
of the Act also requires that
adjustments, to the extent practicable,
take into account variations in health
status and other patient characteristics.
This type of adjustment was not
practicable due to the complexity of risk
adjustment tasks, coupled with the short
implementation time from passage of
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MIPPA legislation to the start date of the
Baltimore and Boston program sites. We
welcome public comment on factors to
consider for establishing minimum
thresholds, risk adjustment
methodologies, and measuring group
practice level resource use.
III. Medicare Improvements for
Patients and Providers Act of 2008
(MIPPA) Provisions
The following section addresses
certain provisions of the Medicare
Improvements for Patients and
Providers Act of 2008 (MIPPA) (Pub. L.
110–275). Except as noted otherwise
within this final rule with comment
period, we consider these provisions to
be self-implementing. We are revising
our policies and regulations as
described below in order to conform
then to the statutory amendments.
A. Section 101: Improvements to
Coverage of Preventive Services
1. Improvements to Coverage of
Preventive Services
Over the past 25 years, the Congress
has added specific preventive and
screening services to the voluntary Part
B program. Most of the preventive or
screening services that are already
covered under Medicare are described
in 42 CFR part 410, subpart B, and also
as exceptions to statutory exclusions in
§ 411.15. These preventive and
screening services include the
following:
• Pneumococcal, influenza, and
hepatitis B vaccinations (§ 410.57 and
§ 410.63);
• Pap smear (section 1861(nn) of the
Act);
• Screening mammography
(§ 410.34);
• Colorectal cancer screening tests
(§ 410.37);
• Screening pelvic exams (§ 410.56);
• Prostate cancer screening tests
(§ 410.39);
• Glaucoma screening exams
(§ 410.23);
• Ultrasound screening for abdominal
aortic aneurysms (AAA) (§ 410.19);
• Cardiovascular disease screening
tests (§ 410.17);
• Diabetes screening tests (§ 410.18);
and
• The initial preventive physical
examination (IPPE) (§ 410.16).
Section 101(a) of the MIPPA provides
for coverage under Part B of ‘‘additional
preventive services’’, which are
determined to meet certain
requirements, effective for services
furnished on or after January 1, 2009.
Section 101(a) of the MIPPA provides
the Secretary with the authority to add
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69869
coverage of ‘‘additional preventive
services’’, and specifies the process and
the criteria that are to be used in making
determinations regarding the coverage
of such services under the Part B
program. As provided in the law, this
new coverage allows payment for
‘‘additional preventive services’’ not
otherwise described in Title XVIII of the
Act, if the Secretary determines through
the national coverage determination
(NCD) process (as defined in section
1869(f)(1)(B) of the Act) that the new
services meet statutory requirements for
coverage.
Specifically, section 101(a) of the
MIPPA defines ‘‘additional preventive
services,’’ as services not otherwise
described in title XVIII that identify
medical conditions or risk factors and
that the Secretary determines are—
(1) Reasonable and necessary for the
prevention or early detection of an
illness or disability;
(2) Recommended with a grade of A
or B by the United States Preventive
Services Task Force; and
(3) Appropriate for individuals
entitled to benefits under Part A or
enrolled under Part B.
The U.S. Preventive Services Task
Force (USPSTF) is an independent
panel of experts in primary care and
prevention that systematically reviews
the evidence of effectiveness and
develops recommendations for clinical
preventive services, under the
sponsorship of HHS’ Agency for
Healthcare Research and Quality
(AHRQ). The USPSTF grades the
strength of the evidence from ‘‘A’’
(strongly recommends), ‘‘B’’
(recommends), ‘‘C’’ (no
recommendation for or against), ‘‘D’’
(recommends against), or ‘‘I’’
(insufficient evidence to recommend for
or against).
In addition, section 101(a) provides
that in making national coverage
determinations (NCDs) for the coverage
of a new service, the Secretary ‘‘may
conduct an assessment of the relation
between predicted outcomes and the
expenditures for such service and may
take into account the results of such
assessment in making such
determination.’’
We plan to evaluate the preventive
services not otherwise described in title
XVIII of the Act and that have been
recommended with a grade A or B by
the USPSTF and determine whether to
open an NCD on one or more of them.
USPSTF currently has 15 to 20
preventive services with a Grade A or B
recommendation that may be
appropriate for the Medicare
population. These services can be found
on its Web site at https://
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www.preventiveservices.ahrq.gov. We
may exclude reviewing any one of these
services if: (1) There is an existing
Medicare screening or preventive
benefit for that particular service; (2) the
service does not appear to be
appropriate for the Medicare population
(for example, pediatric services). We
invite public requests on the services on
the USPSTF list that CMS should
consider for an NCD using the
procedures described at https://
www.cms.hhs.gov/DeterminationProces/
02_howtorequestanNCD.asp.
The NCD process consists of three
major steps: (1) Initiation; (2) review;
and (3) completion. We initiate the NCD
process by ‘‘opening’’ the NCD. This is
announced to the public by posting a
‘‘tracking sheet’’ on the CMS Coverage
Web site with an initial 30-day public
comment period. The public will have
another opportunity to comment on the
NCD when the proposed decision is
published. After taking into
consideration all of the public
comments and evidence, a final
decision will be made public.
Development of a complete, formal
request for an NCD can be initiated
either by an outside party or internally
by CMS staff.
We are establishing new § 410.64,
Additional Preventive Services, to
reflect these statutory requirements. To
conform the regulations to the statutory
requirements of the MIPPA, we are also
adding new paragraph § 411.15(k)(15)
for ‘‘additional preventive services.’’
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Payment of Co-Insurance
Section 101(a)(2) of the MIPPA
establishes payment rules under Part B
if the Secretary makes a NCD for an
additional preventive service under
section 1861(ddd) of the Act. The
amount of the Part B payment and the
amount of the beneficiary’s Part B
coinsurance will depend on the nature
of the new preventive service. For
instance, if the additional preventive
service is a clinical diagnostic
laboratory test, Medicare pays on a fee
schedule basis and the amount paid is
100 percent. There is no beneficiary
coinsurance. For all other additional
preventive services, Medicare will pay
80 percent of the lesser of the actual
charge for the service or the amount of
the fee schedule. The beneficiary would
be responsible for the remaining 20
percent as coinsurance. We will
specifically identify the type of service
and the accompanying payment levels
in our implementing instructions that
will be issued contemporaneously with
each NCD.
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2. Revisions to Initial Preventive
Physical Examination (IPPE)
Section 101(b) of the MIPPA also
amended section 1861(ww)(1) of the Act
which establishes an IPPE for
individuals who are newly enrolled in
the voluntary Part B program. This
benefit was originally effective on
January 1, 2005, and is implemented at
§ 410.16. Section 101(b) of the MIPPA
revises the benefit by the following:
(1) Adding the measurement of an
individual’s body mass index as part of
the IPPE;
(2) Upon the individual’s consent,
adding end-of-life planning to the IPPE
services; and
(3) Removing the electrocardiogram
from the list of mandated services that
must be included in the IPPE benefit,
and making it an educational,
counseling, and referral service to be
discussed with the individual and
ordered by the physician, if necessary.
Section 101(b) of the MIPPA also
amended section 1861(ww)(1) of the Act
by defining the term ‘‘end-of-life
planning’’ to mean verbal or written
information regarding (1) an
individual’s ability to prepare an
advance directive in the case that an
injury or illness causes the individual to
be unable to make health care decisions,
and (2) whether or not the physician is
willing to follow the individual’s wishes
as expressed in an advance directive.
We are amending § 410.16(a)(4) (the
physical exam element) of the IPPE
benefit so that it includes the
measurement of an individual’s body
mass index. We are amending
§ 410.16(a)(5) to omit the
electrocardiogram as a mandatory part
of the IPPE benefit, and add the
electrocardiogram to the list of
education, counseling, and referral
services described in § 410.16(a)(7) of
the IPPE benefit.
We are also amending § 410.16(a)(5)
by inserting in the place of the term
‘‘electrocardiogram’’ the language ‘‘endof-life planning’’ and noting the need for
the consent of the individual to have
this discussion.
We are also amending § 410.16(a) of
the IPPE benefit by adding a definition
of the term ‘‘end-of-life planning’’ to
reflect the statutory definition of that
term as described above.
Section 101(b) of the MIPPA also
amended section 1861(ww)(1) of the Act
(the IPPE benefit) by adding the
‘‘additional preventive services’’ benefit
to the list of screening and preventive
services for which physicians and other
qualified nonphysician practitioners
must provide ‘‘education, counseling
and referral.’’ The Congress also
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extended the time period that newly
eligible Part B beneficiaries can obtain
the IPPE benefit from 6 months to the
first 12 months after the effective date
of their first Part B coverage period.
Therefore, we are amending
§ 410.16(a)(7) to reflect the additional
education, counseling and referral
responsibilities that physicians and
other practitioners will have under the
IPPE benefit for the electrocardiogram
and the ‘‘additional preventive services’’
that may be covered in the future.
As mentioned above, the Congress
extended the eligibility period for
beneficiaries from 6 months to 1 year as
provided in section 1862(a)(1)(K) of the
Act. This statute is effective for services
furnished on or after January 1, 2009.
We are revising the present definition of
the term ‘‘eligible beneficiary’’ in
§ 410.16(a) to read as follows: ‘‘Eligible
beneficiary’’ means an individual who
receives his or her IPPE not more than
1 year after the effective date of his or
her first Medicare Part B coverage
period.
3. Payment for IPPE
In order to implement section 101(b)
of the MIPPA, beginning January 1,
2009, we will pay for an IPPE performed
not later than 12 months after the date
of the beneficiary’s initial enrollment in
Medicare Part B. We will pay for one
IPPE per beneficiary per lifetime. The
Medicare deductible does not apply to
the IPPE if performed on or after January
1, 2009.
The section 101(b) of the MIPPA also
removes the screening
electrocardiogram (EKG) as a mandatory
requirement as identified in section
1861(ww)(1) of the Act as part of the
IPPE. The MIPPA requires that there be
education, counseling, and referral for
an EKG, as appropriate, for a once-in-a
lifetime screening EKG performed as a
result of a referral from an IPPE as stated
in revised § 410.16. Effective for
beneficiaries who receive the IPPE on or
after January 1, 2009, the screening EKG
will be billable with G code(s) when it
is a result of a referral from an IPPE.
Billing instructions for physicians,
qualified NPPs, and providers will be
issued.
We are implementing the following G
codes to identify these services:
• G0402: Initial preventive physical
examination; face-to-face visit, services
limited to new beneficiary during the
first 12 months of Medicare enrollment.
• G0403: Electrocardiogram, routine
ECG with at least 12 leads; performed as
a screening for the initial preventive
physical examination with
interpretation and report.
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• G0404: Electrocardiogram, routine
ECG with at least 12 leads; tracing only,
without interpretation and report,
performed as a screening for the initial
preventive physical examination.
• G0405: Electrocardiogram, routine
ECG with at least 12 leads;
interpretation and report only,
performed as a screening for the initial
preventive physical examination.
The 4 existing G codes (G0344,
G0366, G0367, and G0367) will be
active until December 31, 2008, for
beneficiaries who have the IPPE prior to
January 1, 2009.
Work RVUs: We believe the additional
work of performing a measurement of an
individual’s body mass index and, upon
consent of an individual, the discussion
of end-of-life planning, as described in
the coverage section, represent minimal
work. A simple tool is used to
determine body fat based on an
individual’s height and weight that
applies to both adult men and women.
End-of-life planning as previously
described is verbal or written
information given to the beneficiary
regarding advance directive preparation
and a discussion regarding whether the
physician is willing to follow an
individual’s wishes made in an advance
directive.
Therefore, for CY 2009, we are
retaining the current work RVUs for the
new IPPE G code (G0402) which
involves equivalent resources and work
intensity to those services contained in
CPT evaluation and management (E/M)
code 99203, new patient, office or other
outpatient visit. However, we are
interested in receiving comments on
suggested valuations of this service to
reflect the resources required. We will
also retain the work RVUs for the new
EKG G codes which are equivalent to
those for CPT codes 93000, 93005 and
93010. In addition, we note that the
policy for reporting a medically
necessary E/M service furnished at the
same IPPE visit will still apply. CPT
codes 99201 through 99215 may be used
depending on the circumstances and
appended with CPT modifier ‘‘25’’
identifying the E/M visit as a significant,
separately identifiable service from the
IPPE code G0402.
We do not believe this scenario will
be the typical occurrence and we will
monitor utilization patterns involving
the level 4/5 new or established office
or other outpatient visit codes being
reported with the IPPE. If there are
consistent data that demonstrate high
usage of level 4/5 E/M codes in
conjunction with the IPPE, we will
reevaluate the policy.
Additionally, since section 101(b) of
the MIPPA provides that the Medicare
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Part B deductible will not apply for the
IPPE performed on or after January 1,
2009 (as defined in section 1861(ww)(1)
of the Act), we are revising § 410.160(b)
to include an exception from the
Medicare Part B deductible for the IPPE
as described in § 410.16 (Initial
preventive physical examination:
Conditions for and limitations on
coverage). The co-insurance continues
to apply.
B. Section 131: Physician Payment,
Efficiency, and Quality Improvements
Section 131 of the MIPPA includes a
number of provisions that impact the
quality reporting system defined in
section 1848(k) of the Act. For ease of
reference, we have named this quality
reporting system, the ‘‘Physician
Quality Reporting Initiative’’ (PQRI).
Although the new MIPPA amendments
that pertain to the PQRI, including those
provisions that pertain to PQRI beyond
2009, are generally described below, the
scope of this final rule with comment
period is limited to the 2009 PQRI. The
2009 PQRI, including our
implementation of the new MIPPA
amendments as they pertain to the 2009
PQRI, is discussed in detail in section
II.O1. of this final rule with comment
period. This final rule with comment
period does not address nor does it
attempt to implement any of the new
MIPPA amendments as they pertain to
the PQRI in 2010 and beyond. The new
MIPPA amendments as they pertain to
the PQRI in 2010 and beyond will be
addressed through future notice and
comment rulemaking.
Section 131(b)(1) of the MIPPA
amends section 1848(k)(2) of the Act to
add new paragraph (C), which provides
that for the purposes of reporting quality
measures for covered professional
services furnished during 2010 and
subsequent years for the PQRI, the
quality measures (including electronic
prescribing measures) shall be such
measures selected by the Secretary from
measures that have been endorsed by
the entity with a contract with the
Secretary under subsection 1890(a) as
added by the MIPPA. Section
1848(k)(2)(C) of the Act also provides
that for the 2010 and future years of the
PQRI, in the case of a specified area or
medical topic determined appropriate
by the Secretary for which a feasible and
practical measure has not been endorsed
by the entity with a contract under
subsection 1890(a), as added by the
MIPAA, the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
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identified by the Secretary, such as the
AQA-Alliance.
Paragraph (D) of section 1848(k)(2) of
the Act, as added by section 131(b)(1) of
the MIPPA, requires that for each
quality measure (including an electronic
prescribing quality measure) adopted by
the Secretary for the PQRI in 2009 and
subsequent years, the Secretary shall
ensure that eligible professionals have
the opportunity to provide input during
the development, endorsement, or
selection of measures applicable to the
services they furnish. Additional
discussion of the requirements of
section 1848(k)(2)(D) of the Act as they
pertain to the 2009 PQRI can be found
in section II.O1. of this final rule with
comment period.
Section 131(b)(2) of the MIPPA
redesignates section 101(c) of the MIEATRHCA, as amended by the MMSEA, as
subsection (m) of the Act. Section
1848(m)(1) of the Act authorizes the
Secretary to make incentive payments
for satisfactorily reporting data on
quality measures for covered
professional services furnished by
eligible professionals during the
reporting period for the PQRI in 2007
through 2010. In addition to the 1.5
percent incentive payment already
authorized for the 2007 and 2008 PQRI,
section 1848(m)(1)(B) of the Act, as
redesignated by section 131(b)(2) of the
MIPPA and amended by section
131(b)(3)(B) of the MIPPA, authorizes
the Secretary, for the 2009 and 2010
PQRI, to provide an incentive payment
equal to 2.0 percent of the estimated
total allowed charges submitted not
later than 2 months after the end of the
reporting period for all covered
professional services furnished during
the reporting period for 2009 and 2010,
respectively.
Section 1848(m)(3)(A) of the Act, as
redesignated by section 131(b)(3)(C) of
the MIPPA and amended by section
131(b)(3)(D)(iii) of the MIPPA, specifies
that for 2009 and subsequent years, the
PQRI quality measures shall not include
electronic prescribing measures.
Therefore, as discussed further in
section II.O1. of this final rule with
comment period, we are not including
measure #125, Health Information
Technology: Adoption/Use of
Medication e-Prescribing, in the final set
of 2009 PQRI quality measures.
Section 1848(m)(3)(C) of the Act, as
added by section 131(b)(3)(D)(iv) of the
MIPPA, requires that ‘‘by January 1,
2010, the Secretary shall establish and
have in place a process under which
eligible professionals in a group practice
(as defined by the Secretary) shall be
treated as satisfactorily submitting data
on quality measures’’ for the PQRI ‘‘if,
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in lieu of reporting measures under
section 1848(k)(2)(C) of the Act the
group practice reports measures
determined appropriate by the
Secretary, such as measures that target
high-cost chronic conditions and
preventive care, in a form and manner,
and at a time, specified by the
Secretary.’’ Section 1848(m)(3)(C) of the
Act also provides for the use of a
statistical sampling model to submit
data on measures, such as the model
used under the Physician Group
Practice demonstration project, and
provides that incentive payments made
to a group practice for satisfactorily
submitting data on quality measures for
the PQRI shall be made in lieu of the
incentive payments that would
otherwise be made to eligible
professionals in the group practice for
satisfactorily submitting data on quality
measures. The requirements at section
1848(m)(3)(c) of the Act also apply to
successful electronic prescribers (as
defined in section 1848(m)(B)(ii) of the
Act), which are described generally in
section III.D. and in detail in section
II.O2. of this final rule with comment
period.
Section 1848(m)(3)(D) of the Act, as
added by section 131(b)(3)(D)(iv) of the
MIPPA, authorizes the Secretary, in
consultation with stakeholders and
experts, to revise the criteria for
satisfactorily reporting data on quality
measures for the PQRI and for
submitting data on electronic
prescribing quality measures for years
after 2009.
Section 1848(m)(5)(D)(iii) of the Act,
as redesignated by section 131(b)(2) of
the MIPPA and amended by section
131(b)(3)(E) of the MIPPA, provides that
if the Secretary has determined an
eligible professional (or group practice)
has not reported measures applicable to
covered professional services of such
professional (or group practice), the
Secretary shall not pay the incentive
payment, and that if an incentive
payment has already been made to an
eligible professional (or group practice),
the Secretary shall recoup such
payments from the eligible professional
(or group practice).
Subparagraph (G) of section
1848(m)(5) of the Act, as added by
section 131(b)(3)(E)(v) of the MIPPA,
requires the Secretary to post on the
CMS Web site, in an easily
understandable format, a list of the
names of: (1) The eligible professionals
(or group practices) who satisfactorily
submitted data on quality measures for
the PQRI; and (2) the eligible
professionals (or group practices) who
are successful electronic prescribers.
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Section 1848(m)(6)(C) of the Act, as
redesignated by section 131(b)(2) of the
MIPPA and amended by section
131(b)(3)(F) of the MIPPA, defines
‘‘reporting period’’ for the 2008 through
2011 PQRI to be the entire year and
authorizes the Secretary to revise the
reporting period for years after 2009 if
the Secretary determines such ‘‘revision
is appropriate, produces valid results on
measures reported, and is consistent
with the goals of maximizing scientific
validity and reducing administrative
burden.’’
Section 131(b)(4) of the MIPPA
amends section 1848(k)(3)(B) of the Act
to include a qualified audiologist (as
defined in section 1861(ll)(3)(B) of the
Act) in the definition of an ‘‘eligible
professional’’ beginning with the 2009
PQRI.
Section 131(b)(6) of the MIPPA
provides that none of the amendments
made by subsection 131(b) or section
132 of the MIPPA shall affect the
operation of the provisions of section
1848(m) of the Act, with regard to 2007
or 2008.
Further discussion of these MIPPA
provisions as they relate to the 2009
PQRI can be found in section II.O1. of
this final rule with comment period.
In addition to the provisions that
impact the PQRI, section 131(a) of the
MIPPA amended section 1848(d)(8) of
the Act to extend the 6-month increase
in the CY 2008 CF to the entire year and
added section 1848(d)(9) of the Act
which provided that the update to the
single CF for CY 2009 shall be 1.1
percent. This subsection further
specified that the CFs for CY 2010 and
subsequent years must be computed as
if these increases had never applied.
Further discussion of these MIPPA
provisions as they relate to the PFS
update and CF for 2009 can be found in
sections VII. and IX. of this final rule
with comment period.
C. Section 131(c): Physician Resource
Use Feedback Program
Section 131(c) of the MIPPA amends
section 1848 of the Act by adding
subsection (n), which requires the
Secretary to establish and implement by
January 1, 2009, a Physician Feedback
Program using Medicare claims data and
other data to provide confidential
feedback reports to physicians (and as
determined appropriate by the
Secretary, to groups of physicians) that
measure the resources involved in
furnishing care to Medicare
beneficiaries. If determined appropriate
by the Secretary, the Secretary may also
include information on quality of care
furnished to Medicare beneficiaries by
the physician (or group of physicians) in
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the reports. In addition, section 131(c)
of the MIPPA outlines the general
components and aspects of the program,
but provides the Secretary broad
discretion with regard to
implementation and development of the
program. Given the timing of the
passage of MIPPA and the deadline for
implementing a program, we believe it
would be contrary to the public interest
to delay implementation and therefore,
we will implement the physician
feedback program on an interim final
basis and provide opportunity for public
comment. We refer readers to section
II.S.6. of this final rule with comment
period for a detailed discussion and
implementation of section 131(c) of the
MIPPA.
D. Section 132: Incentives for Electronic
Prescribing
Section 132(a)(1) of the MIPPA
amends section 1848(m) of the Act, as
redesignated by section 131(b)(2) of the
MIPPA, to authorize for 2009 through
2013 incentives to eligible professionals
or group practices who are ‘‘successful
electronic prescribers.’’ For 2009 and
2010, the Secretary is authorized to
provide successful electronic
prescribers an incentive payment equal
to 2.0 percent of the total estimated
allowed charges submitted not later
than 2 months after the end of the
reporting period for all covered
professional services furnished during
the 2009 and 2010 reporting periods,
respectively. Reduced incentive
payments apply to subsequent years
through 2013. Section 132(b) of the
MIPAA amends section 1848(a) of the
Act such that a payment differential
applies to those who are not successful
electronic prescribers starting in 2012.
During 2012 or any subsequent year, if
the eligible professional is not a
successful electronic prescriber for the
reporting period, the fee schedule
amount for covered professional
services furnished by such professional
during the year shall be reduced by:
• 1.0 percent for 2012.
• 1.5 percent for 2013.
• 2.0 percent for 2014 and each
subsequent year.
Section 132(a)(2) of the MIPPA
amends section 1848(m)(3) of the Act, as
redesignated by section 131(b)(2) of the
MIPPA, to authorize the Secretary to
identify successful electronic
prescribers for a reporting period using
one of two possible standards: One
based on the eligible professional’s
reporting, in at least 50 percent of the
reportable cases, on any electronic
prescribing quality measures that have
been established under the physician
reporting system under subsection
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1848(k) (which, as noted previously, we
have named ‘‘PQRI’’ for ease of
reference) and are applicable to services
furnished during a reporting period, as
amended by section 131(b) of the
MIPPA, and one based on the electronic
submission by the eligible professional
of a sufficient number of prescriptions
under the Medicare Prescription Drug
Benefit Program (Part D) during the
reporting period. If the Secretary
decides to use the latter standard, the
Secretary is authorized to use Part D
drug claims data to assess whether a
‘‘sufficient’’ number of prescriptions
have been submitted by eligible
professionals. We do not intend to use
this latter standard for 2009. However,
to the extent that we intend to use this
latter standard in future years, we will
address how we plan to define
‘‘sufficient’’ through notice and
comment rulemaking. Section
1848(m)(3)(B) of the Act, as added by
section 132(a)(2)(B) of the MIPPA, also
requires that to the extent practicable, in
determining whether eligible
professions meet the requirements to be
identified as successful electronic
prescribers, ‘‘the Secretary shall ensure
that eligible professionals utilize
electronic prescribing systems in
compliance with standards established
for such systems pursuant to the Part D
Electronic Prescribing Program under
section 1860D–4(e) of the Act.’’ The
2009 electronic prescribing incentive
reporting period and the criteria that
will be used by CMS to identify
successful electronic prescribers for
2009 are described in detail in section
II.O2. of this final rule with comment
period.
Section 132(a)(1) of the MIPPA also
amends section 1848(m) of the Act, as
redesignated by section 131(b)(2) of the
MIPPA, to provide for an exemption
from both the incentive payment and
the payment differential for a particular
reporting period of certain eligible
professionals. The Secretary is
authorized to choose between two
possible standards for the exemption:
One based upon whether the allowed
charges to which the electronic
prescribing quality measure applies are
less than 10 percent of the total allowed
charges for all covered professional
services furnished by the eligible
professional during the reporting
period; and one based on whether the
eligible professional does not submit
(including both electronically and
nonelectronically) a sufficient number
(as determined by the Secretary) of
prescriptions under Part D (which can
again be assessed using Part D drug
claims data). We do not intend to use
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this latter standard for 2009. However,
to the extent that we intend to use this
latter standard in future years, we will
address how we plan to define
‘‘sufficient’’ through notice and
comment rulemaking. For 2009, the
criteria for exemption from the
incentive payments for electronic
prescribing are described in section
II.O2. of this final rule with comment
period.
Section 132(b) of the MIPPA also
amends section 1848(a) of the Act to
authorize the Secretary to apply a
hardship exception on a case-by-case
basis to exempt eligible professionals
from the payment differential that
applies to those who are not successful
electronic prescribers by 2012. Since
this hardship exception does not apply
until 2012, we will address the
parameters that we intend to apply to
determine hardship through future
notice and comment rulemaking.
E. Section 133(b): Expanding Access to
Primary Care Services
Section 1848(c)(2)(B)(ii)(II) of the Act
requires that increases or decreases in
RVUs for a year 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 must make
adjustments to preserve BN.
The 5-Year Review of work RVUs
would have resulted in a change in
expenditures that would exceed $20
million if we made no offsetting
adjustments to either the CF or RVUs. In
CY 2007 and CY 2008, we met the 5Year Review BN requirement by making
a separate adjustment to the work RVUs.
Section 133(b) of the MIPPA amends
section 1848(c)(2)(B) of the Act to
specify that the BN adjustor for the 5Year Review must be applied to the
conversion factor beginning with CY
2009. Further discussion of this MIPPA
provision as it relates to the CY 2009
PFS can be found in section IX. of this
final rule with comment period.
F. Section 134: Extension of Floor on
Medicare Work Geographic Adjustment
Under the Medicare Physician Fee
Schedule
In accordance with section 103 of the
MMSEA, the 1.000 work GPCI floor was
set to expire as of July 1, 2008. Section
134(a) of the MIPPA extended the 1.000
work geographic practice cost index
(GPCI) floor from July 1, 2008 through
December 31, 2009. Additionally,
section 134(b) of the MIPPA sets a
permanent 1.500 work GPCI floor in
Alaska, beginning January 1, 2009. As
such, the CY 2009 GPCIs and
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summarized GAFs reflect these
statutorily mandated work GPCI floors.
G. Section 136: Extension of Treatment
of Certain Physician Pathology Services
Under Medicare
The 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 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.
In the CY 2000 PFS final rule, we
stated that we would implement a
policy to pay only the hospital for the
TC of physician pathology services
furnished to hospital inpatients (64 FR
59380, 59408 through 59409). Prior to
this proposal, any independent
laboratory could bill the Medicare
contractor under the PFS for the TC of
physician pathology services for
hospital inpatients. At the request of
commenters on the final rule that
independent laboratories and hospitals
needed sufficient time to negotiate
arrangements, we delayed the
implementation of that rule until 2001.
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
Medicare contractor 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 of the
physician pathology service to a
hospital patient and submitted claims to
the Medicare contractor for payment.
This provision was initially effective for
2 years, 2001 through 2002.
Through subsequent legislation (that
is, section 732 of the MMA, section 104
of the MIEA–TRHCA, section 104 of the
MMSEA, and section 136 of the
MIPPA), this provision has been
extended through December 31, 2009. 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
paid differently depending on the status
of the laboratory.
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H. Section 141: Extension of Exceptions
Process for Medicare Therapy Caps
1. Background
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 outpatient
hospital services.
The exceptions process for the
therapy caps, originally authorized by
section 5107 of the DRA, was extended
from January 1, 2006 through December
31, 2007 by section 201 of the MIEA–
TRHCA. Section 105 of the MMSEA
provided for a further extension of this
exceptions process through the first 6
months of CY 2008 (that is, January 1,
2008 through June 30, 2008).
2. MIPPA Provision for Cap Exceptions
Section 141 of the MIPPA extends the
exceptions process for therapy caps
from July 1, 2008 through December 31,
2009.
Section 1833(g)(2) of the Act provides
that, for CY 1999 through CY 2001, the
caps were $1500, and for the calendar
years after 2001, the caps are equal to
the preceding year’s cap increased by
the percentage increase in the Medicare
Economic Index (MEI) (except that if an
increase for a year is not a multiple of
$10, it is rounded to the nearest
multiple of $10). The annual, per
beneficiary therapy cap for 2009 will be
$1840 for physical therapy and speechlanguage pathology services combined
and $1840 for occupational therapy
services, separately. The MIPPA does
not create a separate cap for SLP
services.
I. Section 143: Speech-Language
Pathology Services
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1. Background
Currently, therapy services [physical
therapy (PT), occupational therapy (OT),
and speech-language pathology (SLP)]
may be billed by providers, such as
hospitals, and by suppliers, such as
physicians or NPPs. Physical therapists
and occupational therapists may also
independently enroll as suppliers of
Medicare services, and may bill and
receive payment for their services
furnished in private practice. Prior to
enactment of the MIPPA, the statute did
not allow SLPs to enroll independently
and to be paid directly.
The amendments made by section 143
of the MIPPA provide the authority for
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CMS to enroll speech-language
pathologists as suppliers of Medicare
services, and for speech-language
pathologists to begin billing Medicare
for outpatient SLP services furnished in
private practice beginning July 1, 2009.
Enrollment will allow SLPs in private
practice to bill Medicare and receive
direct payment for their services.
In general, section 143 of the MIPPA
amends the statute to give speechlanguage pathology services the
meaning given the term ‘‘physical
therapy services’’ in section 1861(p) of
the Act. This provides the authority to
enroll speech-language pathologists and
to pay them for their services in the
same way as physical therapists that are
separately enrolled. Section 143 made
conforming changes to the scope of
benefits in section 1832(a)(2)(C) of the
Act to include outpatient speechlanguage pathology services furnished
in a private practice. Section 143 of the
MIPPA also makes the following
changes to the Act:
• Section 1832(a)(2)(C) of the Act is
amended to specifically include
outpatient speech-language pathology
services in the scope of benefits for
which payment may be made.
• Section 1833(a)(8) of the Act is
amended to describe outpatient SLP
services as separate and distinct services
from PT.
• Section 1833(g)(1) is amended to
separately describe outpatient SLP
services, but the amendments do not
create a separate therapy cap for SLP
services. The cap for PT and SLP
combined is $1840 per beneficiary in
CY 2009.
• Section 1835(a) of the Act is
amended to specify that payment may
be made for outpatient SLP services to
a provider of services, including a
clinic, rehabilitation agency or public
health agency that meets the
requirements described in the amended
section 1861(p)(4)(A) and (B) of the Act.
• Section 1861(p) of the Act is
amended to remove from the definition
of ‘‘outpatient physical therapy
services’’ SLP services furnished by or
under arrangements or supervision of a
provider. These SLP services are deleted
from the definition of outpatient
physical therapy services because SLP
services are now defined separately
under section 1861(ll)(2) of the Act.
• Section 1861(s)(2)(D) of the Act is
amended to add outpatient SLP services
as medical and other health services,
along with outpatient PT and OT.
• Section 1862(a)(20) of the Act is
amended to add SLP services to the list
of therapy services for which Medicare
payment cannot be made if furnished as
an incident to a physician’s professional
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services unless standards and
conditions specified by the Secretary
(other than licensing) are met, as such
standards and conditions would apply
to such services if furnished by a
therapist.
• Section 1866 of the Act is amended
to include SLP services in the
description of services that can be
considered furnished by a provider of
services when furnished by a clinic,
rehabilitation agency, or public health
agency that meets certain requirements.
• Section 1877 of the Act is amended
to include outpatient SLP services in the
list of designated health services for the
purpose of the prohibition on certain
physician referrals. (See section VI.B. of
this preamble for a discussion of these
changes.)
2. Implementation of the MIPPA
Section 143 of the MIPPA amends the
statute to treat speech-language
pathologists (SLP) and speech-language
pathology services in a similar manner
to physical therapists and physical
therapy services. Physical therapists are
permitted to enroll in Medicare and to
furnish and bill for their services in
private practice. To conform SLP
regulations to those for PT, we are
adding provisions for services furnished
by SLPs in private practice to
§ 410.62(c) using language similar to the
provisions of § 410.59 and § 410.60 that
apply to OT and PT enrollment. In
§ 410.62, we are redesignating the
paragraph (c) as paragraph (d). The
current paragraph (d) is deleted since
this language is covered in § 410.60.
The amendments made by section 143
of the MIPPA concerning SLP
enrollment, billing and payment are
generally self-implementing and we are
revising our regulations accordingly as
noted above consistent with our policies
for PTs.
Section 410.62(c) contains a list of
requirements that SLPs must meet. The
regulations require that an SLP be
legally authorized to engage in SLP
private practice in the State where he or
she practices. The SLP must practice
only within the scope of practice
allowed by the State. Section
410.62(c)(1)(ii) describes the various
practice types in which an individual
SLP may provide services.
Section 410.62(c)(1)(iii)(A) requires
that SLPs in private practice must bill
Medicare for services furnished in the
State where they are licensed, in the
locations where the practice is operated,
at a time when the practice is operating.
The space must be owned, leased or
rented by the practice and used for the
exclusive purpose of operating the
practice during those hours the practice
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is furnishing services to beneficiaries.
Private practice services may be
furnished at a patient’s home, but not at
an institution that is a hospital, CAH or
SNF.
Section 410.62(c)(iv) also requires that
SLPs must treat individuals who are
patients of the practice and for whom
the practice collects fees for the services
furnished.
3. Operational Issues
We will revise our manual
instructions to reflect that SLPs can now
enroll and be paid directly by Medicare
for services furnished on or after July 1,
2009. SLPs who wish to enroll in
Medicare may submit their Medicare
enrollment application to their local
Medicare contractor on or after June 2,
2009. Before submitting a Medicare
enrollment application, SLPs are
required to obtain a National Provider
Identifier, if they do not currently have
one. For general information on the
Medicare provider enrollment process,
please see the CMS Web site at
https://www.cms.hhs.gov/
MedicareProviderSupEnroll.
To educate the public about this
change, we will discuss the new
enrollment instructions during an
upcoming Physician and Allied Health
Professionals Open Door Forum. In the
coming months, we will also revise our
manual instructions and issue a MLN
Matters article and listserv messages to
inform the public that SLPs may enroll
as suppliers of Medicare services and
begin billing Medicare for outpatient
SLP services furnished in private
practice beginning July 1, 2009. We also
plan to contact national associations
and request that they notify their
members about these changes. Finally,
we will require our Medicare
contractors to contact SLPs via bulletins
or listserv announcements about these
changes.
J. Section 144(b): Repeal of Transfer of
Title for Oxygen Equipment
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1. Payment Rules for Oxygen and
Oxygen Equipment
a. Overview
The general Medicare payment rules
for durable medical equipment (DME)
are set forth in section 1834(a) of the Act
and 42 CFR part 414, subpart D of our
regulations. Section 1834(a)(1) of the
Act and § 414.210(a) of our regulations
establish the Medicare payment for a
DME item as equal to 80 percent of
either the lower of the actual charge or
the fee schedule amount for the item.
The beneficiary coinsurance is equal to
20 percent of either the lower of the
actual charge or the fee schedule
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amount for the item once the deductible
is met.
Specific rules regarding payment for
oxygen and oxygen equipment are set
forth in section 1834(a)(5) of the Act and
§ 414.226 of our regulations. Suppliers
are paid a monthly payment amount for
furnishing medically necessary oxygen
contents (stationary and portable) and
stationary oxygen equipment falling
under the class described in
§ 414.226(c)(1)(i). Equipment in this
class includes stationary oxygen
concentrators, which concentrate
oxygen from room air; stationary liquid
oxygen systems, which use oxygen
stored as a very cold liquid in cylinders
and tanks; and gaseous oxygen systems,
which administer compressed oxygen
directly from cylinders.
We also pay a monthly add-on
payment to suppliers furnishing
medically necessary portable oxygen
equipment falling under one of two
classes described in § 414.226(c)(1)(ii)
and (iii). Equipment in these classes
includes portable liquid oxygen
systems, portable gaseous oxygen
systems, portable oxygen concentrators,
and oxygen transfilling equipment used
to fill portable tanks or cylinders in the
home. Both liquid and gaseous oxygen
systems (stationary and portable)
require on-going delivery of oxygen
contents.
b. Provisions of the Deficit Reduction
Act of 2005 (DRA)
Section 5101(b) of the DRA amended
section 1834(a)(5) of the Act, limiting
monthly payments to suppliers for
oxygen equipment to 36 months of
continuous use. At the end of this 36month period, suppliers must transfer
title to oxygen equipment rented on or
after January 1, 2006 to the beneficiary.
Payments for oxygen contents continue
after title to the equipment has been
transferred.
On November 9, 2006, we issued a
final rule (71 FR 65884) to implement
these changes. We amended § 414.226 to
clarify that the monthly payments for
items falling under the classes now
described in § 414.226(c)(1)(i) thru (iii)
are made for periods of continuous use
not to exceed 36 months. We revised the
rules regarding a period of continuous
use for the rental of DME in § 414.230
of our regulations to clarify the
continuous use determination.
We also added a new paragraph (f) to
§ 414.226 of our regulations, requiring a
supplier to transfer title to the oxygen
equipment to the beneficiary on the first
day after the 36th continuous month in
which payment is made for the
equipment.
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69875
In addition, we revised § 414.226 of
our regulations to allow monthly
payments to suppliers for furnishing
gaseous or liquid oxygen contents for
use with either beneficiary-owned
stationary equipment or beneficiaryowned portable equipment.
Section 5101(b) of the DRA also
authorized payments for maintenance
and servicing of beneficiary-owned
oxygen equipment if the Secretary
determined such payments to be
reasonable and necessary. In keeping
with the longstanding Medicare policy
to pay for maintenance and servicing of
DME that is owned by the beneficiary,
we determined that paying for necessary
repairs and periodic maintenance and
servicing of beneficiary-owned oxygen
equipment was reasonable and
necessary to ensure that oxygen
equipment owned by beneficiaries
continued to function properly. Without
these payments, we were concerned that
there was little incentive for suppliers to
maintain this equipment, because the
equipment was no longer owned by the
supplier. Our regulations setting forth
this payment amount are discussed in
more detail in section III.J.2.c. below in
this section.
In the November 2006 final rule, we
established other safeguards for
beneficiaries receiving oxygen and
oxygen equipment, which are set forth
at § 414.210(e)(5) and § 414.226(g).
Section 414.210(e)(5) requires
suppliers—after transferring title to
oxygen equipment—to furnish
replacement equipment at no cost to the
beneficiary or the Medicare program if
the item furnished by the supplier does
not last for the entire reasonable useful
lifetime established for the equipment
in accordance with § 414.210(f)(1). Per
§ 414.210(f), if oxygen equipment has
been in continuous use by the
beneficiary for the equipment’s
reasonable useful lifetime, the
beneficiary may elect to obtain new
equipment. Section 414.210(f)(1) of our
regulations states the reasonable useful
lifetime for equipment is determined
through program instructions. In the
absence of program instructions, the
carrier may determine the reasonable
useful lifetime for equipment, but in no
case can it be less than 5 years.
Computation is based on when the
equipment is delivered to the
beneficiary, not the age of the
equipment. If the beneficiary elects to
obtain replacement oxygen equipment,
payment is made in accordance with
§ 414.226(a). Section 414.226(g)(2)
prohibits suppliers from replacing
oxygen equipment prior to the
expiration of the 36-month rental period
unless a specific exception applies. This
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was intended to protect the beneficiary
from the supplier changing the
beneficiary’s equipment in order to
maximize Medicare payments. For
example, the supplier may want to
move a beneficiary from a portable
oxygen concentrator to portable gaseous
equipment for which Medicare makes
additional payments after the 36-month
rental period ends.
Section 414.226(g)(4) provides that,
by no later than 2 months before the
date on which the supplier must
transfer title to oxygen equipment to the
beneficiary, the supplier must disclose
to the beneficiary: (1) Whether, in the
case of oxygen transfilling equipment
and stationary or portable oxygen
concentrators, it can maintain and
service the equipment after the
beneficiary acquires title to it; and (2)
whether, in the case of stationary or
portable gaseous or liquid oxygen
systems, it can continue to deliver
oxygen contents to the beneficiary after
the beneficiary acquires title to the
equipment.
c. Medicare Improvements for Patients
and Providers Act (MIPPA) Section
144(b)—Repeal of Transfer of
Ownership of Oxygen Equipment
Section 144(b) of the MIPPA repeals
the requirement that the supplier
transfer title to oxygen equipment to the
beneficiary after the 36-month rental
period. In its place, section 144(b)
establishes a 36-month rental cap and
amends section 1834(a)(5)(F) of the Act
by adding three new payment rules and
supplier requirements for furnishing
oxygen and oxygen equipment after the
36-month rental period. Each of these
provisions is discussed below.
2. Provisions of the Final Rule with
Comment Period
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a. Furnishing Oxygen Equipment After
the Rental Cap
As discussed above, section 144(b)(1)
of the MIPPA amends section
1834(a)(5)(F)(ii)(I) of the Act, replacing
the transfer of title provision with a 36month rental cap. Under this new
provision, the supplier that furnishes
oxygen equipment during the 36-month
rental period must continue to furnish
the oxygen equipment after the 36month rental period. The supplier is
required to continue to furnish the
equipment during any period of medical
need for the remainder of the reasonable
useful lifetime of the equipment.
Section 144(b) does not provide any
exceptions to the requirement that the
supplier continue furnishing the
equipment during any period of medical
need. For example, if the beneficiary
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relocates at some time after the 36month rental period but before the end
of the reasonable useful lifetime of the
equipment, we interpret this provision
to require that the supplier must make
arrangements for the beneficiary to
continue receiving the equipment at his
or her new place of residence. This
responsibility is not transferred to
another supplier. It is important to note
that our current regulation at
§ 414.226(g)(1)(ii) does not apply this
same requirement to situations in which
the beneficiary relocates during the 36month rental period. We welcome
comments from interested parties on
whether this requirement should be
changed in light of the repeal of transfer
of ownership of oxygen equipment and
other recently enacted provisions of the
MIPPA.
We are revising § 414.226(f) to
conform our regulations to this new
requirement. We are deleting the
transfer of ownership requirement and
adding the new requirement that the
supplier must continue furnishing the
oxygen equipment after the 36-month
rental period during any period of
medical need for the remainder of the
reasonable useful lifetime of the
equipment.
The language of the statute mandates
that the supplier shall continue to
furnish oxygen equipment after the 36month rental period ‘‘during any period
of medical need’’ rather than ‘‘during
the period of medical need’’ for the
remainder of the reasonable useful
lifetime of the equipment. We interpret
this to mean that the supplier is
responsible for continuing to furnish the
equipment at any time following the 36month rental period and before the end
of the equipment’s reasonable useful
lifetime, for any period of medical need,
including multiple periods of medical
need that are separated by periods when
interruptions in the use of the
equipment occur.
For example, if, following the 36month rental period and before the end
of the equipment’s reasonable useful
lifetime, the beneficiary is admitted to a
hospital as an inpatient and then
discharged from the hospital 3 weeks
later, our interpretation requires the
supplier to furnish the oxygen
equipment for the period leading up to
the hospital admission and for the
period immediately following the
hospital discharge through the end of
the equipment’s reasonable useful
lifetime. The supplier’s responsibility to
continue furnishing the equipment is
not affected by the length of a break in
medical need or by the number of any
such breaks in medical need that occur
after the 36-month rental period and
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before the end of the equipment’s
reasonable useful lifetime. Therefore,
we are revising § 414.230 to specify that
a new period of continuous use will not
begin following the 36-month rental
period until the end of the equipment’s
reasonable useful lifetime. The supplier
is responsible for furnishing the
equipment after the 36-month rental
period for any period of medical need
for the remainder of the reasonable
useful lifetime of the equipment. If a
break in medical need occurs following
the 36-month rental period, the supplier
must resume furnishing the oxygen
equipment after the break ends and the
beneficiary once again has a medical
need for the oxygen equipment. In such
a case, the supplier is responsible for
furnishing the item for no additional
rental payments until the end of the
equipment’s reasonable useful lifetime.
If the equipment’s reasonable useful
lifetime (which is determined based on
the date the equipment is first delivered
rather than the age of the equipment)
ends during a break in medical need,
the supplier is under no obligation to
continue furnishing the equipment once
the beneficiary again has medical need
for the oxygen. However, in accordance
with § 414.210(f), the beneficiary may
elect to obtain new equipment in these
situations where the reasonable useful
lifetime of the equipment ends during a
break in need. If the beneficiary elects
to obtain new equipment, a new 36month rental period and a new
reasonable useful lifetime (currently 5
years for oxygen equipment) begin.
We note that, in accordance with
section 5101(b)(2)(B) of the DRA, the
rental period for beneficiaries receiving
oxygen equipment on December 31,
2005, began on January 1, 2006.
However, in accordance with
§ 414.210(f)(1), the reasonable useful
lifetime of durable medical equipment,
including oxygen equipment, begins on
the date that the equipment is first
delivered to the beneficiary. The
reasonable useful lifetime of oxygen
equipment furnished to beneficiaries on
December 31, 2005, was not adjusted to
begin anew on January 1, 2006, to
correspond with the start of the 36month rental period. Therefore, in these
situations, the equipment’s reasonable
useful lifetime may end at any point
during or after the 36-month rental
period.
For example, if oxygen equipment
was delivered to a beneficiary on May
1, 2003, and the beneficiary continued
to use the equipment beyond January 1,
2006, the 36-month rental period for the
equipment would begin on January 1,
2006, and end on December 31, 2008.
However, because the reasonable useful
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lifetime of the equipment ended on
April 30, 2008, the beneficiary could
have elected to obtain new oxygen
equipment on May 1, 2008, prior to the
end of the 36-month rental period for
the equipment. In another example, if
oxygen equipment was delivered to a
beneficiary on July 1, 2004, and the
beneficiary continued to use the
equipment beyond January 1, 2006, the
36-month rental period for the
equipment began on January 1, 2006,
and will end on December 31, 2008. In
this case, the reasonable useful lifetime
of the equipment would end on June 30,
2009, and the beneficiary could elect to
obtain new oxygen equipment on July 1,
2009, only 6 months after the end of the
36-month rental period for the
equipment. In these situations, a new
36-month rental period and a new
reasonable useful lifetime (for the new
equipment) would begin after the end of
the existing equipment’s reasonable
useful lifetime if the beneficiary elects
to obtain new equipment.
We are also revising § 414.210(e)(1),
(2), (e)(4) and (e)(5) to delete regulatory
text which relates to beneficiary
ownership of oxygen equipment. In
addition, we are deleting § 414.210(e)(3)
because beneficiaries will no longer
own oxygen tanks and cylinders.
Because § 414.210(e)(3) is being deleted,
we are redesignating § 414.210(e)(4) and
§ 414.210(e)(5) as § 414.210(e)(3) and
§ 414.210(e)(4), respectively.
We are also modifying § 414.226 to
state that the protection against supplier
replacement of oxygen equipment,
unless an exception applies, continues
to be in effect after the 36-month rental
period ends. Specifically, we are
revising § 414.226(g)(2) to indicate that
this prohibition applies until the
expiration of the reasonable useful
lifetime established for the equipment.
As discussed in the November 9, 2006
final rule (71 FR 65894), we believe this
is a necessary safeguard for the
beneficiary against changes in
equipment made by the supplier in
order to maximize payments resulting
from moving from one payment class or
modality to another. Finally, we are
deleting § 414.226(g)(4) because the
transfer of ownership of oxygen
equipment provision has been repealed,
rendering this provision inapplicable.
b. Payment for Oxygen Contents After
the Rental Cap
Section 144(b)(1) of the MIPPA
amends section 1834(a)(5)(F)(ii)(II) of
the Act and requires us to continue to
make payments to suppliers for
furnishing oxygen contents after the 36month rental cap for oxygen equipment
ends. Under this provision, an oxygen
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supplier that furnished liquid or
gaseous oxygen equipment during the
36-month rental period, and is required
by section 1834(a)(5)(F)(ii)(I) of the Act
to continue furnishing the equipment
after the 36-month rental period ends,
will receive payment for furnishing
oxygen contents necessary for use with
liquid or gaseous oxygen equipment
after the 36-month rental period.
Section 1834(a)(5)(F)(ii)(II) of the Act
establishes the payment amount for the
oxygen contents as that set forth in
section 1834(a)(9) of the Act.
We are revising § 414.226(d) and (f) to
specify that payment shall be made for
oxygen contents for use with supplierowned liquid or gaseous oxygen
equipment furnished after the 36-month
rental period. An oxygen supplier that
furnishes liquid or gaseous oxygen
equipment during a 36-month rental
period must continue to furnish both
the oxygen equipment and contents for
any period of medical need for the
remainder of the reasonable useful
lifetime of the liquid or gaseous oxygen
equipment established in accordance
with § 414.210(f)(1).
This requirement is necessary because
liquid and gaseous oxygen systems
(stationary and portable) require ongoing delivery of oxygen contents in
tanks or cylinders to furnish oxygen to
the patient. When read in conjunction
with section 1834(a)(5)(F)(ii)(II) of the
Act, we interpret the mandate in section
1834(a)(5)(F)(ii)(I) of the Act to include
oxygen contents, as well as oxygen
equipment, given the nature of this
benefit and the requirement that
Medicare continue to pay for oxygen
contents following the 36-month rental
period.
As noted in section III.J.2.a. of this
final rule with comment period, we are
revising § 414.226(f) to specify that the
supplier must make arrangements for
the beneficiary to continue receiving the
equipment if the beneficiary relocates at
some time after the 36-month rental
period but before the end of the
reasonable useful lifetime of the
equipment. Likewise, for the reasons set
forth in section III.J.2.a. above, we are
revising § 414.226(f) to specify that, in
the case of liquid or gaseous equipment
(stationary and portable) the supplier
must make arrangements for the
beneficiary to continue receiving oxygen
contents if the beneficiary relocates at
some time after the 36-month rental
period but before the end of the
reasonable useful lifetime of the liquid
or gaseous equipment (stationary and
portable). The supplier must make
arrangements for the beneficiary to
continue receiving the oxygen contents
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69877
and equipment at his or her new
residence.
c. Maintenance and Servicing of
Supplier-Owned Oxygen Equipment
After the Rental Cap
Section 1834(a)(5)(F)(ii)(III) of the Act,
as amended by section 144(b)(1) of the
MIPPA, authorizes payments for
maintenance and servicing of supplierowned oxygen equipment after the 36month rental period if the Secretary
determines that such payments are
reasonable and necessary. Section
5101(b)(1) of the DRA previously
authorized payment for reasonable and
necessary maintenance and servicing of
beneficiary-owned oxygen equipment.
i. Current Payment for Maintenance and
Servicing of Oxygen Equipment
In the August 3, 2006 proposed rule
for implementing section 5101(b) of the
DRA (71 FR 44082), we discussed the
fact that it is longstanding Medicare
policy to pay for repair (fixing or
mending) of beneficiary-owned DME if
such services are necessary to keep the
equipment functioning. It is also
longstanding Medicare policy to pay for
non-routine maintenance of beneficiaryowned DME (that is, extensive
maintenance that must be performed by
skilled technicians). These policies were
discussed in the November 9, 2006 final
rule (71 FR 65918) and are set forth in
§ 414.210(e)(1) and sections 40 and 50 of
chapter 20 of the Medicare Claims
Processing Manual (Pub. 100–04). In
keeping with these longstanding
Medicare policies, we proposed to pay
for both services when performed on
beneficiary-owned oxygen equipment
following passage of the DRA (see the
proposed rule published on August 3,
2006 (71 FR 44082)).
In response to the August 3, 2006
proposed rule, we received public
comments concerning the safe use and
maintenance and servicing of oxygen
equipment once the supplier transferred
title of the equipment to the beneficiary.
Commenters raised concerns that
beneficiaries would be unable to
properly maintain their equipment and
that unless Medicare paid for
maintenance and servicing of
beneficiary-owned equipment, suppliers
would not have any incentive to provide
these services.
In response to these concerns, we
finalized our proposal to pay for
necessary repairs and non-routine
maintenance of beneficiary-owned
oxygen equipment (See 71 FR 65917
through 65919) in accordance with the
rules set forth at § 414.210(e). In
addition, we revised § 414.210(e) to
allow for payment for general
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maintenance and servicing of
beneficiary-owned oxygen equipment
other than liquid or gaseous equipment
(stationary and portable).
Section 414.210(e)(2) authorized
payment for 30 minutes of labor for
general maintenance and servicing of
beneficiary-owned oxygen transfilling
equipment and stationary or portable
oxygen concentrators every 6 months,
beginning 6 months after transfer of title
to the equipment to the beneficiary.
Medicare also made payment for parts
replaced during the general
maintenance and servicing of the
beneficiary-owned oxygen equipment.
As indicated in the November 9, 2006
final rule (71 FR 65917), we consider
this payment for general maintenance
and servicing to be an important
beneficiary safeguard. The maintenance
and servicing payments encourage
suppliers to keep beneficiary-owned
oxygen equipment in good repair which
ensures the safety of the beneficiary.
The payment authorized by
§ 414.210(e)(2) did not apply to liquid or
gaseous oxygen equipment (stationary
or portable) because we believe the
supplier should ensure that the tanks
and cylinders are functioning properly
at the time it is furnishing oxygen
contents.
Also, in response to concerns
regarding the safe use and disposal of
beneficiary-owned oxygen tanks and
cylinders, we revised § 414.210(e)(3) to
allow payment for pick up of
beneficiary-owned oxygen tanks and
cylinders that are no longer medically
necessary.
ii. Revisions as a Result of the MIPPA
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(1) Findings Related to Non-Routine
Maintenance and Servicing (Including
Repair)
Section 1834(a)(5)(F)(ii)(III), as
amended by section 144(b)(1) of the
MIPPA, authorizes similar payments for
maintenance and servicing of supplierowned oxygen equipment furnished
after the 36-month rental period if we
determine such payments are reasonable
and necessary. Based on a careful
review of this issue, as discussed below,
we have determined that at this time it
is not reasonable and necessary to pay
for non-routine maintenance and
servicing (including repair) of supplierowned oxygen equipment. Given that
the supplier owns the equipment, we
believe that the supplier should be
responsible for maintaining their
equipment in working order as they did
during the 36-month rental period.
In addition, oxygen equipment is
largely reliable equipment which
requires minimal maintenance and
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servicing during the first 5 years of use.
Warranties covering 5 years are
generally available for the top selling
brands of oxygen equipment and as
discussed in the November 9, 2006 final
rule (71 FR 65917), we understand from
manufacturers that such products are
generally dependable. The Department
of Veterans Affairs (VA) has reported to
us that, based on their experience,
oxygen concentrators will usually
operate for 5 years without the need for
significant repair or replacement of
costly parts. The VA purchases and
maintains oxygen equipment, including
oxygen concentrators, for veterans
through its Veterans Integrated Service
Network (VISN).
In a September 2006 report entitled
‘‘Medicare Home Oxygen Equipment:
Cost and Servicing,’’ (OEI–09–04–
00420), the Office of Inspector General
(OIG) of the Department of Health and
Human Services similarly found that
only minimal servicing and
maintenance for oxygen concentrators
and portable equipment is necessary.
The OIG also found that suppliers train
beneficiaries to perform routine
maintenance of the equipment. As noted
in that report, services performed by
suppliers during visits to the homes of
beneficiaries to perform maintenance
and servicing of oxygen concentrators
include checking the flow rate
prescribed by the physician and
checking the concentration of oxygen
delivered by the unit.
Moreover, the OIG found that only 22
percent of Medicare beneficiaries use
oxygen equipment for 36 months or
more. Therefore, oxygen equipment is
returned to suppliers before the end of
the 36-month rental period in
approximately 78 percent of cases, and
suppliers are then able to furnish the
equipment to other beneficiaries,
starting new 36-month periods of rental
payments for the same equipment.
Based on current Medicare fee schedule
amounts, during a 5-year period in
which a supplier rents an oxygen
concentrator to multiple beneficiaries,
each using the equipment for less than
36 months, the supplier is paid $11,957
for furnishing the oxygen concentrator,
the average cost of which was found by
the OIG to be $587. Even in the minority
of cases in which beneficiaries use
oxygen equipment for more than 36
months, the supplier is paid $7,174 for
furnishing the equipment. Given this
level of reimbursement, it is reasonable
to assume that each Medicare
beneficiary should be receiving a fairly
new piece of oxygen equipment. If the
supplier chooses instead to provide
older equipment to the beneficiary, we
expect that the supplier, and not
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Medicare or the beneficiary, should be
responsible for performing any nonroutine maintenance and servicing
(including repair) of the supplier-owned
equipment to ensure that it continues to
function properly during the 5-year
reasonable useful lifetime of the
equipment.
(2) Finding Related to Routine
Maintenance and Servicing
We have determined at this time that
it is not reasonable and necessary to
make payments for repair or non-routine
maintenance and servicing (including
repair) of supplier-owned oxygen
equipment. We have made an initial
determination that payments for
periodic, in-home visits by suppliers to
inspect certain oxygen equipment and
provide general maintenance and
servicing during these visits are
reasonable and necessary for the safety
of the beneficiary. Therefore, for CY
2009 only, we are revising
§ 414.210(e)(2), which provides
payment for general maintenance and
servicing of certain beneficiary-owned
oxygen equipment, to apply to routine
maintenance and servicing of supplierowned oxygen concentrators and
transfilling equipment furnished after
the 36-month rental period consistent
with our authority in section
1834(a)(5)(F)(ii)(III) of the Act. Based on
our preliminary analysis, we believe
that payments in CY 2009 for periodic
inspection and general maintenance and
servicing of oxygen concentrators and
transfilling equipment are reasonable
and necessary for the safety of
beneficiaries. Therefore, for CY 2009
only, we will make payments when the
supplier performs a routine
maintenance and servicing visit
following each period of continuous use
of 6 months after the 36-month rental
period ends. Determining a period of
continuous use is governed by
§ 414.230, which we discussed in
section III.J.2.a. above.
Payments for a routine maintenance
and servicing visit in CY 2009 will be
made when the beneficiary is at home
or at a temporary residence (for
example, a vacation residence). For each
visit, we believe that it is appropriate to
provide payment for 30 minutes of labor
for general maintenance and servicing of
oxygen equipment other than liquid or
gaseous equipment (stationary and
portable). As we indicated in the
November 9, 2006 final rule for
implementing section 5101(b) of the
DRA (71 FR 65917), we believe that
payment for 30 minutes of labor will
adequately compensate suppliers for
general maintenance and servicing visits
based on findings by the OIG in their
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September 2006 report (OEI–09–04–
00420) that many routine maintenance
activities performed by suppliers on
concentrators could be performed
within that timeframe.
We expect that the primary purpose of
the periodic visit would be to check the
supplier-owned oxygen equipment to
ensure that it will continue to function
properly for the succeeding 6-month
period of continuous use and does not
need to be replaced. We are revising
§ 414.210(e)(2) to permit payment in CY
2009 for general maintenance and
servicing of supplier-owned oxygen
equipment beginning 6 months after the
end of the 36-month rental period.
As a result, we will make payments
under § 414.210(e)(2) only for an actual
visit to the beneficiary’s home or
temporary residence. This provision is
generally consistent with the additional
maintenance and servicing payments
established at § 414.210(e)(2) after the
enactment of the DRA, except that, in
light of the repeal of transfer of title for
oxygen equipment provisions, separate
payment will not be made for parts
replaced during the routine
maintenance and servicing visit. If parts
need to be replaced in order to make
supplier-owned equipment suitable for
the beneficiary, we believe that the
supplier should be responsible for
replacing the parts on equipment from
their inventory in order to meet the
beneficiary’s medical need for oxygen.
We will make payments for general
maintenance and servicing of oxygen
concentrators and transfilling
equipment as discussed above.
However, we welcome comments from
interested parties on this issue,
especially regarding whether these
payments should continue past CY 2009
in light of the OIG’s findings that only
minimal maintenance and servicing of
oxygen equipment is necessary and that
suppliers continue to own the
equipment.
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K. Section 145: Clinical Laboratory Tests
Outpatient clinical laboratory services
are paid under the clinical laboratory
fee schedule (CLFS) in accordance with
section 1833(h) of the Act. Section
1833(h)(2)(A)(i) of the Act specifies that
the fee schedules are adjusted annually,
to become effective on January 1 of each
year, by a percentage increase or
decrease equal to the percentage
increase or decrease in the Consumer
Price Index for All Urban Consumers
(United States city average) (CPI–U).
The Congress has frozen the update to
zero percent for CYs 2004 through 2008.
The freeze on the annual update expires
beginning January 1, 2009.
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For the period beginning January 1,
2009, the update factor for the clinical
lab fee schedule would be 5.0 percent.
However, section 145(b) of the MIPPA
reduces this increase by 0.5 percent for
each of the years 2009 through 2013.
Therefore, for the period January 1,
2009, through December 31, 2009,
payments under the Clinical Laboratory
Fee Schedule will be increased by 4.5
percent.
L. Section 146: Improved Access to
Ambulance Services
Section 146(a) of the MIPAA modifies
section 1834(l)(13) of the Act to specify
that, effective for ground ambulance
claims furnished during the period July
1, 2008, the ambulance fee schedule
through December 31, 2009 amounts for
ground ambulance services shall be
increased as follows:
• For covered ground ambulance
transports which originate in a rural
area or in a rural census tract of a
metropolitan statistical area, the fee
schedule amounts shall be increased by
3 percent; and
• For covered ground ambulance
transports which do not originate in a
rural area or in a rural census tract of
a metropolitan statistical area, the fee
schedule amounts shall be increased by
2 percent.
We are revising § 414.610(c)(1) to
conform the regulations to this statutory
requirement. This statutory requirement
is self-implementing. A plain reading of
the statute requires only a ministerial
application of the mandated rate
increase, and does not require any
substantive exercise of discretion on the
part of the Secretary. We note that in
adding language to § 414.610(c)(1) to set
forth this statutory requirement, we
have also divided it into 2 paragraphs
for purposes of clarity.
In addition, section 146(b)(1) of the
MIPPA specifies that any area that was
designated as a rural area for purposes
of making payments under the
ambulance fee schedule for air
ambulance services furnished on
December 31, 2006, shall be treated as
a rural area for purposes of making
payments under the ambulance fee
schedule for air ambulance services
furnished during the period July 1, 2008
through December 31, 2009.
Accordingly, for areas that were
designated rural on December 31, 2006,
and were subsequently redesignated as
urban, we have re-established the
‘‘rural’’ indicator on the zip code file for
air ambulance services effective July 1,
2008. We are revising § 414.610 to add
a new paragraph (h) to conform the
regulations to this statutory
requirement. This statutory requirement
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is self-implementing. A plain reading of
the statute requires only a ministerial
application of a rural indicator, and
does not require any substantive
exercise of discretion on the part of the
Secretary.
M. Section 149: Adding Certain Entities
as Originating Sites for Payment of
Telehealth Services
Section 1834(m)(4)(C) of the Act
defines a telehealth ‘‘originating site’’ to
mean only those sites described in the
statute at which an eligible telehealth
individual is located at the time the
service is furnished via a
telecommunications system. The statute
requires originating sites to be located in
an area that is designated as a rural
health professional shortage area under
section 332(a)(1)(A) of the Public Health
Service Act (42 U.S.C. 254e(a)(1)(A)); in
a county that is not included in a
Metropolitan Statistical Area; or in an
entity that participates in a Federal
telemedicine demonstration project that
has been approved by (or receives
funding from) the Secretary of Health
and Human Services as of December 31,
2000. Previously, the statute described
the following originating sites: the office
of a physician or practitioner; a critical
access hospital (as defined in section
1861(mm)(1) of the Act); a rural health
clinic (as defined in section 1861(aa)(2)
of the Act); a Federally qualified health
center (as defined in section 1861(aa)(4)
of the Act); and a hospital (as defined
in section 1861(e) of the Act).
Section 149 of the MIPPA amended
section 1834 of the Act to add certain
entities as originating sites for payment
of telehealth services. As explained
further below, MIPPA also amended
section 1888(e)(2)(A)(ii) of the Act to
exclude telehealth services furnished
under section 1834(m)(4)(C)(ii)(VII)
from the consolidated billing provisions
of the skilled nursing facility
prospective payment system (SNF PPS).
With respect to a telehealth service,
subject to section 1833(a)(1)(U) of the
Act, we pay a facility fee to the
originating site. The originating site
facility fee is a separately billable Part
B payment, and we pay it to eligible
originating sites outside of other
payment methodologies. As discussed
in section X. of this final rule with
comment period, the originating site
facility fee for CY 2009 is $23.72.
Other than adding certain entities as
originating sites for payment of
telehealth services, the MIPPA did not
change the existing telehealth eligibility
criteria, or payment and billing
requirements related to telehealth
services. Therefore, for the telehealth
originating sites added by section 149 of
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the MIPPA, we are adopting policies
similar to existing policies with respect
to the provision of, and payment for,
telehealth services in the various
originating sites. We are adopting these
policies for CY 2009 on an interim final
basis, and will respond to any
comments and finalize our policies in
subsequent rulemaking.
Telehealth is a delivery mechanism
for otherwise payable Part B services.
We pay distant site physicians or
practitioners for Medicare telehealth
services only if the service is separately
payable under the PFS when furnished
in a face-to-face encounter at that
location. For example, we pay distant
site physicians or practitioners for
furnishing services via telehealth only if
such services are not included in a
bundled payment to the facility that
serves as the originating site.
The regulations relating to the
Medicare telehealth provisions under
section 1834(m) of the Act are at
§ 410.78, which specifies the conditions
of payment for telehealth services, and
§ 414.65, which specifies the payment
rules for telehealth services. (See also
the CMS Internet-Only Medicare Benefit
Policy Manual, Pub. 100–02, Chapter
15, Section 270, and the CMS InternetOnly Medicare Claims Processing
Manual, Pub. 100–04, Chapter 12,
Section 190 for more information on
Medicare telehealth services and for
updated instructions for billing the
originating site facility fee.)
As noted previously, the telehealth
originating site facility fee is a
separately billable Part B payment that
is payable outside of any other payment
methodology. Renal Dialysis Centers,
Community Mental Health Centers, and
SNFs are all paid based under different
payment systems.
Renal Dialysis Centers
Section 149 of the MIPPA added
hospital-based or CAH-based renal
dialysis centers (including satellites) to
the list of originating sites for Medicare
telehealth services. As defined in
§ 405.2102, a renal dialysis center is a
hospital unit or satellite approved to
furnish outpatient maintenance dialysis
services required for the care of endstage renal disease (ESRD) dialysis
patients. Independent renal dialysis
facilities are not authorized in the law
to serve as originating sites for Medicare
telehealth services. Medicare pays for
outpatient maintenance dialysis services
based on a case-mix adjusted composite
rate which includes the cost of some
drugs, laboratory tests, and other items
and services routinely furnished to
dialysis patients. Medicare pays
separately for physicians’ professional
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services, separately billable laboratory
tests, and separately billable drugs
furnished in ESRD facilities. When a
hospital-based or CAH-based renal
dialysis center (or their satellite) serves
as the originating site for a Medicare
telehealth service, the originating site
facility fee is payable in addition to any
case-mix adjusted composite rate or, as
explained further below, any monthly
capitation payment (MCP) amount. The
originating site facility fee is a
separately billable Part B payment.
The Medicare composite rate for
ESRD facilities includes payment for
social and dietetic services to meet the
needs of the ESRD patient. To prevent
duplicate payment for services that the
renal dialysis center is required to
furnish directly, and for which payment
is included in the case-mix adjusted
composite rate, we will not pay
separately for the services of clinical
social workers (CSW), registered
dietitians, and nutrition professionals
furnished via telehealth to ESRD
outpatients in renal dialysis centers.
Physicians and practitioners
managing ESRD facility patients are
paid a monthly rate (the MCP) for most
outpatient maintenance dialysis-related
physician services furnished to a
Medicare ESRD beneficiary. The MCP
amount varies based on the number of
visits provided within each month and
the age of the ESRD beneficiary.
When the MCP is billed for ESRDrelated services with 2 or 3 visits per
month or for ESRD-related services with
4 or more visits per month, some of the
visits may be furnished as a telehealth
service. However, at least one visit per
month is required to be furnished by the
physician or practitioner in person to
examine the vascular access site. A
clinical examination of the vascular
access site must be furnished once per
month face-to-face (not as a telehealth
service) by a physician, nurse
practitioner, or physician’s assistant.
Consistent with existing policy, nonESRD-related physicians’ services may
be furnished via telehealth by the
physician or practitioner who furnishes
renal care or by another physician or
practitioner. These are services that are
not incidental to services furnished
during a dialysis session or office visits
necessitated by the renal condition. The
physician or practitioner must provide
documentation that the illness is not
related to the renal condition and that
the additional visits are medically
necessary. The Medicare contractor’s
medical staff determines whether
additional reimbursement is warranted
for treatment of the unrelated illness.
Medicare does not pay separately for
ESRD-related services furnished via
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telehealth that are covered by the MCP.
(See the CMS Internet-Only Medicare
Claims Processing Manual, Pub. 100–04,
Chapter 8, Section 140, for more
information on Medicare policy
regarding the monthly capitation
payment method for physicians’
services.)
Community Mental Health Centers
Section 149 of the MIPPA added
community mental health centers
(CMHCs), as defined in section
1861(ff)(3)(B) of the Act, to the list of
originating sites for Medicare telehealth
services. The Medicare statute
recognizes CMHCs as ‘‘providers of
services’’ for purposes of furnishing
partial hospitalization programs (PHP).
PHPs are structured and intensive
programs consisting of a group of
mental health services paid on a per
diem basis under the OPPS. A CMHC
receives a per diem payment for each
PHP day, which consists of a minimum
of three PHP services. The HCPCS codes
that are eligible for PHP services and
count towards the number of PHP
service units required to receive the per
diem payment were originally defined
in the April 7, 2000, OPPS final rule
with comment period (65 FR 18454).
The Medicare telehealth originating
site facility fee is not a PHP service and,
as such, it does not count towards the
number of PHP services for purposes of
determining payment to a CMHC for
partial hospitalization services. The
originating site facility fee is not
bundled into the per diem payment for
partial hospitalization. With respect to a
Medicare telehealth service furnished
by a physician or practitioner to a
beneficiary at a CMHC, the originating
site facility fee is separately payable
under Part B.
Consistent with existing policy,
physicians and practitioners furnishing
services to beneficiaries in CMHCs can
bill Medicare Part B for telehealth
services as long as the service would be
separately payable under the PFS when
furnished in a face-to-face encounter at
that location. However, as noted above,
PHP services furnished via telehealth
will not be included in the count of
services used to determine whether the
CMHC should receive a PHP per diem
payment. Rather, in order to avoid
duplicate payment, the facility is paid
for its role in furnishing telehealth
services through the originating site
facility fee. Regardless of whether the
CMHC has provided the minimum
number of PHP services to receive a per
diem payment, CMHCs can bill and
receive payment for the originating site
facility fee with respect to a Medicare
telehealth service that would otherwise
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be eligible for payment at the CMHC.
(See the CMS Internet-Only Medicare
Claims Processing Manual, Pub. 100–04,
Chapter 4, Section 260, for more
information on Medicare payment
policy regarding partial hospitalization
program services.)
The PHP per diem payment includes
the services of clinical social workers
(CSWs) and other support staff trained
to work with psychiatric patients. CSW
services furnished under a PHP are
included in the partial hospitalization
rate. To prevent duplicate payment for
services that the CMHC is required to
furnish and that are paid to the CMHC
through the PHP per diem payment,
Medicare does not pay separately for the
services of CSWs furnished via
telehealth to beneficiaries receiving
partial hospitalization services in a
CMHC.
Skilled Nursing Facilities
Section 149 of the MIPPA added
skilled nursing facilities (SNFs), as
defined in section 1819(a) of the
Medicare statute, to the list of
originating sites for Medicare telehealth
services. For residents in a covered Part
A SNF stay, the SNF receives a bundled
per diem payment under the SNF PPS
for all covered skilled nursing facility
services as defined under section
1888(e)(2)(A) of the statute. The
conforming amendment in section
149(b) of the MIPPA amended section
1888(e)(2)(A)(ii) of the Act to exclude
telehealth services furnished under
section 1834(m)(4)(C)(ii)(VII) of the
Medicare statute from the definition of
‘‘covered skilled nursing facility
services’’ that are paid under the SNF
PPS. Therefore, when a SNF serves as
the originating site for Medicare
telehealth services, the SNF can receive
separate payment for a telehealth
originating site facility fee even in those
instances where it also receives a
bundled per diem payment under the
SNF PPS for a resident’s covered Part A
stay. Moreover, not only would the
originating site facility fee be separately
billable outside of the SNF PPS, but so
would those professional services
(furnished at the distant site) that meet
the criteria specified in section
1834(m)(2)(A) of the Act for payment as
Medicare telehealth services. As
indicated previously, under section
1834(m)(2)(A) of the Act, telehealth is a
delivery mechanism for otherwise
payable Part B services; that is, services
which would be separately payable
under Part B if ‘‘* * * furnished
without the use of a telecommunications
system’’ (emphasis added). This means
that distant site professional services
can qualify for separate telehealth
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payment only to the extent that they are
not already included within a bundled
payment to the facility that serves as the
originating site. Thus, services
furnished to a SNF resident from the
distant site by a physician, physician
assistant, nurse practitioner, clinical
nurse specialist, certified nursemidwife, or qualified psychologist
would be separately billable as
telehealth services, as the services of all
of these practitioner types are excluded
from payment under the SNF PPS under
section 1888(e)(2)(A)(ii) of the Act.
However, the services of other
practitioners such as clinical social
workers (CSWs), registered dietitians,
and nutrition professionals are subject
to SNF consolidated billing when
furnished to the SNF’s Part A resident.
In order to avoid duplicate payment,
telehealth services furnished by these
practitioners would be separately
billable telehealth services only in those
cases where the SNF resident who
receives them is not in a covered Part A
stay.
Thus, for services that SNF residents
receive during the course of a covered
Part A stay, the MIPPA’s designation of
a SNF as a telehealth setting effectively
leaves unchanged the scope of the
bundled per diem payment that the SNF
PPS makes for the covered stay itself.
Accordingly, the use of telehealth as a
vehicle for service delivery would not
serve to bundle types of services (such
as those of physicians) that are
otherwise separately payable under Part
B when furnished to such residents, nor
would it serve to unbundle types of
services (such as those of CSWs) that are
otherwise included within the bundled
SNF PPS payment.
In order to reflect this conforming
amendment, we are revising the
implementing regulations at
§ 411.15(p)(2) to include an additional
clause, which specifies that types of
services that would otherwise be
excluded from SNF consolidated billing
when furnished in a face-to-face
encounter are also excluded when
furnished via telehealth under section
1834(m)(4)(C)(ii)(VII) of the Act.
Consistent with the preceding
discussion, this revision serves to clarify
that a type of service (such as a
physician service) that is otherwise
excluded from SNF consolidated billing
does not become subject to that
provision merely by virtue of being
furnished via telehealth. Similarly, we
are including a conforming change in
the regulations at § 489.20(s) that
specify compliance with consolidated
billing as a requirement under the SNF’s
Medicare provider agreement.
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N. Section 153: Renal Dialysis
Provisions
The following changes affecting
payment to ESRD facilities for ESRD
services are effective January 1, 2009:
• Under section 153(a)(1) of the
MIPPA, the ESRD composite rate is
increased by 1.0 percent for dialysis
services furnished on or after January 1,
2009, and before January 1, 2010. This
will require us to update the adjusted
drug add-on adjustment as explained in
section H of the preamble of this final
rule.
• Section 153(a)(2) of the MIPPA
requires that the composite rate paid to
hospital-based facilities be the same as
the composite rate paid to independent
renal dialysis facilities for services
furnished on or after January 1, 2009. In
addition, section 153(a)(2) of the MIPPA
requires that in applying the geographic
index to hospital-based facilities, the
labor share shall be based on the labor
share otherwise applied for renal
dialysis facilities. Accordingly, we are
revising § 413.174, which describes the
methodology for ESRD composite rates
for hospital-based and independent
facilities, to conform to the statutory
requirement. These MIPPA provisions
are self-implementing and require no
substantive exercise of discretion on the
part of the Secretary. They are discussed
further in section II. H of the preamble
of this final rule with comment period.
IV. Potentially Misvalued Services
Under the Physician Fee Schedule
A. Valuing Services Under the Physician
Fee Schedule
As explained in the CY 2009 PFS
proposed rule (73 FR 38582), the AMA
RUC provides recommendations to CMS
for the valuation of new and revised
codes, as well as codes identified as
misvalued under the 5-Year Review of
Work. On an ongoing basis, the RUC’s
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 5Year Review of physician work, there
continues to be concern that the
presence of many overvalued
procedures within the PFS
disadvantages primary care services and
creates distortions in the PFS. Critics
have stated the relative imbalance in the
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cprice-sewell on PROD1PC64 with RULES_2
number of codes for which the work
RVUs are increased rather than
decreased in the three 5-Year Reviews of
work RVUs.
The RUC has created the 5-Year
Review Identification Workgroup to
respond to these concerns regarding the
valuation of codes. The workgroup
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.
In the proposed rule, we indicated we
would 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 with comment period in
a manner consistent with the way we
address other RUC recommendations
and that the values for these services
would be published as interim values
for CY 2009.
In addition to the RUC’s work, we
believe that there are certain steps we
can take to help address the issue of
potentially misvalued services. A
discussion of these steps are outlined
below.
1. Updating High Cost Supplies
In the CY 2009 PFS proposed rule (73
FR 38582), we proposed a process to
update high-cost supplies over $150
every 2 years. In order to obtain the
typical price in the marketplace, we
outlined examples of acceptable
documentation and stated that we
would not accept documentation that
did not include specific pricing
information. We also noted that if
acceptable documentation was not
received within the proposed rule’s 60day comment period, we would use
prices from the Internet, retail vendors,
and supply catalogs to determine the
appropriate cost; and, that we would
use the lowest price identified by these
sources. Table 25 in the proposed rule
lists the top 65 high-cost supplies over
$150 which needed specialty input for
price updates.
Comment: We received many
comments on our proposed process.
Some commenters expressed support for
our proposal but others thought the
process was flawed and burdensome.
Some commenters stated that the third
year of the 4-year transition of the PE
RVUs to the bottom up methodology is
an inappropriate time to update pricing
and also believed that the repricing of
only the high-cost supplies over $150 is
unfair. MedPAC and others
recommended that we use an
independent entity to update this
pricing information in order to capture
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15:01 Nov 18, 2008
Jkt 217001
the ‘‘average transaction prices’’ that
reflect the discounts and rebates offered
by the manufacturers. Some
commenters submitted data on the highcost supplies listed on the table. Of the
65 high cost supplies listed, we received
data on 53.
Response: Although we received some
data in response to our request for
information on the top 65 high cost
supplies over $150, much of what we
received was not complete and did not
represent typical market prices. Many
specialty societies submitted quotes and
list prices from manufacturers for the
premier models of many supply items.
Where there are less expensive
alternatives for certain supply items,
most commenters did not report this
information so we could not determine
what a typical price would be. We
received no pricing information for
some items and commenters explained
the absence of some prices by saying a
particular product was no longer being
manufactured. In other cases, we
received incomplete pricing
information, for example, a typical stent
size was not indicated.
We appreciate the many thoughtful
comments we received on the proposed
process for updating high-cost supplies
and believe this is an important area to
consider when evaluating potentially
overvalued services. However, we have
decided not to finalize the proposed
process at this time, and not to revise
the prices for the supplies listed in the
table. We plan to research the
possibility of using an independent
contractor to assist us in obtaining
accurate pricing information. We plan to
study the limitations of the data we
received and determine how to revise
our proposed process to elicit better
data. We will propose a revised process
in future rulemaking.
2. Review of Services Often Billed
Together and the Possibility of
Expanding the Multiple Procedure
Payment Reduction (MPPR) to
Additional Non-Surgical Procedures
In the CY 2009 PFS proposed rule, we
stated that we plan to perform data
analysis on non-surgical CPT codes that
are often billed together (for example, 60
to 70 percent of the time). This would
determine if there are inequities in PFS
payments that are a result of variations
between services or in the
comprehensiveness of the codes used to
report the services or in the payment
policies applied to each (for example,
global surgery and MPPRs). The
rationale for the MPPR is that clinical
labor activities, supplies and equipment
may not be performed or furnished
twice when multiple procedures are
PO 00000
Frm 00158
Fmt 4701
Sfmt 4700
performed. We stated that we would
consider developing a proposal either to
bundle additional services or expand
application of the MPPR to additional
procedures.
Comment: MedPAC requested that we
consider duplicative physician work, as
well as PE, in any expansion of the
MPPR. Several specialty groups noted
that the AMA RUC has already taken
action to identify frequently occurring
code pairs. The commenters support the
AMA RUC’s recommendation that CMS
analyze data to identify nonsurgical CPT
codes that are billed together 90 to 95
percent of the time. Other commenters
did not believe a broad-based
application of the MPPR to non-surgical
services was appropriate.
Response: Based on the comments
received, we will continue to work with
the AMA RUC, MedPAC, and the
specialty societies to determine whether
there are additional services that should
be either bundled or subjected to a
MPPR.
B. Requested Approaches for the RUC
To Utilize
In the CY 2009 PFS proposed rule, we
identified methods that the AMA RUC
could undertake to assist in identifying
potentially misvalued services
including reviewing: (1) The Fastest
Growing Procedure Codes; (2) the
Harvard-Valued Codes; and (3) PE RVUs
(see 73 FR 38586).
Comment: We received many
comments on this issue from various
specialty groups and medical societies.
Some commenters supported our
proposed approaches and looked
forward to participating in the process,
while others expressed concern. Some
specialty societies are opposed to our
selection of the fastest growing
procedure codes based solely on their
rate of growth and total spending and
cautioned CMS to consider the clinical
justification for increased utilization
before making any decisions to reduce
the payment rates for these services.
The AMA and the AMA RUC both
look forward to working with CMS on
the review of the fastest growing
procedure codes and have developed
plans to address these codes. The AMA
RUC noted that there are 2,856 services
that contain Harvard-based time inputs
that have not been surveyed since the
Harvard studies. The AMA RUC
conducted an analysis of Harvardvalued services with utilization above
10,000 services per year, which resulted
in a list of 296 distinct services. The
AMA RUC believes it would be effective
to limit any review to these 296 services
or fewer. The AMA RUC also noted that
of the 296 services identified, 23 have
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already been identified by another
screen and are being reviewed.
MedPAC supports our plan to review
the fastest growing procedures codes,
services often furnished together, and
the Harvard-valued codes and believes
it is consistent with their previous
recommendations to CMS. MedPAC
disagrees with the process for
identifying misvalued services.
MedPAC believes that it is our
responsibility to identify potentially
misvalued services and that we should
establish a standing panel of experts to
help identify overvalued services and to
review AMA RUC recommendations.
The AMA RUC, MedPAC and other
specialty societies requested that we
clarify the timing of the 5-Year Review
of PE RVUs. The AMA RUC believes
that the increases to PE RVUs for some
codes are not attributable to the direct
inputs of the codes under the PE
methodology transition. Rather, the
AMA RUC believes the increases are
attributable to our acceptance and
incorporation of supplemental survey
data for certain specialties. MedPAC
supports the review of PE inputs for the
fastest growing procedure codes.
MedPAC also requests that CMS and the
AMA RUC review the PE inputs of highvolume codes, particularly those whose
inputs are not based on physician
surveys.
Response: We look forward to
continuing to work with the AMA RUC
in reviewing these issues and receiving
alternative approaches for identifying
misvalued codes from the specialty
societies. We are aware that these
approaches are long-term and will
require time and effort from the AMA
RUC and specialty societies to complete
these reviews. We also believe the
outlined approaches will address
MedPAC’s concerns. In selecting these
codes and reviewing the AMA RUC’s
recommendations regarding misvalued
codes we have taken into consideration
whether there is a clinical rationale for
increased utilization, and we will
continue to take this into consideration
in future reviews.
C. AMA RUC Review of Potentially
Misvalued Codes
The AMA RUC started to review
potentially misvalued codes using
various screens, including codes with
site of service and high IWPUT
anomalies and high volume and a new
technology designation, at the 2008
AMA RUC meetings. Review of the
identified clinical services revealed 204
codes. Of those codes, 48 were
recommended for a reduction in
valuation; 38 were recommended to
maintain the same valuation; 105 were
referred to CPT for further code
clarification; and 13 were recommended
for an increase in valuation.
All of these codes were reviewed and
revalued by the AMA RUC; other than
the codes referred to CPT, we have
agreed to accept the valuation for these
codes for CY 2009, including the
conforming changes to the PE inputs for
these codes, as applicable. We recognize
that many of the site of service anomaly
code changes included deletion or
modification of hospital days, office
visits, intraservice time, and discharge
day management services. We have
concerns that the methodology used by
the AMA RUC to review the services
may have resulted in removal of
hospital days and deletion or
reallocation of office visits without
extraction of the associated RVUs. We
also have concerns about the
methodology used to value the high
IWPUT and new technology codes. We
note that the high volume codes have
been referred to CPT.
Although we have some questions or
concerns with certain aspects of the
AMA RUC reviews of these codes, we
69883
believe the AMA RUC-recommended
valuations are still a better
representation of the resources used to
furnish these services than the current
valuations. We will continue to examine
the AMA RUC recommendations and
will consider whether it would be
appropriate to propose further changes
in future rulemaking.
During the review of the above-noted
potentially misvalued codes, the AMA
RUC identified three codes that they
believed needed review for purposes of
the PE inputs only including CPT codes
52214, 52224, and 94770. CPT codes
52214 and 52224 were identified by the
high volume growth screen. As a result,
the AMA RUC identified a duplication
of the PE inputs that included supplies
and equipment for both the laser and
electrocautery techniques and
recommended this duplication be
eliminated. After a review of the PE
inputs in October 2008, the AMA RUC
recommended that the electrocautery PE
inputs be deleted. We agree with this
recommendation and have made these
changes in the PE database.
CPT code 94770 was identified
through the high IWPUT screen. In
reviewing this diagnostic procedure, the
AMA RUC and the specialty society
agreed that this test is currently being
used inappropriately in the nonfacility
setting. The AMA RUC agreed with the
specialty society that this procedure is
medically appropriate only in the
facility setting (provided at the patient’s
bedside) and that it should not be
valued in the nonfacility setting.
Therefore, the AMA RUC recommended
that all of the PE inputs be removed
from the nonfacility setting. We have
accepted the AMA’s RUC
recommendation and we have changed
the PE database to reflect these changes.
Table 26 includes codes identified in
the screens identified above, as well as
other CMS requests.
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES
AMA
RUC
rec
CPT code
Descriptor
11043 .............
Debride tissue/
muscle.
Debride tissue/
bone.
Skin tissue rearrangement.
Skin tissue rearrangement.
Skin tissue rearrangement.
Skin tissue rearrangement.
Skin tissue rearrangement.
11044 .............
cprice-sewell on PROD1PC64 with RULES_2
14000 .............
14001 .............
14020 .............
14021 .............
14040 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
3.04
X
................
................
................
................
................
Agree .............
4.11
X
................
................
................
................
................
6.19
Agree .............
6.19
X
................
................
................
................
................
8.58
Agree .............
8.58
X
................
................
................
................
................
7.02
Agree .............
7.02
X
................
................
................
................
................
9.52
Agree .............
9.52
X
................
................
................
................
................
8.44
Agree .............
8.44
X
................
................
................
................
................
Fmt 4701
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CMS decision
2009
WRVU
CPT
Agree .............
CPT
Jkt 217001
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TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
14041 .............
Skin tissue rearrangement.
Skin tissue rearrangement.
Skin tissue rearrangement.
Skin tissue rearrangement.
Form skin pedicle flap.
Form skin pedicle flap.
Form skin pedicle flap.
Form skin pedicle flap.
Island pedicle
flap graft.
Destruction of
skin lesions.
Destruction of
skin lesions.
Destruction of
skin lesions.
Breast reconstruction.
Incision of deep
abscess.
Removal of
bone for graft.
Removal of
bone for graft.
Resection of facial tumor.
Excision of
bone, lower
jaw.
Remove tumor
neck/chest.
Remove tumor,
back.
Neck spine fusion.
Apply spine
prosth device.
Remove abdominal wall
lesion.
Removal of
shoulder lesion.
Partial removal,
collar bone.
Repair rotator
cuff, acute.
Repair rotator
cuff, chronic.
Release of
shoulder ligament.
Repair of shoulder.
Remove wrist/
forearm lesion.
Transplant forearm tendon.
Explore/treat
finger joint.
14060 .............
14061 .............
14300 .............
15570 .............
15572 .............
15574 .............
15576 .............
15740 .............
17106 .............
17107 .............
17108 .............
19357 .............
20005 .............
20900 .............
20902 .............
21015 .............
21025 .............
21557 .............
21935 .............
22554 .............
22851 .............
22900 .............
23076 .............
23120 .............
23410 .............
23412 .............
23415 .............
cprice-sewell on PROD1PC64 with RULES_2
23420 .............
25116 .............
25310 .............
26080 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
CMS decision
2009
WRVU
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
10.63
Agree .............
10.63
X
................
................
................
................
................
9.07
Agree .............
9.07
X
................
................
................
................
................
11.25
Agree .............
11.25
X
................
................
................
................
................
CPT
Agree .............
13.26
X
................
................
................
................
X
10.00
Agree .............
10.00
X
................
................
................
................
................
9.94
Agree .............
9.94
X
................
................
................
................
................
10.52
Agree .............
10.52
X
................
................
................
................
................
9.24
Agree .............
9.24
X
................
................
................
................
................
CPT
Agree .............
11.57
X
................
................
................
................
X
3.61
Agree .............
3.61
................
X
................
................
................
................
4.68
Agree .............
4.68
................
X
................
................
................
................
6.37
Agree .............
6.37
................
X
................
................
................
................
CPT
Agree .............
20.57
X
................
................
................
................
................
CPT
Agree .............
3.55
X
................
................
................
................
................
3.00
Agree .............
3.00
X
................
................
................
................
................
4.58
Agree .............
4.58
X
................
................
................
................
................
CPT
Agree .............
5.59
X
................
................
................
................
................
9.87
Agree .............
9.87
X
................
................
................
................
................
CPT
Agree .............
8.91
X
................
................
................
................
................
CPT
Agree .............
18.38
X
................
................
................
................
................
CPT
Agree .............
17.54
................
................
................
................
X
................
CPT
Agree .............
6.70
................
................
................
................
................
X
CPT
Agree .............
6.14
X
................
................
................
................
................
CPT
Agree .............
7.77
X
................
................
................
................
................
7.23
Agree .............
7.23
X
................
................
................
................
................
11.23
Agree .............
11.23
X
................
................
................
................
................
11.77
Agree .............
11.77
X
................
................
................
................
................
9.07
Agree .............
9.07
X
................
................
................
................
................
13.35
Agree .............
13.35
X
................
................
................
................
................
7.38
Agree .............
7.38
X
................
................
................
................
................
7.94
Agree .............
7.94
X
................
................
................
................
................
CPT
Agree .............
4.36
X
................
................
................
................
................
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69885
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
27048 .............
Remove hip/
pelvis lesion.
Remove femur
lesion/bursa.
Treat thigh fracture.
Treat thigh fracture.
Treat hip dislocation.
Remove tumor,
lower leg.
Remove lower
leg lesion.
Partial removal
of tibia.
Partial removal
of fibula.
Repair achilles
tendon.
Repair of achilles tendon.
Revise lower
leg tendon.
Revise lower
leg tendon.
Part removal of
ankle/heel.
Partial removal
of foot bone.
Correction of
bunion.
Fusion of foot
bones.
Fusion of foot
bones.
Partial amputation of toe.
Strapping of low
back.
Knee arthroscopy/surgery.
Insertion of
pulse generator.
Repair arterial
blockage.
Repair arterial
blockage.
Artherectomy,
percutaneous.
Artherectomy,
percutaneous.
Artherectomy,
percutaneous.
Artherectomy,
percutaneous.
Artherectomy,
percutaneous.
Artherectomy,
percutaneous.
Place catheter
in artery.
Routine
venipuncture.
Av fusion/forearm vein.
Av fusion direct
any site.
27062 .............
27244 .............
27245 .............
27250 .............
27615 .............
27619 .............
27640 .............
27641 .............
27650 .............
27654 .............
27690 .............
27691 .............
28120 .............
28122 .............
28296 .............
28725 .............
28730 .............
28825 .............
29220 .............
29888 .............
33213 .............
35470 .............
35474 .............
35490 .............
35491 .............
35492 .............
35493 .............
35494 .............
cprice-sewell on PROD1PC64 with RULES_2
35495 .............
36248 .............
36415 .............
36820 .............
36821 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
6.44
X
................
................
................
................
................
Agree .............
5.66
X
................
................
................
................
................
18.00
Agree .............
18.00
................
X
................
................
................
................
18.00
Agree .............
18.00
................
X
................
................
................
................
3.82
Agree .............
3.82
X
X
................
................
................
................
CPT
Agree .............
12.93
X
................
................
................
................
................
CPT
Agree .............
8.47
X
................
................
................
................
................
CPT
Agree .............
12.10
X
................
................
................
................
................
CPT
Agree .............
9.73
X
................
................
................
................
................
9.00
Agree .............
9.00
X
................
................
................
................
................
10.32
Agree .............
10.32
X
................
................
................
................
................
8.96
Agree .............
8.96
X
................
................
................
................
................
10.28
Agree .............
10.28
X
................
................
................
................
................
5.64
Agree .............
5.64
X
................
................
................
................
................
7.56
Agree .............
7.56
X
................
................
................
................
................
8.16
Agree .............
8.16
X
................
................
................
................
................
11.97
Agree .............
11.97
X
................
................
................
................
................
12.21
Agree .............
12.21
X
................
................
................
................
................
5.85
Agree .............
5.85
X
................
................
................
................
................
CPT
Agree .............
0.64
................
................
................
................
................
X
14.14
Agree .............
14.14
X
................
................
................
................
................
CPT
Agree .............
6.36
................
................
................
................
................
X
CPT
Agree .............
8.62
................
................
................
................
................
X
CPT
Agree .............
7.35
................
................
................
................
................
X
CPT
Agree .............
11.06
................
................
................
................
................
X
CPT
Agree .............
7.60
................
................
................
................
................
X
CPT
Agree .............
6.64
................
................
................
................
................
X
CPT
Agree .............
6.64
................
................
................
................
................
X
CPT
Agree .............
10.42
................
................
................
................
................
X
CPT
Agree .............
9.47
................
................
................
................
................
X
CPT
Agree .............
1.01
................
................
................
................
................
X
CPT
Agree .............
0.00
................
................
................
................
X
................
14.39
Agree .............
14.39
X
................
................
................
................
................
12.00
Agree .............
12.00
X
................
................
................
................
................
Fmt 4701
Sfmt 4700
CMS decision
2009
WRVU
CPT
Agree .............
5.66
Jkt 217001
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69886
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
36825 .............
Artery-vein
autograft.
Repair A–V aneurysm.
Ligation, leg
veins, open.
Explore deep
node(s), neck.
Repair palate,
pharynx/uvula.
Excise parotid
gland/lesion.
Excise parotid
gland/lesion.
Excise submaxillary gland.
Excision of rectal lesion.
Change bile
duct catheter.
Insert abdom
drain, temp.
Insert abdom
drain, perm.
Prp i/hern init
block > 5 yr.
Rerepair ing
hernia,
blocked.
Rpr umbil hern,
block > 5 yr.
Insert ureteral
support.
Drain bl w/cath
insertion.
Complex
cystometrogram.
Urethra pressure profile.
Urine voiding
pressure
study.
Intra-abdominal
pressure test.
Cysto w/ureter
stricture tx.
Cysto w/up
stricture tx.
Cysto w/renal
stricture tx.
Cysto/uretero,
stricture tx.
Cysto/uretero
w/up stricture.
Cystouretero w/
renal strict.
Cystouretero w/
congen repr.
Revision of
bladder neck.
Relieve bladder
contracture.
Insert uro/ves
nck sphincter.
Insert multicomp penis
pros.
Remove/replace
penis prosth.
36834 .............
37760 .............
38542 .............
42145 .............
42415 .............
42420 .............
42440 .............
45170 .............
47525 .............
49420 .............
49421 .............
49507 .............
49521 .............
49587 .............
50605 .............
51102 .............
51726 .............
51772 .............
51795 .............
51797 .............
52341 .............
52342 .............
52343 .............
52344 .............
52345 .............
52346 .............
52400 .............
52500 .............
cprice-sewell on PROD1PC64 with RULES_2
52640 .............
53445 .............
54405 .............
54410 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
CMS decision
2009
WRVU
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
10.00
Agree .............
10.00
X
................
................
................
................
................
CPT
Agree .............
11.11
X
................
................
................
................
................
CPT
Agree .............
10.69
X
................
................
................
................
................
7.85
Agree .............
7.85
X
................
................
................
................
................
9.63
Agree .............
9.63
X
................
................
................
................
................
17.99
Agree .............
17.99
X
................
................
................
................
................
20.87
Agree .............
20.87
X
................
................
................
................
................
7.05
Agree .............
7.05
X
................
................
................
................
................
CPT
Agree .............
12.48
X
................
................
................
................
................
1.54
Agree .............
1.54
................
X
................
................
................
................
CPT
Agree .............
2.22
X
................
................
................
................
................
CPT
Agree .............
5.87
X
................
................
................
................
................
9.97
Agree .............
9.97
X
................
................
................
................
................
12.36
Agree .............
12.36
X
................
................
................
................
................
7.96
Agree .............
7.96
X
................
................
................
................
................
CPT
Agree .............
16.66
................
................
................
................
................
X
2.70
Agree .............
2.70
X
................
................
................
................
................
CPT
Agree .............
1.71
................
................
................
................
X
................
CPT
Agree .............
1.61
................
................
................
................
X
X
CPT
Agree .............
1.53
................
................
................
................
X
................
CPT
Agree .............
0.80
................
................
................
................
X
................
5.35
Agree .............
5.35
X
................
................
................
................
................
5.85
Agree .............
5.85
X
................
................
................
................
................
6.55
Agree .............
6.55
X
................
................
................
................
................
7.05
Agree .............
7.05
X
................
................
................
................
................
7.55
Agree .............
7.55
X
................
................
................
................
................
8.58
Agree .............
8.58
X
................
................
................
................
................
8.66
Agree .............
8.66
X
................
................
................
................
................
7.99
Agree .............
7.99
X
................
................
................
................
................
4.73
Agree .............
4.73
X
................
................
................
................
................
15.21
Agree .............
15.21
X
................
................
................
................
................
14.39
Agree .............
14.39
X
................
................
................
................
................
15.00
Agree .............
15.00
X
................
................
................
................
................
Fmt 4701
Sfmt 4700
Jkt 217001
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Frm 00162
E:\FR\FM\19NOR2.SGM
19NOR2
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
69887
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
54530 .............
Removal of testis.
Lapro radical
prostetectomy.
Partial removal
of vulva.
Insert uteri
tandems/
ovoids.
Revise/remove
sling repair.
Repair bladder
defect.
Partial removal
of thyroid.
Partial removal
of thyroid.
Insrt/redo
neurostim 1
array.
Epidural lysis
mult sessions.
Implant spinal
canal cath.
Remove spinal
canal catheter.
Insert spine infusion device.
Implant spine
infusion pump.
Implant spine
infusion pump.
Remove spine
infusion device.
Neck spine disk
surgery.
Implant
neuroelectrodes.
Revise/remove
neuroelectrode.
Insrt/redo spine
n generator.
Revise/remove
neuroreceiver.
N block cont infuse, B plex.
N block inj, sciatic, cont inf.
N block inj, fem,
cont inf.
N block inj, lumbar plexus.
Inj paravertebral
C/T.
Inj paravertebral
C/T add on.
Inj paravertbral
L/S.
Inj paravertbral
L/S add on.
Inj foramen epidural l/s.
Inj foramen epidural add-on.
55866 .............
56620 .............
57155 .............
57287 .............
57288 .............
60220 .............
60225 .............
61885 .............
62263 .............
62350 .............
62355 .............
62360 .............
62361 .............
62362 .............
62365 .............
63075 .............
63650 .............
63660 .............
63685 .............
63688 .............
64416 .............
64446 .............
64448 .............
64449 .............
64470 .............
cprice-sewell on PROD1PC64 with RULES_2
64472 .............
64475 .............
64476 .............
64483 .............
64484 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
8.35
X
................
................
................
................
................
Agree .............
32.25
................
................
X
................
................
X
7.35
Agree .............
7.35
X
................
................
................
................
................
CPT
Agree .............
6.79
X
................
................
................
................
................
10.97
Agree .............
10.97
X
................
................
................
................
................
12.00
Agree .............
12.00
................
................
X
................
................
................
12.29
Agree .............
12.29
X
................
................
................
................
................
14.67
Agree .............
14.67
X
................
................
................
................
................
7.37
Agree .............
7.37
X
................
................
................
................
................
6.41
Agree .............
6.41
X
................
................
................
................
................
6.00
Agree .............
6.00
X
................
................
................
................
................
4.30
Agree .............
4.30
X
................
................
................
................
................
4.28
Agree .............
4.28
X
................
................
................
................
................
5.60
Agree .............
5.60
X
................
................
................
................
................
6.05
Agree .............
6.05
X
................
................
................
................
................
4.60
Agree .............
4.60
X
................
................
................
................
................
CPT
Agree .............
19.47
................
................
................
................
X
................
7.15
Agree .............
7.15
X
................
................
................
................
................
CPT
Agree .............
6.87
X
................
................
................
................
X
6.00
Agree .............
6.00
X
................
................
................
................
................
5.25
Agree .............
5.25
X
................
................
................
................
................
CPT
Agree .............
3.85
X
................
................
................
................
................
CPT
Agree .............
3.61
X
................
................
................
................
X
CPT
Agree .............
3.36
X
................
................
................
................
X
CPT
Agree .............
3.24
X
................
................
................
................
................
CPT
Agree .............
1.85
................
................
................
................
................
X
CPT
Agree .............
1.29
................
................
................
................
................
X
CPT
Agree .............
1.41
................
................
................
................
................
X
CPT
Agree .............
0.98
................
................
................
................
................
X
CPT
Agree .............
1.90
................
................
................
................
................
X
CPT
Agree .............
1.33
................
................
................
................
................
X
Fmt 4701
Sfmt 4700
CMS decision
2009
WRVU
8.35
Agree .............
CPT
Jkt 217001
PO 00000
Frm 00163
E:\FR\FM\19NOR2.SGM
19NOR2
69888
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
64555 .............
Implant
neuroelectrodes.
Implant
neuroelectrodes.
Implant
neuroelectrodes.
Destr
paravertebrl
nerve l/s.
Destr
paravertebral
n add-on.
Destr
paravertebrl
nerve c/t.
Destr
paravertebral
n add-on.
Revise arm/leg
nerve.
Revision of sciatic nerve.
Repair of digit
nerve.
Repair of eye
wound.
Cataract surgery, complex.
Treatment of
retinal lesion.
Treatment of
choroid lesion.
Eye
photodynamic
ther add-on.
Treatment of
retinal lesion.
Probe
nasolacrimal
duct.
Implant cochlear device.
Ct pelvis w/o
dye.
Ct pelvis w/o &
w/dye.
Ct abdomen w/
o & w/dye.
Ct angio abdom
w/o & w/dye.
Visualize A–V
shunt.
Artherectomy,
X-Ray exam.
Artherectomy,
X-Ray exam.
Artherectomy,
X-Ray exam.
Artherectomy,
X-Ray exam.
Artherectomy,
X-Ray exam.
Echo exam of
eye, water
bath.
64573 .............
64581 .............
64622 .............
64623 .............
64626 .............
64627 .............
64708 .............
64712 .............
64831 .............
65285 .............
66982 .............
67210 .............
67220 .............
67225 .............
67228 .............
68810 .............
69930 .............
72192 .............
72194 .............
74170 .............
74175 .............
75790 .............
75992 .............
75993 .............
cprice-sewell on PROD1PC64 with RULES_2
75994 .............
75995 .............
75996 .............
76513 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
2.29
................
................
................
................
................
X
Agree .............
8.15
X
................
................
................
................
................
CPT
Agree .............
14.15
X
................
................
................
................
................
CPT
Agree .............
3.02
................
................
................
................
................
X
CPT
Agree .............
0.99
................
................
................
................
................
X
CPT
Agree .............
3.82
................
................
................
................
................
X
CPT
Agree .............
1.16
................
................
................
................
................
X
6.22
Agree .............
6.22
X
................
................
................
................
................
CPT
Agree .............
7.98
X
................
................
................
................
................
9.00
Agree .............
9.00
X
................
................
................
................
................
14.43
Agree .............
14.43
X
................
................
................
................
................
14.83
Agree .............
14.83
................
X
................
................
................
................
CPT
Agree .............
9.35
................
X
................
................
................
................
CPT
Agree .............
14.19
................
X
................
................
................
................
0.47
Agree .............
0.47
................
................
X
................
................
................
CPT
Agree .............
13.67
................
X
................
................
................
................
2.09
Agree .............
2.09
X
................
................
................
................
................
17.60
Agree .............
17.60
X
................
................
................
................
................
CPT
Agree .............
1.09
................
................
................
................
................
X
CPT
Agree .............
1.22
................
................
................
................
X
X
CPT
Agree .............
1.40
................
................
................
................
X
................
CPT
Agree .............
1.90
................
................
................
................
................
X
CPT
Agree .............
1.84
................
................
................
................
X
................
CPT
Agree .............
0.54
................
................
................
................
................
X
CPT
Agree .............
0.36
................
................
................
................
................
X
CPT
Agree .............
1.31
................
................
................
................
................
X
CPT
Agree .............
1.31
................
................
................
................
................
X
CPT
Agree .............
0.36
................
................
................
................
................
X
CPT
Agree .............
0.66
................
................
................
................
................
X
Fmt 4701
Sfmt 4700
CMS decision
2009
WRVU
CPT
Agree .............
8.15
Jkt 217001
PO 00000
Frm 00164
E:\FR\FM\19NOR2.SGM
19NOR2
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
69889
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
77427 .............
Radiation tx
management,
x5.
High intensity
brachytherapy.
Heart image
(3d), multiple.
Heart wall motion add-on.
Heart function
add-on.
Heart, first
pass, multiple.
Electrooculography.
Spontaneous
nystagmus
test.
Positional nystagmus test.
Optokinetic nystagmus test.
Oscillating
tracking test.
Comprehensive
hearing test.
Tympanometry
Acoustic refl
threshold tst.
Acoustic reflex
decay test.
Auditory function, 60 min.
Auditory function, + 15 min.
Tinnitus assessment.
Eval aud rehab
status.
Eval aud status
rehab add-on.
Aud brainstem
implt
programg.
ECG monitor/
report, 24
hours.
Echo
transthoracic.
Rt & Lt heart
catheters.
Injection, cardiac cath.
Injection, cardiac cath.
Injection for
heart x-rays.
Injection for
aortography.
Inject for coronary x-rays.
Imaging, cardiac cath.
Imaging, cardiac cath.
Electrophysiology evaluation.
Electrophysiology evaluation.
77782 .............
78465 .............
78478 .............
78480 .............
78483 .............
92270 .............
92541 .............
92542 .............
92544 .............
92545 .............
92557 .............
92567 .............
92568 .............
92569 .............
92620 .............
92621 .............
92625 .............
92626 .............
92627 .............
92640 .............
93236 .............
93350 .............
93526 .............
93539 .............
93540 .............
93543 .............
93544 .............
cprice-sewell on PROD1PC64 with RULES_2
93545 .............
93555 .............
93556 .............
93620 .............
93621 .............
VerDate Aug<31>2005
15:01 Nov 18, 2008
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
3.70
X
................
................
................
................
................
Agree .............
2.04
................
................
................
................
................
X
CPT
Agree .............
1.46
................
................
................
................
X
................
CPT
Agree .............
0.50
................
................
................
................
X
................
CPT
Agree .............
0.30
................
................
................
................
X
................
CPT
Agree .............
1.47
................
................
................
................
................
X
CPT
Agree .............
0.81
................
................
................
X
X
................
CPT
Agree .............
0.40
................
................
................
................
X
................
CPT
Agree .............
0.33
................
................
................
................
X
................
CPT
Agree .............
0.26
................
................
................
................
X
................
CPT
Agree .............
0.23
................
................
................
................
X
................
CPT
Agree .............
0.60
................
................
................
................
X
................
CPT
CPT
Agree .............
Agree .............
0.20
0.29
................
................
................
................
................
................
................
................
X
X
................
................
CPT
Agree .............
0.20
................
................
................
................
X
................
1.50
Agree .............
1.50
................
................
................
X
................
................
0.35
Agree .............
0.35
................
................
................
X
................
................
1.15
Agree .............
1.15
................
................
................
X
................
................
1.40
Agree .............
1.40
................
................
................
X
................
................
0.33
Agree .............
0.33
................
................
................
X
................
................
1.76
Agree .............
1.76
................
................
................
X
................
................
CPT
Agree .............
0.00
................
................
................
................
................
X
1.46
Agree .............
1.46
X
................
................
................
................
................
CPT
Agree .............
5.98
................
................
................
................
X
................
CPT
Agree .............
0.40
................
................
................
................
X
................
CPT
Agree .............
0.43
................
................
................
................
X
................
CPT
Agree .............
0.29
................
................
................
................
X
................
CPT
Agree .............
0.25
................
................
................
................
X
................
CPT
Agree .............
0.40
................
................
................
................
X
................
CPT
Agree .............
0.81
................
................
................
................
X
................
CPT
Agree .............
0.83
................
................
................
................
X
................
CPT
Agree .............
11.57
................
................
................
................
X
................
CPT
Agree .............
2.10
................
................
................
................
X
................
Fmt 4701
Sfmt 4700
CMS decision
2009
WRVU
CPT
Agree .............
CPT
Jkt 217001
PO 00000
Frm 00165
E:\FR\FM\19NOR2.SGM
19NOR2
69890
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 26—AMA RUC RECOMMENDATIONS FOR POTENTIALLY MISVALUED CODES—Continued
AMA
RUC
rec
CPT code
Descriptor
94681 .............
Exhaled air
analysis, o2/
co2.
Medical nutrition, indiv, in.
Med nutrition,
indiv, subseq.
MD recertification HHA
PT.
Home health
care supervision.
97802 .............
97803 .............
G0179 ............
G0181 ............
Site of
service
screen
High
IWPUT
screen
New tech
Shift from
PE to
work
Other
CMS
request
High
volume
0.20
................
................
................
................
................
X
Agree .............
0.53
................
................
................
................
X
................
0.45
Agree .............
0.45
................
................
................
................
X
................
CPT
Agree .............
0.45
................
................
................
................
................
X
CPT
Agree .............
1.73
................
................
................
................
................
X
CMS decision
2009
WRVU
CPT
Agree .............
0.53
Note: The RUC reviewed and
recommended work RVUs for 6 audiology
codes (CPT codes 92620, 92621, 92625,
92626, 92627, and 92640) with which we
have agreed. Under Medicare, audiology
services are provided under the diagnostic
test benefit. We recognize that some of the
work descriptors include ‘‘counseling,’’ ‘‘the
potential for remediation,’’ and the
establishment of ‘‘interventional goals.’’ We
do not believe those aspects fit within the
diagnostic test benefit but are interested in
receiving comments on this issue.
V. Refinement of Relative Value Units
for Calendar Year 2009 and Response
to Public Comments on Interim Relative
Value Units for 2008
cprice-sewell on PROD1PC64 with RULES_2
A. Summary of Issues Discussed Related
to the Adjustment of Relative Value
Units
Sections IV.B. and IV.C. of this final
rule with comment describe the
methodology used to review the
comments received on the RVUs for
physician work and the process used to
establish RVUs for new and revised CPT
codes. Changes to the RVUs and billing
status codes reflected in Addendum B
are effective for services furnished
beginning January 1, 2009.
B. Process for Establishing Work
Relative Value Units for the Physician
Fee Schedule
The CY 2008 PFS final rule with
comment period (72 FR 66365)
contained the work RVUs for Medicare
payment for existing procedure codes
under the PFS and interim RVUs for
new and revised codes beginning
January 1, 2008. We considered the
RVUs for the interim codes to be subject
to public comment under the annual
refinement process. In this section, we
address comments on the interim work
RVUs published in the CY 2008 PFS
final rule with comment period, and our
establishment of the work RVUs for new
and revised codes for the CY 2009 PFS.
VerDate Aug<31>2005
15:01 Nov 18, 2008
Jkt 217001
C. Interim 2008 Codes
1. Orthopedic Fracture Treatment Codes
Orthopedic fracture treatment codes
were originally part of the third 5-Year
Review of work RVUs. The codes were
referred by the AMA RUC to the AMA’s
CPT Editorial Panel for further
clarification because it was unclear
whether the previous valuation for these
codes included the circumstance when
both internal and external fixation is
applied to the fracture site. The CPT
Editorial Panel agreed the codes needed
further clarification and removed the
reference relating to external fixation
from the codes.
As a result, the AMA RUC examined
the various families of fracture codes
and recommended increased work
RVUs for most of the codes. The codes
were submitted to CMS as part of the
new and revised codes for CY 2008.
Although we agreed with the work RVU
recommendations and rank order listing
of the codes in each family, the increase
in valuation of the services created BN
issues within certain fracture code
families. In order to retain BN within
these families of codes, the work RVUs
associated with each code were
adjusted. That is, the work RVUs were
adjusted so that the sum of the new or
revised work RVUs (weighted by
projected frequency of use) for each
family would be the same as the sum of
the current work RVUs (weighted by
projected frequency of use) for each
family of codes.
Comment: Some commenters believed
these codes should have been
considered as part of the 5-Year review
process and the increase in work RVUs
should have been absorbed through the
BN work adjuster. The commenters also
disagreed with the application of BN
and noted that this created rank order
anomalies. The commenters requested
that if BN is applied, it should be
PO 00000
Frm 00166
Fmt 4701
Sfmt 4700
implemented across the entire fracture
family of codes, which would include
codes that have not been surveyed
(Harvard valued codes).
Response: The commenters did not
submit sufficient information to
demonstrate that the application of BN
created rank order anomalies for these
codes. We note that the base codes for
each fracture family of codes could be
submitted to the AMA RUC for revaluation. This would enable the codes
within the family, several of which have
not undergone an AMA RUC review, to
be properly aligned in comparison to
the base codes within each family.
2. Cardiac MRI Codes
For CY 2008, the CPT Editorial Panel
created eight new Cardiac Magnetic
Resonance Imaging (MRI) codes and
deleted five existing Cardiac MRI codes
due to technological changes and
advances in MRI scanning. We
established a national noncoverage
determination (NCD) for MRI when
blood flow velocity measurement is a
component, or comprises all, of the
service. As a result, we assigned a status
indicator of ‘‘N’’ (Noncovered) to four of
the new CPT codes (75558, 75560,
75562, and 75564).
Comment: Some commenters
expressed disappointment that these
four new MRI codes were designated as
noncovered and stated that they did not
believe the existing NCD for MRI is
applicable to flow and velocity
measurements.
Response: We have reviewed the
information submitted by the
commenters and the national
noncoverage determination. We have
determined that the existing NCD for
MRI is applicable to these codes because
blood flow/velocity quantification is
considered to be a component of these
services, which according to the NCD is
not considered reasonable and
E:\FR\FM\19NOR2.SGM
19NOR2
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
necessary, and therefore, is noncovered.
Any changes in coverage would have to
occur through the NCD process.
3. Non-Face-to-Face Physician and
Qualified Healthcare Professional
Services
For CY 2008, the CPT Editorial Panel
created eight new codes (CPT codes
98966, 98967, 98968, 98969, 99441,
99442, 99443, and 99444) to describe
Evaluation and Management (E/M)
services furnished by a physician or
qualified healthcare professional via
telephone or online, for which the AMA
RUC and the AMA’s Health Care
Professionals Advisory Committee
provided work and PE valuations. We
assigned a status indicator of ‘‘N’’
(Noncovered) to these services because:
(1) These services are non-face-to-face;
and (2) the code descriptors include
language that recognizes the provision
of services to parties other than the
beneficiary for whom Medicare does not
provide coverage (for example, a
guardian).
Comment: Some commenters
requested that we reconsider the
assignment of an N status for these
codes. The commenters believed that
failure to provide incentives and
funding for these codes affects the
alignment of quality of care between
providers.
Response: We have considered the
commenters’ request. However, we will
continue to recognize these services as
noncovered because they are not
furnished in a face-to-face setting (nor
are they furnished as Medicare
telehealth services), and the code
descriptors include language that
recognizes the provision of services to a
noncovered entity.
In the CY 2008 PFS final rule with
comment period (73 FR 66371), we also
responded to the AMA RUC
recommendations on the PE inputs for
the new and revised CPT codes for
2008. In addition to the PE comments
discussed in section II.A.2. of this final
rule with comment period, we received
the following comments concerning PE
inputs:
Comment: The specialty societies and
the AMA RUC provided clarification
and pricing information concerning
direct PE inputs for CPT Code 43760,
Change of gastrostomy tube,
percutaneous, without imaging or
endoscopic guidance.
Response: We have revised the PE
database to reflect this information.
Comment: Several commenters
questioned the PE RVUs for CPT code
68816, Probing of nasolacrimal duct,
with or without irrigation; with
transluminal balloon catheter dilation,
believing it to be undervalued. In
particular, one commenter stated that
the payment for this service is less than
a specific supply item.
Response: We have reviewed the PE
inputs for this service and determined
that they accurately represent the inputs
recommended by the AMA RUC. The
difference in the actual costs of the
direct PE inputs and the payment
amount for this service is due to the
application of the uniform BN
adjustment that is applied to all direct
inputs as part of the bottom-up PE
methodology.
D. Establishment of Interim Work
Relative Value Units for New and
Revised Physician’s Current Procedural
Terminology (CPT) Codes and New
Healthcare Common Procedure Coding
System Codes (HCPCS) for 2009
(Includes Table Titled ‘‘AMA RUC
Recommendations and CMS’ Decisions
for New and Revised 2009 CPT Codes’’)
One aspect of establishing RVUs for
2008 was to assign interim work RVUs
for all new and revised CPT codes. As
described in our November 25, 1992
notice on the 1993 PFS (57 FR 55951)
and in section III.B. of the CY 1997 PFS
69891
final rule (61 FR 59505), we established
a process, based on recommendations
received from the AMA RUC, for
establishing interim work RVUs for new
and revised codes.
We received work RVU
recommendations for 128 new and
revised CPT codes from the AMA RUC
this year. We reviewed the AMA RUC
recommendations by comparing them to
our reference set or to other comparable
services for which work RVUs had
previously been established. We also
considered the relationships among the
new and revised codes for which we
received AMA RUC recommendations
and agreed with the majority of the
relative relationships reflected in the
AMA RUC values. Table 27: AMA RUC
Recommendations and CMS’ Decisions
for New and Revised 2009 CPT Codes
lists the new or revised CPT codes, and
their associated work RVUs, that will be
interim in CY 2009. Table 27 includes
the following information:
• A ‘‘#’’ identifies a new code for CY
2009.
• CPT code. This is the CPT code for
a service.
• Modifier. A ‘‘26’’ in this column
indicates that the work RVUs are for the
PC of the code.
• Description. This is an abbreviated
version of the narrative description of
the code.
• AMA RUC recommendations. This
column identifies the work RVUs
recommended by the AMA RUC.
• CMS decision. This column
indicates whether we agreed or we
disagreed with the AMA RUC
recommendation. Codes for which we
did not accept the AMA RUC
recommendation are discussed in
greater detail following this table.
• 2009 Work RVUs. This column
establishes the interim 2009 work RVUs
for physician work.
TABLE 27—AMA RUC RECOMMENDATIONS AND CMS’ DECISIONS FOR NEW AND REVISED 2009 CPT CODES
cprice-sewell on PROD1PC64 with RULES_2
CPT 1 code
#20696 ...........
#20697 ...........
#22856 ...........
#22861 ...........
#22864 ...........
#27027 ...........
#27057 ...........
27215 .............
27216 .............
27217 .............
27218 .............
#35535 ...........
#35570 ...........
VerDate Aug<31>2005
AMA RUC
work RVU
recommendation
Mod
*
*
*
*
*
........
........
........
........
........
........
........
........
Descriptor
........
........
........
........
........
........
........
........
........
........
........
........
........
COMP MULTIPLANE EXT FIXATION ....................................
COMP EXT FIXATE STRUT CHANGE ..................................
CERV ARTIFIC DISKECTOMY ..............................................
REVISE CERV ARTIFIC DISC ...............................................
REMOVE CERV ARTIF DISC ................................................
BUTTOCK FASCIOTOMY ......................................................
BUTTOCK FASCIOTOMY W/DBRDMT .................................
TREAT PELVIC FRACTURE(S) .............................................
TREAT PELVIC RING FRACTURE ........................................
TREAT PELVIC RING FRACTURE ........................................
TREAT PELVIC RING FRACTURE ........................................
ARTERY BYPASS GRAFT .....................................................
ARTERY BYPASS GRAFT .....................................................
15:01 Nov 18, 2008
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E:\FR\FM\19NOR2.SGM
17.32
0.00
23.90
33.21
29.25
12.90
14.77
10.45
15.73
14.65
20.93
38.00
29.00
CMS
decision
Agree
Agree
Agree
Agree
Agree
Agree
Agree
Agree
Agree
Agree
Agree
Agree
Agree
19NOR2
.............
.............
.............
.............
.............
.............
.............
(a) ........
(a) ........
(a) ........
(a) ........
.............
.............
2009 WRVU
17.32
0.00
23.90
33.21
29.25
12.90
14.77
10.45
15.73
14.65
20.93
38.00
29.00
69892
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 27—AMA RUC RECOMMENDATIONS AND CMS’ DECISIONS FOR NEW AND REVISED 2009 CPT CODES—
Continued
cprice-sewell on PROD1PC64 with RULES_2
CPT 1 code
#35632 ...........
#35633 ...........
#35634 ...........
#41512 ...........
#41530 ...........
#43273 ...........
#43279 ...........
#46930 ...........
#49652 ...........
#49653 ...........
#49654 ...........
#49655 ...........
#49656 ...........
#49657 ...........
#55706 ...........
#61796 ...........
#61797 ...........
#61798 ...........
#61799 ...........
#61800 ...........
#62267 ...........
#63620 ...........
#63621 ...........
64416 .............
64446 .............
64448 .............
64449 .............
#64455 ...........
#64632 ...........
#65756 ...........
#65757 ...........
#77785 ...........
#77786 ...........
#77787 ...........
#78808 ...........
#90951 ...........
#90952 ...........
#90953 ...........
#90954 ...........
#90955 ...........
#90956 ...........
#90957 ...........
#90958 ...........
#90959 ...........
#90960 ...........
#90961 ...........
#90962 ...........
#90963 ...........
#90964 ...........
#90965 ...........
#90966 ...........
#90967 ...........
#90968 ...........
#90969 ...........
#90970 ...........
#93228 ...........
#93229 ...........
#93279 ...........
#93280 ...........
#93281 ...........
#93282 ...........
#93283 ...........
#93284 ...........
#93285 ...........
#93286 ...........
#93287 ...........
#93288 ...........
#93289 ...........
VerDate Aug<31>2005
AMA RUC
work RVU
recommendation
Mod
........
........
........
........
........
*
*
........
........
........
........
........
........
........
*
........
........
........
........
........
........
*
*
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
*
*
*
*
*
*
*
*
*
*
*
*
*
Descriptor
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
26
26
26
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
26
26
26
26
26
26
26
26
26
26
26
ARTERY BYPASS GRAFT .....................................................
ARTERY BYPASS GRAFT .....................................................
ARTERY BYPASS GRAFT .....................................................
TONGUE SUSPENSION ........................................................
TONGUE BASE VOL REDUCTION .......................................
ENDOSCOPIC PANCREATOSCOPY ....................................
LAP MYOTOMY, HELLER ......................................................
DESTROY INTERNAL HEMORRHOIDS ................................
LAP VENT/ABD HERNIA REPAIR .........................................
LAP VENT/ABD HERN PROC COMP ....................................
LAP INC HERNIA REPAIR .....................................................
LAP INC HERN REPAIR COMP ............................................
LAP INC HERNIA REPAIR RECUR .......................................
LAP INC HERN RECUR COMP .............................................
PROSTATE SATURATION SAMPLING .................................
SRS, CRANIAL LESION SIMPLE ...........................................
SRS, CRAN LES SIMPLE, ADDL ...........................................
SRS, CRANIAL LESION COMPLEX ......................................
SRS, CRAN LES COMPLEX, ADDL ......................................
APPLY SRS HEADFRAME ADD-ON .....................................
INTERDISCAL PERQ ASPIR, DX ..........................................
SRS, SPINAL LESION ............................................................
SRS, SPINAL LESION, ADDL ................................................
N BLOCK CONT INFUSE, B PLEX ........................................
N BLK INJ, SCIATIC, CONT INF ............................................
N BLOCK INJ FEM, CONT INF ..............................................
N BLOCK INJ, LUMBAR PLEXUS .........................................
N BLOCK INJ, PLANTAR DIGIT ............................................
N BLOCK INJ, COMMON DIGIT ............................................
CORNEAL TRNSPL, ENDOTHELIAL .....................................
PREP CORNEAL ENDO ALLOGRAFT ..................................
HDR BRACHYTX, 1 CHANNEL .............................................
HDR BRACHYTX, 2–12 CHANNEL .......................................
HDR BRACHYTX OVER 12 CHAN ........................................
IV INJ RA DRUG DX STUDY .................................................
ESRD SERV, 4 VISITS P MO, <2 ..........................................
ESRD SERV, 2–3 VSTS P MO, <2 ........................................
ESRD SERV, 1 VISIT P MO, <2 ............................................
ESRD SERV, 4 VSTS P MO, 2–11 ........................................
ESRD SRV 2–3 VSTS P MO, 2–11 .......................................
ESRD SRV, 1 VISIT P MO, 2–11 ...........................................
ESRD SRV, 4 VSTS P MO, 12–19 ........................................
ESRD SRV 2–3 VSTS P MO 12–19 ......................................
ESRD SERV, 1 VST P MO, 12–19 ........................................
ESRD SRV, 4 VISITS P MO, 20+ ..........................................
ESRD SRV, 2–3 VSTS P MO, 20+ ........................................
ESRD SERV, 1 VISIT P MO, 20+ ..........................................
ESRD HOME PT, SERV P MO, <2 ........................................
ESRD HOME PT SERV P MO, 2–11 .....................................
ESRD HOME PT SERV P MO 12–19 ....................................
ESRD HOME PT, SERV P MO, 20+ ......................................
ESRD HOME PT SERV P DAY, <2 .......................................
ESRD HOME PT SRV P DAY, 2–11 ......................................
ESRD HOME PT SRV P DAY 12–19 .....................................
ESRD HOME PT SERV P DAY, 20+ .....................................
REMOTE 30 DAY ECG REV/REPORT ..................................
REMOTE 30 DAY ECG TECH SUPP ....................................
PM DEVICE PROGR EVAL, SNGL ........................................
PM DEVICE PROGR EVAL, DUAL ........................................
PM DEVICE PROGR EVAL, MULTI .......................................
ICD DEVICE PROG EVAL, 1 SNGL ......................................
ICD DEVICE PROGR EVAL, DUAL .......................................
ICD DEVICE PROGR EVAL, MULT .......................................
ILR DEVICE EVAL PROGR ....................................................
PRE-OP PM DEVICE EVAL ...................................................
PRE-OP ICD DEVICE EVAL ..................................................
PM DEVICE EVAL IN PERSON .............................................
ICD DEVICE INTERROGATE .................................................
15:01 Nov 18, 2008
Jkt 217001
PO 00000
Frm 00168
Fmt 4701
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E:\FR\FM\19NOR2.SGM
36.00
38.98
35.20
6.75
4.38
2.24
22.00
1.56
12.80
16.10
14.95
18.00
15.00
22.00
6.15
15.50
3.48
19.75
4.81
2.25
3.00
15.50
4.00
1.81
1.81
1.63
1.81
0.75
1.20
16.60
1.44
1.42
3.25
4.89
0.18
18.46
(2 )
(2 )
15.98
8.79
5.95
12.52
8.34
5.50
5.18
4.26
3.15
10.56
9.14
8.69
4.26
0.35
0.30
0.29
0.14
0.52
0.00
0.65
0.77
0.90
0.85
1.18
1.25
0.52
0.30
0.45
0.43
0.92
CMS
decision
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Disagree ........
19NOR2
2009 WRVU
36.00
38.98
35.20
6.75
4.38
2.24
22.00
1.56
12.80
16.10
14.95
18.00
15.00
22.00
6.15
10.79
3.48
10.79
4.81
2.25
3.00
10.79
4.00
1.81
1.81
1.63
1.81
0.75
1.20
16.60
(2 )
1.42
3.25
4.89
0.18
18.46
(2 )
(2 )
15.98
8.79
5.95
12.52
8.34
5.50
5.18
4.26
3.15
10.56
9.14
8.69
4.26
0.35
0.30
0.29
0.14
0.52
(2 )
0.65
0.77
0.90
0.85
1.05
1.25
0.52
0.30
0.45
0.43
0.78
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
69893
TABLE 27—AMA RUC RECOMMENDATIONS AND CMS’ DECISIONS FOR NEW AND REVISED 2009 CPT CODES—
Continued
CPT 1 code
#93290
#93291
#93292
#93293
#93294
#93295
#93296
#93297
#93298
#93299
#93306
#93351
#93352
#95803
#95992
#96360
#96361
#96365
#96366
#96367
#96368
#96369
#96370
#96371
#96372
#96373
#96374
#96375
#96376
#96379
#99460
#99461
#99462
#99463
#99464
#99465
#99466
#99467
#99468
#99469
#99471
#99472
#99475
#99476
#99478
#99479
#99480
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
AMA RUC
work RVU
recommendation
Mod
*
*
*
*
*
*
*
*
*
*
*
*
*
*
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
Descriptor
26
26
26
26
26
26
........
........
........
........
26
........
........
26
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
ICM DEVICE EVAL .................................................................
ILR DEVICE INTERROGATE .................................................
WCD DEVICE INTERROGATE ..............................................
PM PHONE R-STRIP DEVICE EVAL .....................................
PM DEVICE INTERROGATE REMOTE .................................
ICD DEVICE INTERROGAT REMOTE ..................................
PM/ICD REMOTE TECH SERV .............................................
ICM DEVICE INTERROGAT REMOTE ..................................
ILR DEVICE INTERROGAT REMOTE ...................................
ICM/ILR REMOTE TECH SERV .............................................
TTE W/DOPPLER, COMPLETE .............................................
STRESS TTE COMPLETE .....................................................
ADMIN ECG CONTRAST AGENT .........................................
ACTIGRAPHY TESTING ........................................................
CANALITH REPOSITIONING PROC .....................................
HYDRATION IV INFUSION, INIT ...........................................
HYDRATE IV INFUSION, ADD-ON ........................................
THER/PROPH/DIAG IV INF, INIT ...........................................
THER/PROPH/DIAG IV INF ADDON .....................................
TX/PROPH/DG ADDL SEQ IV INF .........................................
THER/DIAG CONCURRENT INF ...........................................
SC THER INFUSION, UP TO 1 HR .......................................
SC THER INFUSION, ADDL HR ............................................
SC THER INFUSION, RESET PUMP ....................................
THER/PROPH/DIAG INJ, SC/IM ............................................
THER/PROPH/DIAG INJ, IA ...................................................
THER/PROPH/DIAG INJ, IV PUSH ........................................
TX/PRO/DX INJ NEW DRUG ADDON ...................................
TX/PRO/DX INJ NEW DRUG ADON ......................................
THER/PROP/DIAG INJ/INF PROC .........................................
INIT NB EM PER DAY, HOSP ...............................................
INIT NB EM PER DAY, NON-FAC .........................................
SBSQ NB EM PER DAY, HOSP ............................................
SAME DAY NB DISCHARGE .................................................
ATTENDANCE AT DELIVERY ...............................................
NB RESUSCITATION .............................................................
PED CRIT CARE TRANSPORT .............................................
PED CRIT CARE TRANSPORT ADDL ..................................
NEONATE CRIT CARE, INITIAL ............................................
NEONATE CRIT CARE, SUBSQ ............................................
PED CRITICAL CARE, INITIAL ..............................................
PED CRITICAL CARE, SUBSQ ..............................................
PED CRIT CARE AGE 2–5, INIT ...........................................
PED CRIT CARE AGE 2–5, SUBSQ ......................................
IC, LBW INF < 1500 GM SUBSQ ...........................................
IC LBW INF 1500–2500 G SUBSQ ........................................
IC INF PBW 2501–5000 G SUBSQ ........................................
0.43
0.43
0.43
0.32
0.65
1.38
0.00
0.52
0.52
0.00
1.30
1.75
0.19
1.00
0.75
0.17
0.09
0.21
0.18
0.19
0.17
0.21
0.18
0.00
0.17
0.17
0.18
0.10
0.00
0.00
1.17
1.26
0.62
1.50
1.50
2.93
4.79
2.40
18.46
7.99
15.98
7.99
11.25
6.75
2.75
2.50
2.40
CMS
decision
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Disagree ........
Agree .............
Agree .............
Agree .............
Disagree ........
Agree (b) ........
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
Agree .............
2009 WRVU
0.43
0.43
0.43
0.32
0.65
1.17
0.00
0.52
0.52
(2 )
1.30
1.75
0.19
(2 )
(3 )
0.17
0.09
0.21
0.18
0.19
0.17
0.21
0.18
0.00
0.17
0.17
0.18
0.10
0.00
0.00
1.17
1.26
0.62
1.50
1.50
2.93
4.79
2.40
18.46
7.99
15.98
7.99
11.25
6.75
2.75
2.50
2.40
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# New CPT code.
1 All CPT codes copyright 2008 American Medical Association.
2 Medicare Contractor Priced.
3 Bundled.
* New Code for Re-Examination at the next 5-Year Review.
(a) See code discussion in section E, Discussion of Codes and RUC Recommendations.
(b) RUC-recommended work RVU accepted but coverage status of code is Bundled.
Table 28: AMA RUC Anesthesia
Recommendations and CMS Decisions
for New 2009 CPT Codes lists the new
CPT codes for anesthesia and their base
units that will be interim in CY 2009.
Table 28 includes the following
information:
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• CPT code. This is the CPT code for
a service.
• Description. This is an abbreviated
version of the narrative description of
the code.
• AMA RUC recommendations. This
column identifies the base units
recommended by the AMA RUC.
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• CMS decision. This column
indicates whether we agreed or we
disagreed with the AMA RUC
recommendation.
• 2009 Base Units. This column
establishes the CY 2009 base units for
these services.
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TABLE 28—AMA RUC ANESTHESIA RECOMMENDATIONS AND CMS DECISIONS FOR NEW AND REVISED/REVIEWED CPT
CODES
RUC
recommendation
*CPT 1 code
Description
#00211 ..........................
#00567 ..........................
ANESTH, CRAN SURG, HEMOTOMA ..............
ANESTH, CABG W/PUMP .................................
10.00
18.00
CMS decision
Agree ...........................................
Agree ...........................................
2009 base
units
10.00
18.00
1 All CPT codes copyright 2008 American Medical Association.
# New CPT code.
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E. Discussion of Codes and AMA RUC
Recommendations
The following is an explanation of our
rationale for not accepting particular
AMA RUC-recommended work RVUs. It
is arranged by type of service in CPT
order and refers only to work RVUs.
1. Pelvic Bone Fracture Codes
For CY 2009, the CPT Editorial Panel
revised the following four CPT codes to
report pelvic bone fractures as being
unilateral, and reportedly, to clarify the
nature of ring fractures as follows:
• 27215, Open treatment of iliac
spine(s), tuberosity avulsion, or iliac
wing fractures(s), unilateral for pelvic
bone fracture patterns which do not
disrupt the pelvic ring includes internal
fixation, when performed.
• 27216, Percutaneous skeletal
fixation of posterior pelvic bone fracture
and/or dislocation, for fracture patterns
which disrupt the pelvic ring, unilateral,
(includes ipsilateral ilium, sacroiliac
joint and/or sacrum).
• 27217, Open treatment of anterior
pelvic bone fracture and/or dislocation
for fracture patterns which disrupt the
pelvic ring, unilateral includes internal
fixation when performed (includes
ipsilateral pubic symphysis and/or
superior/inferior rami).
• 27218, Open treatment of posterior
pelvic bone fracture and/or dislocation,
for fracture patterns which disrupt the
pelvic ring, unilateral, includes internal
fixation, when performed (includes
ipsilateral ilium, sacroiliac joint and/or
sacrum.
The AMA RUC reviewed these codes
and agreed with the specialty society
that revisions to the code descriptors
were editorial because these services
were previously valued as typically
unilateral with internal fixation. The
AMA RUC recommended maintaining
the current work RVUs for these codes:
10.45 work RVUs for CPT code 27215;
15.73 work RVUs for CPT code 27216;
14.65 work RVUs for CPT code 27217;
and 20.93 work RVUs for CPT code
27218.
We do not agree with CPT and the
AMA RUC that the pelvis is a unilateral
structure and that the code descriptor
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change was editorial. The pelvis is
formed by adjoining the ilium, ischium,
pubis, and sacrum together. Clinically,
it is a single anatomic entity and has
been referenced as a single anatomic
entity. We believe the previous code
descriptors more accurately describe the
structure of the pelvis and subsequent
treatment of fractures. Therefore, we
created four G codes to be used with
pelvic bone fracture repairs that may
occur on one side or both sides of the
pelvis consistent with CY 2008
descriptors. We believe the following
codes represent these services more
appropriately:
• G0412, Open treatment of iliac
spine(s), tuberosity avulsion, or iliac
wing fractures(s), unilateral or bilateral
for pelvic bone fracture patterns which
do not disrupt the pelvic ring includes
internal fixation, when performed.
• G0413, Percutaneous skeletal
fixation of posterior pelvic bone fracture
and/or dislocation, for fracture patterns
which disrupt the pelvic ring, unilateral
or bilateral, (includes ilium, sacroiliac
joint and/or sacrum).
• G0414, Open treatment of anterior
pelvic bone fracture and/or dislocation
for fracture patterns which disrupt the
pelvic ring, unilateral or bilateral,
includes internal fixation when
performed (includes pubic symphysis
and/or superior/inferior rami).
• G0415, Open treatment of posterior
pelvic bone fracture and/or dislocation,
for fracture patterns which disrupt the
pelvic ring, unilateral or bilateral,
includes internal fixation, when
performed (includes ilium, sacroiliac
joint and/or sacrum).
We have decided to assign the same
work RVU values for the G codes as for
the corresponding CPT codes: 10.45
work RVUs for G0412; 15.73 work RVUs
for G0413; 14.65 work RVUs for G0414;
and 20.93 work RVUs for G0415. For CY
2009, we will not recognize CPT codes
27215, 27216, 27217, and 27218 as
covered services under the PFS and
have assigned a status indicator of ‘‘I’’
(Not valid for Medicare purposes,
Medicare recognizes another code).
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2. Stereotactic Radiosurgery Codes
The CPT Editorial Panel made a
significant revision to the stereotactic
radiosurgery codes for cranial and
spinal stereotactic radiosurgery (SRS)
codes, for which the AMA RUC
provided recommended work and PE
valuations. For CY 2009, the CPT
Editorial Panel deleted CPT code 61793,
Stereotactic radiosurgery (particle beam,
gamma ray, or linear accelerator), one
or more sessions, and created seven new
codes for cranial and spinal lesions to
replace CPT code 61793. We believe
that the deleted CPT code 61793
accurately describes a complete course
of stereotactic radiosurgery, inclusive of
all lesions and anatomic sites.
Delivery of radiation as a therapeutic
modality consists of many components,
including planning, physics, dosimetry,
simulation, treatment delivery, and
management. Regardless of the clinical
background or training received by the
clinician, we believe the work involved
in providing radiation therapy services
or radiosurgery radiation therapy is
similar, and that the work relative
values should be similar. Currently, CPT
code 77432, Stereotactic radiation
treatment management of cranial
lesion(s) (complete course of treatment
consisting of one session), with 7.92
work RVUs, is used by providers when
managing certain pre- and post-deliveryrelated services of stereotactic radiation.
CPT code 77432 includes treatmentrelated services of all cranial lesions
during one session. We have been
informed that CPT code 77421,
Stereoscopic X-ray guidance for
localization of target volume for the
delivery of radiation therapy, with 0.39
work RVUs, often is used, in association
with CPT code 77432, when
appropriate.
The specialty societies and the AMA
RUC, in general, used open surgical
codes as comparators during the RUC
process. For example, for CPT code
61797, the comparison code was CPT
code 63048, Laminectomy, facetectomy
and foraminotomy (unilateral or
bilateral with decompression of spinal
cord, cauda equina and/or nerve root[s],
[eg, spinal or lateral recess stenosis]),
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single vertebral segment; each
additional segment, cervical, thoracic,
or lumbar (List separately in addition to
code for primary procedure), instead of
a more equivalent stereotactic radiation
treatment code.
Therefore, we disagree with the work
RVUs for the following CPT codes:
61796, Stereotactic radiosurgery
(particle beam, gamma ray, or linear
accelerator); 1 simple cranial lesion;
61797, Stereotactic radiosurgery
(particle beam, gamma ray, or linear
accelerator); each additional cranial
lesion, simple; 61798, Stereotactic
radiosurgery (particle beam, gamma ray,
or linear accelerator); 1 complex cranial
lesion; 61799, Stereotactic radiosurgery
(particle beam, gamma ray, or linear
accelerator); each additional cranial
lesion, complex; 63620, Stereotactic
radiosurgery (particle beam, gamma ray,
or linear accelerator); 1 spinal lesion;
and 63621, Stereotactic radiosurgery
(particle beam, gamma ray, or linear
accelerator); each additional spinal
lesion.
We believe that the more appropriate
comparison for the replacement codes
for CPT code 61793 is with CPT codes
77432 plus 77421. The AMA RUC
recommended that CPT codes 61796,
61798, and 63620 include a half-day
discharge day and two 99213 office
visits. We include those recommended
values within our valuation of these
services.
Therefore, the new work values for
these codes would be as follows: 10.79
work RVUs for CPT codes 61796, 61798,
and 63620. For the add-on CPT codes
61797, 61799, and 63621, the specialty
societies and the AMA RUC used open
surgical codes as comparison codes. As
noted above, we do not believe that
such codes provide the correct
comparison, which led to an
inappropriate valuation of these codes.
Although we disagree with the
methodology and valuation of the addon codes, we will accept the values as
recommended on an interim basis. We
urge the AMA RUC, to the extent that
the type of specialty involved played a
part in the valuation of these codes, to
place an emphasis on the type of work
performed, not the specialty provider.
3. Endothelial Keratoplasty
The CPT Editorial Panel created two
CPT codes (65756, Keratoplasty (corneal
transplant); endothelial and 65757,
Backbench preparation of corneal
endothelial allograft prior to
transplantation (List separately in
addition to code for primary procedure)
to describe the physician service of
endothelial keratoplasty, which is a new
surgical method of repairing certain
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types of diseased corneas that in the
past would have required a full
thickness corneal transplant (also called
penetrating keratoplasty). The AMA
RUC recommended 16.60 work RVUs
for CPT code 65756 and 1.44 work
RVUs for CPT code 65757. We have
accepted the AMA RUC recommended
work RVUs for CPT code 65756;
however, we have decided to have
Medicare contractors price CPT code
65757. We recognize that it is difficult
to assess the intensity and work of the
other backbench transplant codes and
have generally contractor priced them.
We also recognize that this service is
one of short duration and high intensity.
The intra-service work per unit time
(IWPUT) may not be of the greatest
accuracy in evaluating this service.
4. Cardiac Monitoring
The CPT Editorial Panel made
significant revisions to the cardiac
device monitoring (CDM) codes, for
which the AMA RUC provided work
and PE valuations. The CDM codes
describe services that generally fall into
three categories: Interrogation of devices
(retrieval and evaluation of stored
device data); programming of devices
(retrieval and evaluation of stored
device data and programming of the
device); and remote monitoring of
devices (solely technical services for
monitoring, basic analysis and
assemblage of device data).
We agree with the majority of the
AMA RUC-recommended valuations.
However, we question the
recommended values of the increments
between some codes within families and
across families of pacemakers,
implantable cardioverter defibrillators
(ICDs), implantable loop recorders, and
implantable cardiovascular monitoring
systems. CPT codes 93279 through
93281 (0.65 to 0.90 work RVUs, with a
work RVU difference between the codes
of 0.12 to 0.13) describe the
programming of pacemakers according
to the number of leads. CPT codes
93282 through 93284 (0.85 to 1.25 work
RVUs, with a work RVU difference
between the codes of 0.07 to 0.33)
describe the programming of ICDs
according to the number of leads. We
note that the recommended difference
in the work RVUs between CPT code
93279 (single lead programming
pacemaker code) and CPT code 93282
(single lead ICD code) is 0.20 work
RVUs, and that the difference between
CPT code 93281 (multiple lead
programming pacemaker code) and CPT
code 93284 (multiple lead ICD code) is
0.35 work RVUs. The AMA RUC
primarily used a comparison
methodology to determine the value of
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69895
the pacemaker codes and the surveyed
25th percentile to determine the value
of the implantable cardioverter
defibrillator (ICD) codes. Even though
different methodologies were utilized to
develop the recommended values, we
do not understand why the increments
between various levels of the pacemaker
programming codes are not also the
appropriate increment between the
various levels of ICD programming
codes. Therefore, we are not accepting
these recommendations and instead will
establish work RVUs that maintain the
same incremental difference between
levels of programming codes. This
change will help to ensure consistency
and relativity within all cardiac device
monitoring codes. The specific changes
to the codes are discussed below.
In addition, we believe that although
the surveyed 25th percentile of 1.18
work RVUs was chosen for valuation of
CPT code 93283, the increment of 0.33
work RVUs between CPT codes 93282
and 93283 is excessive. Therefore, we
believe that the appropriate value for
CPT code 93283 is 1.05 work RVUs,
slightly below the 25th percentile. We
believe that an appropriate comparison
CPT code for 93283 is CPT code 93890
(Transcranial Doppler study of the
intracranial arteries; vasoreactivity
study) which has a work RVU of 1.00.
CPT code 93286 (0.30 work RVUs)
describes periprocedural programming
of a pacemaker. CPT code 93287 (0.45
work RVUs) describes periprocedural
programming of an ICD. These codes
have recommended work RVU
differences of 0.15 work RVUs and 0.30
work RVUs between the pacemakers
and ICDs for a single service and for
services pre- and postsurgery,
respectively. CPT code 93288 (0.43
work RVUs) describes in person
interrogation of pacemakers. CPT Code
93289 (0.92 work RVUs, which was
developed by means of a crosswalk to a
99213 office visit) describes in person
interrogation of an ICD, a work RVU
difference of 0.49 RVUs between the
pacemakers and ICDs.
As noted above, the work RVU
difference between programming
pacemakers and ICDs varies from 0.20 to
0.35. Therefore, we believe that the
appropriate value for CPT code 93289
should be 0.78 (0.43 (the work value of
CPT code 93288) plus 0.35 (the largest
difference between pacemaker and ICD
programming codes families)).
Appropriate comparisons are CPT codes
99231 (Subsequent hospital care) which
has a work RVU of 0.76, and CPT code
93015 (Cardiovascular stress test using
maximal or submaximal treadmill or
bicycle exercise, continuous
electrocardiographic monitoring, and/or
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pharmacological stress; with physician
supervision, with interpretation and
report) which has a work RVU of 0.75.
Therefore, we believe a work RVU of
0.78 is appropriate for CPT code 93289.
The AMA RUC-recommended work
RVUs of 0.65 for CPT code 93294,
Interrogation device evaluation(s)
(remote), up to 90 days; single, dual, or
multiple lead pacemaker system with
interim physician analysis, review(s)
and report(s), was determined by
multiplying 1.5 (the average number of
transmissions per 90 days) times the
work RVU for CPT code 93288 (0.43).
The AMA RUC-recommended work
RVUs of 1.38 for CPT code 93295,
Interrogation device evaluation(s)
(remote), up to 90 days; single, dual, or
multiple lead pacemaker system with
interim physician analysis, review(s)
and report(s), was determined by
multiplying 1.5 (the average number of
transmissions per 90 days) times the
work RVU for CPT code 93289 (0.92).
Because we are adjusting the work value
for CPT code 93289 to 0.78, using the
RUC-recommended methodology, the
adjusted work value for CPT code 93295
is 1.17.
We note that certain CDM codes were
not reviewed by the RUC. For example,
CPT codes 93230, Wearable
electrocardiographic rhythm derived
monitoring for 24 hours by continuous
original waveform recording and storage
without superimposition scanning
utilizing a device capable of producing
a full miniaturized printout; includes
recording, microprocessor-based
analysis with report, physician review
and interpretation, and 93233, Wearable
electrocardiographic rhythm derived
monitoring for 24 hours by continuous
original waveform recording and storage
without superimposition scanning
utilizing a device capable of producing
a full miniaturized printout; physician
review and interpretation, currently
have work RVUs of 0.52 each. Some of
the newly valued CDM codes that
provide payment for 30 days of work
(for example, CPT codes 93268,
Wearable patient activated
electrocardiographic rhythm derived
event recording with presymptom
memory loop, 24-hour attended
monitoring, per 30 day period of time;
includes transmission, physician review
and interpretation, and 93272, Wearable
patient activated electrocardiographic
rhythm derived event recording with
presymptom memory loop, 24-hour
attended monitoring, per 30 day period
of time; physician review and
interpretation, also have work RVUs of
0.52. We urge the AMA RUC to assess
the work valuation of CPT codes 93230
and 93233 in the future in light of the
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valuation of the other new similar
codes.
The adjusted work RVUs are as
follows: 1.05 work RVUs for CPT code
93283; 0.78 work RVUs for CPT code
93289; and 1.17 work RVUs for CPT
code 93295.
5. Mobile Cardiovascular Telemetry and
Implantable Loop Monitoring
The CPT Editorial Panel created two
new codes 93228 and 93229 for mobile
cardiovascular telemetry and a new
code 93299 related to implantable
cardiovascular monitoring systems or
implantable loop recorder systems. The
AMA RUC recommended 0.52 work
RVUs for CPT code 93228 and only
direct cost inputs for CPT code 93229
and 93299. These services were
previously billed using unlisted codes,
which were contractor priced. CPT code
93228 represents the professional aspect
of the mobile cardiovascular telemetry
service and CPT code 93229 represents
the technical aspect. We have accepted
the AMA RUC recommended work
RVUs for CPT code 93228. However, we
will continue to contractor price CPT
codes 93229 and 93299 in order to
provide additional time to better
understand the direct cost inputs for
this service and to allow us to collect
actual utilization data under the new
code.
6. Canalith Repositioning
The CPT Editorial Panel created and
the AMA RUC valued a new code (CPT
code 95992, Canalith repositioning
procedure(s) (eg, Epley maneuver,
Semont maneuver), per day) for canalith
repositioning, which is described as
‘‘therapeutic maneuvering of the
patients’ body and head designed to use
the force of gravity. By using this type
of maneuvering, the calcium crystal
debris that is in the semi-circular canal
system is redeposited into a neutral part
of the end organ where it will not cause
vertigo.’’ This is a procedure that has
been performed for several years.
Previously this maneuver was billed by
physicians as part of an E&M service
and by nonphysician practitioners,
primarily therapists, under a number of
CPT codes, including 97112,
Therapeutic procedure, one or more
areas, each 15 minutes; neuromuscular
reeducation of movement, balance,
coordination, kinesthetic sense, posture,
and/or proprioception for sitting and/or
standing activities, which has 0.45 work
RVUs. Therapists usually bill 2 units of
service. The RUC recommended work
RVUs for this service is 0.75.
We believe a status indicator of ‘‘B’’
(Bundled Code, payments for covered
services are always bundled into
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payment for other services not
specified) is most appropriate because
this service is currently being paid for
as part of an E&M service. (Note:
Because neurologists and physical
therapists are the predominant
providers of this service to Medicare
patients (each at 22 percent) it has been
assigned as a ‘‘sometimes therapy’’
service under the therapy code abstract
file.)
F. Additional Coding Issues
1. Reduction in the Technical
Component (TC) Payment for Imaging
Services Paid Under the PFS to the
Outpatient Department (OPD) Amount
Effective January 1, 2007, section
5102(b)(1) of the Deficit Reduction Act
of 2005 (Pub. L. 109–171) (DRA) capped
the TC of most imaging services paid
under the PFS to the amount paid under
the Outpatient Prospective Payment
System (OPPS) (71 FR 69659).
The list of codes subject to of OPPS
cap has been revised to reflect new and
deleted CPT codes for 2009. CPT Codes
78890 and 78891 have been deleted and
have been removed from the list. The
following new CPT codes have been
added to the list:
• 93306, Echocardiography,
transthoracic real-time with image
documentation (2D), including M-mode
recording if performed, with spectral
Doppler echocardiography, and with
color flow Doppler echocardiography.
The complete list of codes subject to
the OPPS cap is in Addendum I.
2. Moderate (Conscious) Sedation Codes
(CPT Codes 99143 to 99150)
In 2006, the moderate sedation codes
were adopted by the CPT. We did not
accept the AMA RUC-recommended
work values for these codes, but stated
that they would be contractor priced
under the PFS. At that time, we
indicated that we would continue to
review this issue.
In August 2008, the AMA RUC
convened a workgroup to review the
moderate sedation codes. The
workgroup examined national claims
data provided to them by CMS to
determine if any further action was
necessary for these codes. The
workgroup concluded its work in
September 2008. It recommended that
CMS again consider assigning the
previously AMA RUC-recommended
work values to both the pediatric and
adult moderate sedation codes.
Comment: Although not specifically
discussed in the CY 2009 PFS proposed
rule, we received comments concerning
the pricing of these codes. Commenters
requested that CMS assign the status
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indicator of ‘‘A’’ to these codes under
the PFS Database and include the AMA
RUC-recommended RVUs for these
codes. Another commenter requested
that we implement the AMA RUC
recommendations for the pediatric
conscious sedation codes which are
represented by CPT codes 99143 and
99150.
Response: When these codes were
established by the CPT, the physician
specialties that were surveyed by the
AMA RUC to recommend work RVUs
were the pediatricians, emergency
medicine physicians, spine surgeons,
and oral and maxillofacial surgeons.
Our review of Medicare national claims
data shows that these codes are most
often utilized by anesthesiologists and
interventional pain management
physicians. We continue to have
concerns about the utilization of these
codes and will continue to review them
under the Medicare program.
We will also continue contractor
pricing of these codes under the PFS.
Regarding the AMA RUC-recommended
work values for the moderate sedation
codes, which we have not accepted, we
note that RUC-recommended values for
these codes were included in the CY
2006 PFS final rule with comment
period (70 FR 70282).
3. Inpatient Dialysis Services (CPT
Codes 90935, 90937, 90945, and 90947)
Although not discussed in the CY
2009 PFS proposed rule, we received
comments requesting that CMS apply
the increases in work RVUs for E&M
services recommended by the AMA
RUC for each CPT code with a global
period of 10 and 90 days as part of the
2007 PFS proposed and final rules to
the inpatient dialysis family of services.
Comment: Some commenters believed
that the outpatient and inpatient
dialysis services that use E&M codes as
‘‘building blocks’’ or components of
their valuation should have the full
increases for the E&M codes
incorporated into their values as well.
Response: Increases in E&M codes
were not applied to the inpatient
dialysis services because these codes do
not have a global period of 10 or 90
days. The AMA RUC recommendations
were specifically for codes with global
periods of 10 or 90 days. We suggest
that the specialty society work with the
AMA RUC using the existing process to
address this issue.
4. New Codes for Re-Examination at the
Next 5-Year Review
As part of its annual recommendation,
the AMA RUC includes a list identifying
new CPT codes which will be
reexamined at the next 5-Year Review of
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Work RVUs. New CPT codes that have
been added to this list are identified
with an asterisk (*) on Table 27: AMA
RUC Recommendations and CMS’
Decisions for New and Revised 2009
CPT Codes.
5. Comments Received on New CPT
Codes for CY 2009
We received comments on new CPT
codes for CY 2009 including Category III
codes. Since these are new codes for CY
2009, they are subject to comment as
part of this final rule. Note: Category III
codes are contractor priced under the
PFS.
H. Establishment of Interim PE RVUs for
New and Revised Physician’s Current
Procedural Terminology (CPT) Codes
and New Healthcare Common
Procedure Coding System (HCPCS)
Codes for 2009
We have developed a process for
establishing interim PE RVUs for new
and revised codes that is similar to that
used for work RVUs. Under this process,
the AMA RUC recommends the PE
direct inputs (the staff time, supplies
and equipment) associated with each
new code. CMS reviews the
recommendations in a manner similar to
our evaluation of the recommended
work RVUs. The AMA RUC
recommendations on the PE inputs for
the new and revised CY 2009 codes
were submitted to CMS as interim
recommendations.
We have accepted, in the interim, the
PE recommendations submitted by the
RUC for the codes listed in Table 27:
AMA RUC Recommendations and CMS’
Decisions for New and Revised 2009
CPT Codes and Table 26 except as noted
below in this section.
1. CPT Code Series 93279 Through
93292
The AMA RUC PE recommendations
for cardiac monitoring services in the
CPT code series 93279 through 93292
recommended that we include a
‘‘pacemaker monitoring system’’ as the
necessary equipment to be used in each
code of the 14 CPT code series 93279
through 93292. Because the specialty
did not list a price along with the
equipment item we reviewed the
equipment used in the existing services
that were used to crosswalk to the new
codes. We found that the existing
services are each assigned the
pacemaker follow-up system (including
software and hardware), CMS
equipment code EQ198 and, as such, we
have assigned this equipment item to
each of the 14 new services on an
interim basis.
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69897
The RUC recommended that a
‘‘pacemaker interrogation system’’ be
used for the two CPT codes 93293 and
93296. However, the PE database does
not contain an equipment item with this
description. Because we noted a 100
percent crosswalk from existing CPT
code 93733 that utilizes the pacemaker
follow-up system to the new CPT code
93293, we have assigned, on an interim
basis, the pacemaker follow-up system
to CPT codes 93293 and 93296 (a ‘‘new’’
service without a crosswalk).
We ask commenters to provide
documentation to us as to the type and
cost of equipment that is used in
furnishing these services in the
physician office and other information
to support any suggested changes from
the prior inputs.
2. CPT Code 41530
The AMA RUC recommended PE
direct inputs for CPT code 41530,
Submucosal ablation of the tongue base,
radiofrequency, one or more sites, per
session, include a disposable pulse
oximeter finger probe. We did not
accept the addition of this item to the
PE database for this or any other
procedure because, as we have
discussed in the CY 2004 PFS proposed
and final rules (68 FR 49037 and 63206),
we continue to treat the pulse oximeter
probe as reusable.
3. CPT Code 46930
In the AMA RUC PE
recommendations for CPT code 46930,
Destruction of internal hemorrhoid(s) by
thermal energy (eg, infrared
coagulation, cautery, radiofrequency),
the specialty society requested that we
add a light guide to the existing price of
$3,087.50, for the infrared coagulator
and provided the list price of $730 for
this item. In addition, the specialty
society requested that a sheath (pricing
information provided by the specialty at
$10.50) for the light guide be included
as a typical supply for this procedure.
We have reviewed the components of
the existing infrared coagulator in the
PE database and note its price of
$3087.50 includes an infrared power
unit and a hand applicator. Using our
existing pricing information, we have
added the price of $572 for the
indicated (6mm x 220mm) light guide
(the price resulting from averaging the
costs of the Teflon and Sapphire tips) to
the infrared coagulator for a total price
of $3,659. We did not accept the AMA
RUC-recommended sheath to cover the
light guide that the specialty proposed
to add to the PE database for this service
and 4 other procedures as we do not
believe it to be typically used in
furnishing these services. Because the
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light guide was not a component of the
infrared coagulator item at the time we
re-priced our entire equipment file for
CY 2005, and because this same
equipment item is used for 4 other
endoscopy procedures—including CPT
codes 46606, 46608, 46610, and 46612—
we ask commenters to provide us with
information and documentation as to
whether the light guide is typical to any
of these 5 procedures. Additionally, we
also invite comments about the typical
use of the sheath in relationship to the
light guide. In the interim, while we
await comments, we have assigned the
new equipment price including the light
guide to the new CPT code 46930 as
well as the four other procedures that
employ this infrared coagulator for CY
2009.
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4. CPT Code 64632
For CPT code 64632, Destruction by
neurolytic agent; plantar common
digital nerve, the AMA RUC
recommended that supply code SH062,
a sclerosing solution for injection, be
used as a proxy for the neurolytic agent
needed to perform this procedure. We
are concerned about the appropriateness
of this substitution suggested by the
specialty society. The society stated that
it was not able to find pricing for either
phenol or 4 percent ethyl alcohol,
which the society believes are the
commonly used analytics for this
procedure. We ask commenters to
provide us documentation for pricing of
the phenol or 4 percent ethyl alcohol
that are appropriately used in furnishing
this service. In the interim, we will
accept the recommendation to use the
$2.029 sclerosing solution as the proxy
for the analytic agent.
5. CPT Code Series 90951 Through
90966
For the End-Stage Renal Disease
(ESRD) Services including new CPT
codes 90951, 90952, 90953, 90954,
90955, 90956, 90957, 90958, 90959,
90960, 90961, 90962, 90963, 90964,
90965 and 90966, the AMA RUC
recommended PE direct inputs (36
minutes of clinical labor for the preservice period and an additional 6
minutes in the post period for CPT
codes 90960, 90961, 90962 and 90966)
for the monthly capitation payments.
For CPT codes 90967, 90968, 90969, and
90970, the ESRD codes representing perday payments, the AMA RUC PE
recommendations included 1.2 minutes
of clinical labor per day. Prior to
accepting these PE recommendations,
we have asked the AMA RUC to review
the PE inputs at an upcoming meeting
to make certain that they accurately
reflect the typical direct resources
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required for these services. In the
interim, we will continue to use the
established PE RVUs for these services.
In addition, for CPT codes 90960 and
90961, we will ask the RUC to review
the physician times for these services.
6. CPT Code 93306
The AMA RUC recommended PE
direct inputs for CPT code 93306,
Echocardiography, transthoracic realtime with image documentation (2D),
including M-mode recording if
performed, with spectral Doppler
echocardiography, and with color flow
Doppler echocardiography. However,
the AMA RUC did not recommend any
changes to the PE direct inputs for the
related echocardiography codes 93307,
93320 and 93325. Prior to accepting this
recommendation, we have asked the
AMA RUC to review the PE inputs
93307, 93320 and 93325 to ensure that
they are consistent with the
recommended direct inputs for 93306.
In the interim, we will continue to use
the established PE RVUs for these
services.
7. CPT Code 93351
The AMA RUC recommended PE
inputs for CPT code 93351,
Echocardiography, transthoracic realtime with image documentation (2D),
including M-mode recording, when
performed, during rest and
cardiovascular stress test using
treadmill, bicycle exercise and/or
pharmacologically induced stress, with
interpretation and report; including
performance of continuous
electrocardiographic monitoring with
physician supervision, includes three
new equipment items with pricing
information proposed by the specialty
society. These new equipment items
include an ultrasound machine, an
echocardiography exam table, and a
dual image viewing and reporting
system. We did not accept the
recommended ultrasound machine
valued at $325,000 which appears to be
a newer model than that currently used
in a similar procedure and priced at
$248,000 in the PE database. We also
did not accept the echocardiography
exam table ($11,095) because we do not
believe it to be the typical equipment
item found in the physician’s office. In
place of these two new items, we
assigned those PE inputs from the PE
database that are typical to similar
services—the $248,000 ultrasound
machine and a $1,915 stretcher. We ask
commenters to provide us with
documentation as to the type and cost
of equipment that is used in furnishing
the procedure in the physician office
setting along with a rationale for
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suggested changes from the existing
inputs.
We have included the ‘‘dual’’
echocardiography image viewing and
reporting system, although we accepted
the base unit price of $85,000 in place
of the $173,000 price provided by the
specialty. This basic system is sufficient
to manage, import, export, archive, and
review and report digital exams; and, it
contains an additional work station that
is designed to function concurrently
with a second ultrasound machine.
Because this unit is designed for the
concurrent use of two ultrasound units
(a connection for managing the images
from a third unit can be added for an
additional fee), we ask commenters to
provide us with the typical scenario as
to whether one, two, or three ultrasound
units will be connected to this image
management system. We also ask
commenters for information as to the
amount of time that this dual image
management system is in use for this
procedure. In the interim, we have
assigned the 7 minutes from the AMA
RUC PE recommendation that is
indicated for the cardiac sonographer to
enter the ECG and echo report elements
into reporting system.
8. CPT Code 95803
CPT code 95803, Actigraphy, testing,
recording, analysis, interpretation and
report (minimum of 72 hours to 14
consecutive days of recording), requires
the patient to wear a home monitor for
24 hours a day for 3 to 14 days. The
RUC PE recommendations did not
include the typical number of days the
home monitor would be in use. They
also did not include the necessary
equipment used to analyze the data.
Therefore, we seek comment on the
typical number of days for this service.
We will continue to contractor price this
service for 2009.
VI. Physician Self-Referral Prohibition:
Annual Update to the List of CPT/
HCPCS Codes
A. General
Section 1877 of the Act prohibits a
physician from referring a Medicare
beneficiary for certain designated health
services (DHS) to a health care entity
with which the physician (or a member
of the physician’s immediate family) has
a financial relationship, unless an
exception applies. Section 1877 of the
Act also prohibits the DHS entity from
submitting claims to Medicare or billing
the beneficiary or any other entity for
Medicare DHS that are furnished as a
result of a prohibited referral.
Section 1877(h)(6) of the Act specifies
that the following services are DHS:
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• Clinical laboratory services.
• Physical therapy services.
• Occupational therapy services.
• Radiology services.
• Radiation therapy services and
supplies.
• Durable medical equipment and
supplies.
• Parenteral and enteral nutrients,
equipment, and supplies.
• Prosthetics, orthotics, and
prosthetic devices and supplies.
• Home health services.
• Outpatient prescription drugs.
• Inpatient and outpatient hospital
services.
Act that are for the diagnosis and
treatment of speech, language, and
cognitive disorders that include
swallowing and other oral-motor
dysfunctions’’.
Consistent with the provisions of
section 143 of the MIPPA, these changes
will be effective July 1, 2009.
C. Annual Update to the Code List
1. Background
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B. Speech-Language Pathology Services
As we stated in section III.I. of this
final rule with comment period, section
143 of the MIPPA amended section
1877(h)(6) of the Act to specify that
‘‘outpatient speech-language pathology
services’’ are DHS, effective July 1,
2009. We note that, in the ‘‘Phase I’’
physician self-referral final rule, we
defined the DHS category of ‘‘physical
therapy services’’ to include speechlanguage pathology services because the
statutory definition of ‘‘outpatient
physical therapy services’’ (section
1861(p) of the Act) included speechlanguage pathology services (66 FR at
925). To conform the language of the
regulations to MIPPA, we are revising
two of the definitions at § 411.351. First,
we are revising the definition of
‘‘Designated health services (DHS)’’ by
adding the word ‘‘outpatient’’ before the
phrase ‘‘speech-language pathology
services’’ in paragraph (2). Second, we
are revising the definition of ‘‘Physical
therapy, occupational therapy, and
speech-language pathology services’’ by:
• Removing the phrase ‘‘speechlanguage pathology’’ in the heading of
the definition and wherever it occurs
within the introductory paragraph and
adding, in its place, the phrase
‘‘outpatient speech-language
pathology’’;
• Deleting the parenthetical
‘‘(including speech-language pathology
services)’’ from paragraph (1) of the
description of physical therapy services;
• Deleting sub-paragraph (1)(iv),
which describes physical therapy
services as including ‘‘Speech-language
pathology services that are for the
diagnosis and treatment of speech,
language, and cognitive disorders that
include swallowing and other oralmotor dysfunctions;’’ and
• Adding the following new
paragraph to describe outpatient speechlanguage pathology services: ‘‘(3)
Outpatient speech-language pathology
services, meaning those services as
described in section 1861(ll)(2) of the
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In § 411.351, we specify that the
entire scope of four DHS categories is
defined in a list of CPT/HCPCS codes
(the Code List), which is updated
annually to account for changes in the
most recent CPT and HCPCS
publications. The DHS categories
defined and updated in this manner are:
• Clinical laboratory services.
• Physical therapy, occupational
therapy, and outpatient speech-language
pathology services.
• Radiology and certain other imaging
services.
• Radiation therapy services and
supplies.
The Code List also identifies those
items and services that may qualify for
either of the following two exceptions to
the physician self-referral prohibition:
• EPO and other dialysis-related
drugs furnished in or by an ESRD
facility (§ 411.355(g)).
• Preventive screening tests,
immunizations, or vaccines
(§ 411.355(h)).
The Code List was last updated in the
CY 2008 PFS final rule with comment
period (72 FR 66222) and in a
subsequent correction notice (73 FR
2568).
2. Response to Comments
We received no public comments
relating to the Code List that became
effective January 1, 2008.
3. Revisions Effective for 2009
The updated, comprehensive Code
List effective January 1, 2009 appears as
Addendum J in this final rule with
comment period and is available on our
Web site at https://www.cms.hhs.gov/
PhysicianSelfReferral/
11_List_of_Codes.asp#TopOfPage.
Additions, deletions, and revisions to
the Code List conform the Code List to
the most recent publications of CPT and
HCPCS.
Tables 29, 30, and 31 identify the
additions, deletions, and revisions,
respectively, to the comprehensive Code
List that was published in Addendum I
of the CY 2008 PFS final rule (72 FR
66574 through 66578) and revised in a
subsequent correction notice (73 FR
2568).
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69899
Tables 29 and 30 also identify the
additions and deletions to the lists of
codes used to identify the items and
services that may qualify for the
exceptions in § 411.355(g) (regarding
EPO and other dialysis-related
outpatient prescription drugs furnished
in or by an ESRD facility) and in
§ 411.355(h) (regarding preventive
screening tests, immunizations, and
vaccines).
In Table 29, we specify additions that
generally reflect new CPT and HCPCS
codes that become effective January 1,
2009, or that became effective since our
last update. Also, we are adding CPT
code 0183T (Low frequency, noncontact, non-thermal ultrasound) to the
category of Physical Therapy,
Occupational Therapy, and Outpatient
Speech-Language Pathology Services.
The AMA added this code to the CPT
for 2008, but we inadvertently failed to
add this code to our Code List.
Table 30 reflects the deletions
necessary to conform the Code List to
the most recent publications of CPT and
HCPCS. It also reflects our decision to
delete CPT codes 78000, 78001, and
78003 from the Radiology and Certain
Other Imaging Services category of the
Code List because we realized that these
codes do not involve imaging and,
therefore, should not be included in that
category.
Also in the category of Radiology and
Certain Other Imaging Services and as
shown in Table 31, we are making
revisions to our qualifying language
included in brackets for CPT codes
93320, 93321 and 93325. Our revisions
reflect changes made by the AMA for
the CPT 2009 that specify with which
codes CPT codes 93320, 93321, and
93325 may be used. Additionally, we
found that we had previously failed to
include certain CPT codes with which
CPT code 93325 may be used. Thus, we
are revising our qualifying language in
brackets for CPT 93325 to clarify that it
is considered a DHS when used in
conjunction with CPT codes 76825,
76826, 76827, 76828, 99903, 93304, and
93308.
We will consider comments regarding
the codes listed in Tables 29, 30, and 31.
Comments will be considered if we
receive them by the date specified in the
‘‘DATES’’ section of this final rule with
comment period. We will not consider
any comment that advocates a
substantive change to any of the DHS
defined in § 411.351.
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TABLE 29—ADDITIONS TO THE PHYSICIAN SELF-REFERRAL LIST OF CPT 1
HCPCS CODES
78890
78891
CLINICAL LABORATORY SERVICES
0194T
Procalcitonin (PCT).
PHYSICAL THERAPY, OCCUPATIONAL
THERAPY, AND OUTPATIENT SPEECHLANGUAGE PATHOLOGY SERVICES
0183T Wound ultrasound.
95992 Canalith repositioning proc.
RADIOLOGY AND CERTAIN OTHER
IMAGING SERVICES
RADIATION THERAPY SERVICES AND
SUPPLIES
Place intraoc radiation src.
Intrafraction track motion.
SRS, cranial lesion simple.
SRS, cran les simple, addl.
SRS, cranial lesion complex.
SRS, cran les complex, addl.
Apply SRS headframe add-on.
SRS, spinal lesion.
SRS, spinal lesion, addl.
HDR brachytx, 1 channel.
HDR brachytx, 2–12 channel.
HDR brachytx over 12 chan.
RADIATION THERAPY SERVICES AND
SUPPLIES
61793
77781
77782
77783
77784
J1751
J1752
PREVENTIVE SCREENING TESTS,
IMMUNIZATIONS AND VACCINES
TABLE 31—REVISIONS TO THE PHYSICIAN SELF-REFERRAL LIST OF CPT 1
HCPCS CODES
Inj iron dextran.
CLINICAL LABORATORY SERVICES
[No revisions].
PHYSICAL THERAPY, OCCUPATIONAL
THERAPY, AND OUTPATIENT SPEECHLANGUAGE PATHOLOGY SERVICES
[No revisions].
[No additions].
1 CPT codes and descriptions only are copyright 2008 AMA. All rights are reserved and
applicable FARS/DFARS clauses apply.
TABLE 30—DELETIONS TO THE PHYSICIAN
SELF-REFERRAL LIST OF
CPT 1/HCPCS CODES
CLINICAL LABORATORY SERVICES
Measure remnant lipoproteins.
Detect ur infect agnt w/cpas.
Co expired gas analysis.
Cryopreservation, ovary tiss.
Cryopreservation, oocyte.
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Magnetic tx for incontinence.
RADIOLOGY AND CERTAIN OTHER
IMAGING SERVICES
0028T Dexa body composition study.
78000 Thyroid, single uptake.
78001 Thyroid, multiple uptakes.
78003 Thyroid, suppress/stimul.
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RADIOLOGY AND CERTAIN OTHER
IMAGING SERVICES
93320 Doppler echo exam, heart [if used in
conjunction with 93303–93304].
93321 Doppler echo exam, heart [if used in
conjunction with 93303, 93304, 93308].
93325 Doppler color flow add-on [if used in
conjunction with 76825, 76826, 76827,
76828, 93303, 93304, 93308].
RADIATION THERAPY SERVICES AND
SUPPLIES
[No revisions].
PHYSICAL THERAPY, OCCUPATIONAL
THERAPY, AND OUTPATIENT SPEECHLANGUAGE PATHOLOGY SERVICES
0029T
Iron dextran 165 injection.
Iron dextran 267 injection.
1 CPT codes and descriptions only are copyright 2008 AMA. All rights are reserved and
applicable FARS/DFARS clauses apply.
PREVENTIVE SCREENING TESTS,
IMMUNIZATIONS AND VACCINES
0026T
0041T
0043T
0058T
0059T
Focus radiation beam.
High intensity brachytherapy.
High intensity brachytherapy.
High intensity brachytherapy.
High intensity brachytherapy.
[No deletions].
DRUGS USED BY PATIENTS UNDERGOING
DIALYSIS
J1750
Nuclear medicine data proc.
Nuclear med data proc.
DRUGS USED BY PATIENTS UNDERGOING
DIALYSIS
93306 TTE w/Doppler, complete.
A9580 Sodium fluoride F–18.
0190T
0197T
61796
61797
61798
61799
61800
63620
63621
77785
77786
77787
TABLE 30—DELETIONS TO THE PHYSI- VII. Physician Fee Schedule Update for
CIAN
SELF-REFERRAL LIST OF CY 2009
CPT 1/HCPCS CODES—Continued A. Physician Fee Schedule Update
DRUGS USED BY PATIENTS UNDERGOING
DIALYSIS
[No revisions].
PREVENTIVE SCREENING TESTS, IMMUNIZATIONS AND VACCINES
[No revisions].
1 CPT codes and descriptions only are copyright 2008 AMA. All rights are reserved and
applicable FARS/DFARS clauses apply.
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The PFS update is set under a formula
specified in section 1848(d)(4) of the
Act. Section 101 of the MIEA-TRHCA
provided a 1-year increase in the CY
2007 conversion factor (CF) and
specified that the CF for CY 2008 must
be computed as if the 1-year increase
had never applied. Section 101 of the
MMSEA provided a 6-month increase in
the CY 2008 CF, from January 1, 2008,
through June 30, 2008, and specified
that the CF for the remaining portion of
2008 and the CFs for CY 2009 and
subsequent years must be computed as
if the 6-month increase had never
applied. Section 131 of the MIPPA
extended the increase in the CY 2008 CF
that was applicable for the first half of
the year to the entire year, provided for
a 1.1 percent increase to the CY 2009
CF, and specified that the CFs for CY
2010 and subsequent years must be
computed as if the increases for CYs
2007, 2008, and 2009 had never applied.
If section 101 of the MMSEA had not
been enacted, the CY 2008 CF update
would have been –10.1 percent
(0.89896), as published in the CY 2008
PFS final rule with comment period (72
FR 66383). For CY 2009, the Medicare
Economic Index (MEI) is equal to 1.6
percent (1.016). The update adjustment
factor (UAF) is –7.0 percent (0.930). Our
calculations of these figures are
explained below in this section. If
section 131 of the MIPPA had not been
enacted, the CY 2009 CF update would
have been the –15.1 percent (0.84941),
which is the product of the published
CY 2008 update (0.89896), the MEI
(1.016), and the UAF (0.930). Consistent
with section 131 of the MIPPA,
however, the update for CY 2009 is 1.1
percent.
B. The Percentage Change in the
Medicare Economic Index (MEI)
The Medicare Economic Index (MEI)
is authorized by section 1842(b)(3) of
the Act, which states that prevailing
charge levels beginning after June 30,
1973, may not exceed the level from the
previous year except to the extent that
the Secretary finds, on the basis of
appropriate economic index data, that
the higher level is justified by year-toyear economic changes.
The MEI measures the weightedaverage annual price change for various
inputs needed to produce physicians’
services. The MEI is a fixed-weight
input price index, with an adjustment
for the change in economy-wide
multifactor productivity. This index,
which has CY 2000 base year weights,
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is comprised of two broad categories: (1)
Physician’s own time; and (2)
physician’s PE.
The physician’s own time component
represents the net income portion of
business receipts and primarily reflects
the input of the physician’s own time
into the production of physicians’
services in physicians’ offices. This
category consists of two
subcomponents: (1) Wages and salaries;
and (2) fringe benefits.
The physician’s PE category
represents nonphysician inputs used in
the production of services in physicians’
offices. This category consists of wages
and salaries and fringe benefits for
nonphysician staff and other nonlabor
inputs. The physician’s PE component
also includes the following categories of
nonlabor inputs: Office expense;
medical materials and supplies;
professional liability insurance; medical
equipment; prescription drugs; and
other expenses. The components are
adjusted to reflect productivity growth
in physicians’ offices by the 10-year
moving average of productivity in the
private nonfarm business sector.
Table 32 presents a listing of the MEI
cost categories with associated weights
69901
and percent changes for price proxies
for the 2009 update. For CY 2009, the
increase in the MEI is 1.6 percent,
which includes a 1.4 percent
productivity offset based on the 10-year
moving average of multifactor
productivity. This is the result of a 3.6
percent increase in physician’s own
time and a 2.4 percent increase in
physician’s PE. Within the physician’s
PE, the largest increase occurred in
prescription drugs, which increased 6.0
percent, and employee benefits, which
increased 4.3 percent.
TABLE 32—INCREASE IN THE MEDICARE ECONOMIC INDEX UPDATE FOR CY 2009 1
CY 2000
weights 2
Cost categories and price measures
Medicare Economic Index Total, productivity adjusted 3 .................................................................................................
Productivity: 10-year moving average of multifactor productivity, private nonfarm business sector 3 ....................
Medicare Economic Index Total, without productivity adjustment ..................................................................................
1. Physician’s Own Time 4 ........................................................................................................................................
a. Wages and Salaries: Average Hourly Earnings, private Nonfarm ...............................................................
b. Fringe Benefits: Employment Cost Index, benefits, private Nonfarm 4 ........................................................
2. Physician’s Practice Expense 4 ............................................................................................................................
a. Nonphysician Employee Compensation .......................................................................................................
(1) Wages and Salaries: Employment Cost Index, wages and salaries, weighted by occupation ...........
(2) Fringe Benefits: Employment Cost Index, fringe benefits, weighted by occupation ...........................
b. Office Expense: Consumer Price Index for Urban Areas (CPI–U), housing ................................................
c. Drugs and Medical Materials and Supplies ..................................................................................................
(1) Medical Materials and Supplies: Producer Price Index (PPI), surgical appliances and supplies/CPI–
U, medical equipment and supplies (equally weighted) ........................................................................
(2) Pharmaceuticals: Producer Price Index (PPI ethical prescription drugs) ............................................
d. Professional Liability Insurance: Professional liability insurance Premiums 5 ..............................................
e. Medical Equipment: PPI, medical instruments and equipment ....................................................................
f. Other Expenses .............................................................................................................................................
CY 2009
percent
changes
N/A
N/A
100.000
52.466
42.730
9.735
47.534
18.653
13.808
4.845
12.209
4.319
1.6
1.4
3.0
3.6
3.8
2.7
2.4
3.6
3.4
4.3
3.1
4.1
2.011
2.308
3.865
2.055
6.433
1.4
6.0
¥2.7
0.5
2.3
1 The rates of historical change are estimated for the 12-month period ending June 30, 2008, which is the period used for computing the CY
2009 update. The price proxy values are based upon the latest available Bureau of Labor Statistics data as of September 5, 2008.
2 The weights shown for the MEI components are the 2000 base-year weights, which may not sum to subtotals or totals because of rounding.
The MEI is a fixed-weight, Laspeyres-type input price index whose category weights indicate the distribution of expenditures among the inputs to
physicians’ services for CY 2000. To determine the MEI level for a given year, the price proxy level for each component is multiplied by its 2000
weight. The sum of these products (weights multiplied by the price index levels) over all cost categories yields the composite MEI level for a
given year. The annual percent change in the MEI levels is an estimate of price change over time for a fixed market basket of inputs to physicians’ services.
3 These numbers may not sum due to rounding and the multiplicative nature of their relationship.
4 The measures of productivity, average hourly earnings, Employment Cost Indexes, as well as the various Producer and CPIs can be found
on the BLS Web site at https://stats.bls.gov.
5 Derived from data collected from several major insurers (the latest available historical percent change data are for the period ending second
quarter of 2008).
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C. The Update Adjustment Factor (UAF)
Section 1848(d) of the Act provides
that the PFS update is equal to the
product of the percentage change in the
MEI and the update adjustment factor
(UAF). The UAF is applied to make
actual and target expenditures (referred
to in the statute as ‘‘allowed
expenditures’’) equal. Allowed
expenditures are equal to actual
expenditures in a base period updated
each year by the sustainable growth rate
(SGR). The SGR sets the annual rate of
growth in allowed expenditures and is
determined by a formula specified in
section 1848(f) of the Act.
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The PFS update is set under a formula
specified in section 1848(d)(4) of the
Act. Section 101 of the MIEA–TRHCA
provided a 1-year increase in the CY
2007 CF and specified that the CF for
CY 2008 must be computed as if the 1year increase had never applied. Section
101 of the MMSEA provided a 6-month
increase in the CY 2008 CF, from
January 1, 2008, through June 30, 2008,
and specified that the CF for the
remaining portion of 2008 and the CFs
for CY 2009 and subsequent years must
be computed as if the 6-month increase
had never applied. Section 131 of the
MIPPA extended the increase in the CY
2008 CF that was applicable for the first
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half of the year to the entire year,
provided for a 1.1 percent increase to
the CY 2009 CF, and specified that the
CFs for CY 2010 and subsequent years
must be computed as if the increases for
CYs 2007, 2008, and 2009 had never
applied.
1. Calculation Under Current Law
Under section 1848(d)(4)(B) of the
Act, the UAF for a year beginning with
CY 2001 is equal to the sum of the
following—
• Prior Year Adjustment Component.
An amount determined by—
+ Computing the difference (which
may be positive or negative) between
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
the amount of the allowed expenditures
for physicians’ services for the prior
year (the year prior to the year for which
the update is being determined) and the
amount of the actual expenditures for
those services for that year;
+ Dividing that difference by the
amount of the actual expenditures for
those services for that year; and
+ Multiplying that quotient by 0.75.
• Cumulative Adjustment
Component. An amount determined
by—
+ Computing the difference (which
may be positive or negative) between
the amount of the allowed expenditures
for physicians’ services from April 1,
1996, through the end of the prior year
and the amount of the actual
expenditures for those services during
that period;
+ Dividing that difference by actual
expenditures for those services for the
prior year as increased by the SGR for
the year for which the UAF is to be
determined; and
+ Multiplying that quotient by 0.33.
Section 1848(d)(4)(E) of the Act
requires the Secretary to recalculate
allowed expenditures consistent with
section 1848(f)(3) of the Act. Section
1848(f)(3) specifies that the SGR (and, in
turn, allowed expenditures) for the
upcoming CY (CY 2009 in this case), the
current CY (that is, CY 2008) and the
preceding CY (that is, CY 2007) are to
be determined on the basis of the best
data available as of September 1 of the
current year. Allowed expenditures for
a year are initially estimated and
subsequently revised twice. The second
revision occurs after the CY has ended
(that is, we are making the final revision
to 2007 allowed expenditures in this
final rule with comment). Once the SGR
and allowed expenditures for a year
have been revised twice, they are final.
Table 33 shows annual and
cumulative allowed and actual
expenditures for physicians’ services
from April 1, 1996, through the end of
the current CY, including the short
periods in 1999 when we transitioned to
a CY system. Also shown is the SGR
corresponding with each period. The
calculation of the SGR is discussed in
detail below in this section.
TABLE 33—ANNUAL AND CUMULATIVE ALLOWED AND ACTUAL EXPENDITURES FOR PHYSICIANS’ SERVICES FROM APRIL 1,
1996 THROUGH THE END OF THE CURRENT CALENDAR YEAR
Annual
allowed
expenditures
($ in billions)
Period
Annual actual
expenditures
($ in billions)
1 $48.9
4/1/96–3/31/97 .............................................................
4/1/97–3/31/98 .............................................................
4/1/98–3/31/99 .............................................................
1/1/99–3/31/99 .............................................................
4/1/99–12/31/99 ...........................................................
1/1/99–12/31/99 ...........................................................
1/1/00–12/31/00 ...........................................................
1/1/01–12/31/01 ...........................................................
1/1/02–12/31/02 ...........................................................
1/1/03–12/31/03 ...........................................................
1/1/04–12/31/04 ...........................................................
1/1/05–12/31/05 ...........................................................
1/1/06–12/31/06 ...........................................................
1/1/07–12/31/07 ...........................................................
1/1/08–12/31/08 ...........................................................
1/1/09–12/31/09 ...........................................................
Cumulative
allowed
expenditures
($ in billions)
$48.9
49.5
50.8
13.2
39.7
52.9
58.4
66.7
71.5
78.8
87.7
92.4
94.1
93.9
94.4
NA
50.5
52.6
13.3
42.1
55.3
59.3
62.0
67.2
72.1
76.8
80.1
81.3
84.1
86.8
93.2
Cumulative
actual
expenditures
($ in billions)
$48.9
99.4
152.0
(2)
(3)
194.0
253.4
315.4
382.6
454.6
531.5
611.5
692.8
776.9
863.7
956.9
$48.9
98.4
149.2
149.2
188.9
188.9
247.3
314.1
385.6
464.4
552.1
644.5
738.6
832.4
926.8
NA
FY/CY SGR
N/A.
FY 1998 = 3.2%.
FY 1999 = 4.2%.
FY 1999 = 4.2%.
FY 2000 = 6.9%.
FY 1999/2000.
CY 2000 = 7.3%.
CY 2001 = 4.5%.
CY 2002 = 8.3%.
CY 2003 = 7.3%.
CY 2004 = 6.6%.
CY 2005 = 4.2%.
CY 2006 = 1.5%.
CY 2007 = 3.5%.
CY 2008 = 3.2%.
CY 2009 = 7.4%.
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1 Allowed expenditures in the first year (April 1, 1996–March 31, 1997) are equal to actual expenditures. All subsequent figures are equal to
quarterly allowed expenditure figures increased by the applicable SGR. Cumulative allowed expenditures are equal to the sum of annual allowed
expenditures. We provide more detailed quarterly allowed and actual expenditure data on our Web site at the following address: https://
www.cms.hhs.gov/SustainableGRatesConFact/. We expect to update the Web site with the most current information later this month.
2 Allowed expenditures for the first quarter of 1999 are based on the FY 1999 SGR.
3 Allowed expenditures for the last three quarters of 1999 are based on the FY 2000 SGR.
Consistent with section 1848(d)(4)(E)
of the Act, Table 33 includes our final
revision of allowed expenditures for CY
2007, a recalculation of allowed
expenditures for CY 2008, and our
initial estimate of allowed expenditures
for CY 2009. To determine the UAF for
CY 2009, the statute requires that we
use allowed and actual expenditures
from April 1, 1996 through December
31, 2008 and the CY 2009 SGR.
Consistent with section 1848(d)(4)(E) of
the Act, we will be making revisions to
the CY 2008 and CY 2009 SGRs and CY
2008 and CY 2009 allowed
expenditures. Because we have
incomplete actual expenditure data for
CY 2008, we are using an estimate for
this period. Any difference between
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current estimates and final figures will
be taken into account in determining the
UAF for future years.
We note that Table 33 contains
updated actual expenditures for each
time period from April 1, 1997 through
December 31, 2008. We discovered that
fifteen procedure codes were
inadvertently omitted from the
measurement of actual expenditures
beginning in 1998. An additional 6
codes were omitted from the
measurement of actual expenditures in
2005 and 2006 only, but have been
included in actual expenditures since
2007. Therefore, the measurement of
actual expenditures for FY 1998 and
each subsequent time period was lower
than it should have been. We will be
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making no changes to PFS payments
made for services furnished prior to CY
2009. However, under section 1848(d) of
the Act, we must include these codes in
the measurement of actual expenditures
for historical, current, and future
periods. The inclusion of these
additional actual expenditures will have
no effect on the 2009 update. Also, we
estimate that the inclusion of the
additional expenditures for these codes
will not increase the number of years
that we expect the maximum reduction
in the physician fee schedule update to
apply under current law. This
correction is consistent with the actions
taken in 2001 when we discovered that
another set of codes inadvertently had
not been included in the measurement
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
of actual expenditures (66 FR 55314). As
discussed in detail below, consistent
with section 1848(f)(3) of the Act, in this
final rule with comment, we are making
our preliminary estimate of the CY 2009
UAF09 =
SGR, a revision to the CY 2008 SGR, and
our final revision to the CY 2007 SGR.
All of the inadvertently excluded codes
were taken into consideration for
69903
purposes of estimating the SGRs for
these 3 years.
We are using figures from Table 33 in
the following statutory formula:
Target4/96-12/08 − Actual4/96-12/08
Target08 − Actual08
× 0.75 +
× 0.33
Actual08 × SGR 09
Actual08
UAF09 = Update Adjustment Factor for CY
2009 = ¥26.6 percent
Target08 = Allowed Expenditures for CY 2008
= $86.8 billion
Actual08 = Estimated Actual Expenditures for
CY 2008 = $94.4 billion
Target 4/96–12/08 = Allowed Expenditures from
4/1/1996–12/31/2008 = $863.7 billion
Actual 4/96–12/08 = Estimated Actual
Expenditures from 4/1/1996–12/31/2008
= $926.8 billion
SGR09 = 7.4 percent (1.074)
VIII. Allowed Expenditures for
Physicians’ Services and the
Sustainable Growth Rate (SGR)
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A. Medicare Sustainable Growth Rate
The SGR is an annual growth rate that
applies to physicians’ services paid by
Medicare. The use of the SGR is
intended to control growth in aggregate
Medicare expenditures for physicians’
services. Payments for services are not
withheld if the percentage increase in
actual expenditures exceeds the SGR.
Rather, the PFS update, as specified in
section 1848(d)(4) of the Act, is adjusted
based on a comparison of allowed
expenditures (determined using the
SGR) and actual expenditures. If actual
expenditures exceed allowed
expenditures, the update is reduced. If
actual expenditures are less than
allowed expenditures, the update is
increased.
Section 1848(f)(2) of the Act specifies
that the SGR for a year (beginning with
CY 2001) is equal to the product of the
following four factors:
(1) The estimated change in fees for
physicians’ services;
(2) The estimated change in the
average number of Medicare fee-forservice beneficiaries;
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(3) The estimated projected growth in
real GDP per capita; and
(4) The estimated change in
expenditures due to changes in statute
or regulations.
In general, section 1848(f)(3) of the
Act requires us to publish SGRs for 3
different time periods, no later than
November 1 of each year, using the best
data available as of September 1 of each
year. Under section 1848(f)(3)(C)(i) of
the Act, the SGR is estimated and
subsequently revised twice (beginning
with the FY and CY 2000 SGRs) based
on later data. (The Act also provides for
adjustments to be made to the SGRs for
FY 1998 and FY 1999. See the February
28, 2003 Federal Register (68 FR 9567)
for a discussion of these SGRs). Under
section 1848(f)(3)(C)(ii) of the Act, there
are no further revisions to the SGR once
it has been estimated and subsequently
revised in each of the 2 years following
the preliminary estimate. In this final
rule with comment, we are making our
preliminary estimate of the CY 2009
SGR, a revision to the CY 2008 SGR, and
our final revision to the CY 2007 SGR.
B. Physicians’ Services
Section 1848(f)(4)(A) of the Act
defines the scope of physicians’ services
covered by the SGR. The statute
indicates that ‘‘the term physicians’
services includes other items and
services (such as clinical diagnostic
laboratory tests and radiology services),
specified by the Secretary, that are
commonly performed or furnished by a
physician or in a physician’s office, but
does not include services furnished to a
Medicare+Choice plan enrollee.’’ We
published a definition of physicians’
services for use in the SGR in the
November 1, 2001 Federal Register (66
FR 55316). We defined physicians’
services to include many of the medical
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and other health services listed in
section 1861(s) of the Act. For purposes
of determining allowed expenditures,
actual expenditures, and SGRs, we have
specified that physicians’ services
include the following medical and other
health services if bills for the items and
services are processed and paid by
Medicare carriers (and those paid
through intermediaries where specified)
or the equivalent services processed by
the Medicare Administrative
Contractors:
• Physicians’ services.
• Services and supplies furnished
incident to physicians’ services.
• Outpatient physical therapy
services and outpatient occupational
therapy services.
• Antigens prepared by, or under the
direct supervision of, a physician.
• Services of PAs, certified registered
nurse anesthetists, certified nurse
midwives, clinical psychologists,
clinical social workers, NPs, and
certified nurse specialists.
• Screening tests for prostate cancer,
colorectal cancer, and glaucoma.
• Screening mammography,
screening pap smears, and screening
pelvic exams.
• Diabetes outpatient selfmanagement training (DSMT) services.
• MNT services.
• Diagnostic x-ray tests, diagnostic
laboratory tests, and other diagnostic
tests (including outpatient diagnostic
laboratory tests paid through
intermediaries).
• X-ray, radium, and radioactive
isotope therapy.
• Surgical dressings, splints, casts,
and other devices used for the reduction
of fractures and dislocations.
• Bone mass measurements.
• An initial preventive physical
exam.
E:\FR\FM\19NOR2.SGM
19NOR2
ER19NO08.294</MATH>
Section 1848(d)(4)(D) of the Act
indicates that the UAF determined
under section 1848(d)(4)(B) of the Act
for a year may not be less than ¥0.07
or greater than 0.03. Since ¥0.266 is
less than ¥0.07, the UAF for CY 2009
will be ¥0.07.
Section 1848(d)(4)(A)(ii) of the Act
indicates that 1.0 should be added to the
UAF determined under section
1848(d)(4)(B) of the Act. Thus, adding
1.0 to ¥0.07 makes the UAF equal to
0.93.
ER19NO08.295</MATH>
$86.8 − $94.4
$863.7 − $926.8
× 0.75 +
× 0.33 = − 26.6%
$94.4
$94.4 × 1.074
69904
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
• Cardiovascular screening blood
tests.
• Diabetes screening tests.
• Telehealth services.
• Physician work and resources to
establish and document the need for a
power mobility device.
Comment: We received over 40
comments from organizations
representing physicians, practitioners,
and beneficiaries concerning the SGR
and the physician update. Many
commenters expressed relief that, as a
result of the MIPPA, the 0.5 percent
update in effect for the first half of 2008
was extended to the entire year, and the
mid-year 2008 rate reduction of ¥10.6
percent was retroactively replaced with
the rates in effect from January through
June 2008. They were further relieved
that in lieu of the estimated ¥15
percent update that would otherwise
have applied for 2009, the MIPPA
specified a 1.1 percent update for CY
2009. However, these commenters
remain concerned about the estimated
negative update for CY 2010 of
approximately ¥21 percent, followed
by multiple years of negative physician
updates of approximately ¥5 percent.
Commenters described how they believe
the SGR and update formulas are
flawed, and they urged us to work with
the Congress to develop a new
methodology. Some commenters
suggested using our administrative
authority to lessen the negative impact
by removing drugs from the SGR,
accounting for NCDs in the allowed
expenditures targets, and reducing the
productivity adjustment to the MEI.
Response: Ultimately, the formula for
the SGR and the physician update are
dictated by statute. We are required to
follow this methodology when
calculating the payment rates under the
PFS. We look forward to working with
the Congress, the physician community,
and other interested parties as we
continue to analyze appropriate
alternatives to the current system that
could ensure appropriate payments
while promoting high quality care,
without increasing Medicare costs.
Comment: Many commenters
emphasized that we must implement
the 1.1 percent update using the current
2008 CF as the base rate. Some
requested that we include explanations
of the calculations used to implement
the 1.1 percent conversion factor update
and how we changed the application of
5-Year Review BN. Many commenters
requested that we provide examples
showing how these changes affect
different categories of services.
Response: Per the MIPPA, the 1.1
percent physician update is applied to
the CY 2008 CF. Later in this section,
we explain the calculations used for the
CY 2009 CF, including how we
implemented both the 1.1 percent
update and the change in the
application of 5-Year Review BN.
For the impact of these changes by
specialty, see the Regulatory Impact
Analysis in section XVI. of this final
rule with comment period. In that
section, we also include the overall
impact of this final rule with comment
period on selected procedures.
C. Preliminary Estimate of the SGR for
2009
Our preliminary estimate of the CY
2009 SGR is 7.4 percent. We first
estimated the CY 2009 SGR in March
2008, and we made the estimate
available to the MedPAC and on our
Web site. Table 34 shows the March
2008 estimate and our current estimates
of the factors included in the CY 2009
SGR.
TABLE 34—2009 SGR CALCULATION
Statutory factors
March estimate
Fees ..............................................................................................
Enrollment .....................................................................................
Real Per Capita GDP ...................................................................
Law and Regulation ......................................................................
2.1 percent (1.021) .............................
¥0.2 percent (0.998) ..........................
1.8 percent (1.018) .............................
¥2.9 percent (0.971) ..........................
2.1 percent (1.021).
¥0.2 percent (0.998).
1.2 percent (1.012).
4.2 percent (1.042).
Total .......................................................................................
0.7 percent (1.007) .............................
7.4 percent (1.074).
Note: Consistent with section 1848(f)(2) of
the Act, the statutory factors are multiplied,
not added, to produce the total (that is, 1.021
× 0.998 × 1.012 × 1.042 = 1.074). A more
detailed explanation of each figure is
provided in section VIII.F.1 of this preamble.
D. Revised Sustainable Growth Rate for
2008
Our current estimate of the CY 2008
SGR is 3.2 percent. Table 35 shows our
preliminary estimate of the CY 2008
Current estimate
SGR that was published in the CY 2008
PFS final rule with comment period (72
FR 66379) and our current estimate.
TABLE 35—2008 SGR CALCULATION
Statutory factors
Estimate from CY 2008 final rule
Current estimate
Fees ..............................................................................................
Enrollment .....................................................................................
Real Per Capita GDP ...................................................................
Law and Regulation ......................................................................
1.9 percent (1.019) .............................
¥0.7 percent (0.993) ..........................
1.7 percent (1.017) .............................
¥2.9 percent (0.971) ..........................
1.4 percent (1.014).
¥3.2 percent (0.968).
1.6 percent (1.016).
3.5 percent (1.035).
Total .......................................................................................
¥0.1 percent (0.999) ..........................
3.2 percent (1.032).
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A more detailed explanation of each figure is provided in section VIII.F.2 of this preamble.
E. Final Sustainable Growth Rate for
2007
The SGR for 2007 is 3.5 percent. Table
36 shows our preliminary estimate of
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the 2007 SGR from the CY 2007 PFS
final rule with comment period (71 FR
69757), our revised estimate from the
CY 2008 PFS final rule with comment
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period (72 FR 66380) and the final
figures determined using the best
available data as of September 1, 2008.
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 36—2007 SGR CALCULATION
Statutory factors
Estimate from CY 2006
final rule
Estimate from CY 2007
final rule
Fees .................................................................................
Enrollment ........................................................................
Real per Capita GDP ......................................................
Law and Regulation .........................................................
2.2 percent (1.022) ............
¥0.9 percent (0.991) ........
2.0 percent (1.020) ............
¥1.5 percent (0.985) ........
1.9 percent (1.019) ............
¥2.6 percent (0.974) ........
1.9 percent (1.019) ............
2.0 percent (1.020) ............
2.0 percent (1.020).
¥2.0 percent (0.980).
1.8 percent (1.018).
1.7 percent (1.017).
Total ..........................................................................
1.8 percent (1.018) ............
3.2 percent (1.032) ............
3.5 percent (1.035).
A more detailed explanation of each
figure is provided in section VIII.F.3. of
this final rule.
E. Calculation of 2009, 2008, and 2007
Sustainable Growth Rates
1. Detail on the CY 2009 SGR
All of the figures used to determine
the CY 2009 SGR are estimates that will
be revised based on subsequent data.
Any differences between these estimates
and the actual measurement of these
figures will be included in future
revisions of the SGR and allowed
expenditures and incorporated into
subsequent PFS updates.
• Factor 1—Changes in Fees for
Physicians’ Services (Before Applying
Legislative Adjustments) for CY 2009
This factor is calculated as a
weighted-average of the CY 2009
changes in fees for the different types of
services included in the definition of
physicians’ services for the SGR.
Medical and other health services paid
using the PFS are estimated to account
for approximately 81.7 percent of total
allowed charges included in the SGR in
CY 2009 and are updated using the MEI.
The MEI for CY 2009 is 1.6 percent.
Diagnostic laboratory tests are estimated
to represent approximately 7.7 percent
of Medicare allowed charges included
in the SGR for CY 2009. Medicare
payments for these tests are updated by
Final
the Consumer Price Index for Urban
Areas (CPI–U), which is 5.0 percent for
CY 2009. However, section 145 of the
MIPPA reduces the increase applied to
clinical laboratory tests by 0.5 percent
for CY 2009 through CY 2013.
Therefore, for CY 2009, diagnostic
laboratory tests will receive an update of
4.5 percent. Drugs are estimated to
represent 10.6 percent of Medicare
allowed charges included in the SGR in
CY 2009. We estimated a weightedaverage change in fees for drugs
included in the SGR (using the ASP+6
percent pricing methodology) of 3.9
percent for CY 2009.
Table 37 shows the weighted-average
of the MEI, laboratory, and drug price
changes for CY 2009.
TABLE 37—WEIGHTED-AVERAGE OF THE MEI, LABORATORY, AND DRUG PRICE CHANGES FOR CY 2009
Weight
Physician ..................................................................................................................................................................
Laboratory ................................................................................................................................................................
Drugs .......................................................................................................................................................................
Weighted-average ....................................................................................................................................................
We estimate that the weighted-average
increase in fees for physicians’ services
in CY 2009 under the SGR (before
applying any legislative adjustments)
will be 2.1 percent.
• Factor 2—The Percentage Change in
the Average Number of Part B Enrollees
From CY 2008 to CY 2009
This factor is our estimate of the
percent change in the average number of
fee-for-service enrollees from CY 2008
to CY 2009. Services provided to
Medicare Advantage (MA) plan
Update
0.817
0.077
0.106
1.000
1.6
4.5
3.9
2.1
enrollees are outside the scope of the
SGR and are excluded from this
estimate. We estimate that the average
number of Medicare Part B fee-forservice enrollees will decrease by 0.2
percent from CY 2008 to CY 2009. Table
38 illustrates how this figure was
determined.
TABLE 38—AVERAGE NUMBER OF MEDICARE PART B FEE-FOR-SERVICE ENROLLEES FROM CY 2008 TO CY 2009
[Excluding beneficiaries enrolled in MA plans]
2008
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Overall .....................................................................................................
Medicare Advantage (MA) ......................................................................
Net ...........................................................................................................
Percent Increase .....................................................................................
An important factor affecting fee-forservice enrollment is beneficiary
enrollment in Medicare Advantage (MA)
plans. Because it is difficult to estimate
the size of the MA enrollee population
before the start of a CY, at this time we
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41.662 million ................................
9.592 million ..................................
32.070 million ................................
........................................................
do not know how actual enrollment in
MA plans will compare to current
estimates. For this reason, the estimate
may change substantially as actual
Medicare fee-for-service enrollment for
CY 2009 becomes known.
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Frm 00181
Fmt 4701
2009
Sfmt 4700
42.425 million.
10.431 million.
31.995 million.
¥0.2 percent.
• Factor 3—Estimated Real Gross
Domestic Product per Capita Growth in
2009
We estimate that the growth in real
GDP per capita from CY 2008 to CY
2009 will be 1.2 percent (based on the
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10-year average GDP over the 10 years
of 2000 through 2009). Our past
experience indicates that there have also
been changes in estimates of real per
capita GDP growth made before the year
begins and the actual change in GDP
computed after the year is complete.
Thus, it is possible that this figure will
change as actual information on
economic performance becomes
available to us in 2009.
MMSEA provision regarding the PQRI
bonuses payable in 2009, and the
MIPPA provisions regarding the change
in cost sharing for mental health
services, the physician update, and the
change in application of BN to the CF.
The details of the MIPPA provisions are
discussed in section III. of this final rule
with comment period.
• Factor 4—Percentage Change in
Expenditures for Physicians’ Services
Resulting From Changes in Statute or
Regulations in CY 2009 Compared With
CY 2008
A more detailed discussion of our
revised estimates of the four elements of
the 2008 SGR follows.
The statutory and regulatory
provisions that will affect expenditures
in CY 2009 relative to CY 2008 are
estimated to have an impact on
expenditures of 4.2 percent. These
include the DRA provision reducing
payments for imaging services, the
2. Detail on the 2008 SGR
• Factor 1—Changes in Fees for
Physicians’ Services (Before Applying
Legislative Adjustments) for 2008
This factor was calculated as a
weighted-average of the 2008 changes in
fees that apply for the different types of
services included in the definition of
physicians’ services for the SGR.
We estimate that services paid using
the PFS account for approximately 81.9
percent of total allowed charges
included in the SGR in CY 2008. These
services were updated using the CY
2008 MEI of 1.8 percent. We estimate
that diagnostic laboratory tests represent
approximately 7.7 percent of total
allowed charges included in the SGR in
CY 2008. Medicare payments for these
tests are updated by the CPI–U.
However, section 628 of the MMA
specifies that diagnostic laboratory tests
will receive an update of 0.0 percent
from CY 2004 through CY 2008. We
estimate that drugs represent 10.4
percent of Medicare-allowed charges
included in the SGR in CY 2008. We
estimate a weighted-average change in
fees for drugs included in the SGR of
¥0.5 percent for CY 2008.
Table 39 shows the weighted-average
of the MEI, laboratory, and drug price
changes for CY 2008.
TABLE 39—WEIGHTED-AVERAGE OF THE MEI, LABORATORY, AND DRUG PRICE CHANGES FOR CY 2008
Weight
Physician ..................................................................................................................................................................
Laboratory ................................................................................................................................................................
Drugs .......................................................................................................................................................................
Weighted-average ....................................................................................................................................................
After considering the elements
described in Table 39, we estimate that
the weighted-average increase in fees for
physicians’ services in 2008 under the
SGR (before applying any legislative
adjustments) will be 1.4 percent. Our
estimate of this factor in the CY 2008
PFS final rule with comment period was
1.9 percent (72 FR 66380). The decrease
in the estimate is due to the availability
of some actual data.
• Factor 2—The Percentage Change in
the Average Number of Part B Enrollees
From CY 2007 to CY 2008
We estimate that the average number
of Medicare Part B fee-for-service
Update
0.819
0.077
0.104
1.000
1.8
0.0
¥0.5
1.4
enrollees (excluding beneficiaries
enrolled in Medicare Advantage plans)
decreased by 3.2 percent in CY 2008.
Table 40 illustrates how we determined
this figure.
TABLE 40—AVERAGE NUMBER OF MEDICARE PART B FEE-FOR-SERVICE ENROLLEES FROM CY 2007 TO CY 2008
[Excluding beneficiaries enrolled in MA plans]
2007
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Overall .....................................................................................................
Medicare Advantage (MA) ......................................................................
Net ...........................................................................................................
Percent Increase .....................................................................................
Our estimate of the ¥3.2 percent
change in the number of fee-for-service
enrollees, net of Medicare Advantage
enrollment for CY 2008 compared to CY
2007, is lower than our original estimate
of ¥0.7 percent in the CY 2008 PFS
final rule with comment period (72 FR
66381). While our current projection
based on data from 8 months of 2008 is
lower than our original estimate of ¥0.7
percent when we had no actual data, it
is still possible that our final estimate of
this figure will be different once we
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41.055 million ................................
7.926 million ..................................
33.129 million ................................
........................................................
have complete information on CY 2008
fee-for-service enrollment.
• Factor 3—Estimated Real Gross
Domestic Product per Capita Growth in
CY 2008
We estimate that the growth in real
GDP per capita will be 1.6 percent for
CY 2008 (based on the 10-year average
GDP over the 10 years of CY 1999
through CY 2008). Our past experience
indicates that there have also been
differences between our estimates of
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Fmt 4701
2008
Sfmt 4700
41.662 million.
9.592 million.
32.070 million.
¥3.2 percent.
real per capita GDP growth made prior
to the year’s end and the actual change
in this factor. Thus, it is possible that
this figure will change further as
complete actual information on CY 2008
economic performance becomes
available to us in 2009.
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• Factor 4—Percentage Change in
Expenditures for Physicians’ Services
Resulting From Changes in Statute or
Regulations in CY 2008 Compared With
CY 2007
The statutory and regulatory
provisions that will affect expenditures
in CY 2008 relative to CY 2007 are
estimated to have an impact on
expenditures of 3.5 percent. These
include the DRA provision reducing
payments for imaging services, the
MIEA–TRHCA provisions regarding the
2007 PQRI reporting bonuses payable in
2008, and the MIPPA provisions
regarding the physician update and the
bonus payments for mental health
services. The details of the MIPPA
provisions are discussed in section III of
this final rule with comment period.
3. Detail on the CY 2007 SGR
A more detailed discussion of our
final revised estimates of the four
elements of the CY 2007 SGR follows.
• Factor 1—Changes in Fees for
Physicians’ Services (Before Applying
Legislative Adjustments) for 2007
This factor was calculated as a
weighted-average of the CY 2007
changes in fees that apply for the
different types of services included in
the definition of physicians’ services for
the SGR.
Services paid using the PFS
accounted for approximately 82.8
percent of total Medicare-allowed
charges included in the SGR for CY
2007 and are updated using the MEI.
The MEI for CY 2007 was 2.1 percent.
Diagnostic laboratory tests represented
approximately 7.4 percent of total CY
2007 Medicare allowed charges
included in the SGR and are updated by
the CPI–U. However, section 628 of the
MMA specifies that diagnostic
laboratory tests will receive an update of
0.0 percent from CY 2004 through CY
2008. Drugs represented approximately
9.7 percent of total Medicare-allowed
charges included in the SGR for CY
2007. We estimate a weighted-average
change in fees for drugs included in the
SGR of 2.1 percent for 2007. Table 41
shows the weighted-average of the MEI,
laboratory, and drug price changes for
CY 2007.
TABLE 41—WEIGHTED-AVERAGE OF THE MEI, LABORATORY, AND DRUG PRICE CHANGES FOR CY 2007
Weight
Physician ..................................................................................................................................................................
Laboratory ................................................................................................................................................................
Drugs .......................................................................................................................................................................
Weighted-average ....................................................................................................................................................
After considering the elements
described in Table 41, we estimate that
the weighted-average increase in fees for
physicians’ services in CY 2007 under
the SGR (before applying any legislative
adjustments) was 2.0 percent. This
figure is a final one based on complete
data for CY 2007.
• Factor 2—The Percentage Change in
the Average Number of Part B Enrollees
From CY 2006 to CY 2007
We estimate the decrease in the
number of fee-for-service enrollees
Update
0.828
0.074
0.097
1.000
2.1
0.0
2.1
2.0
(excluding beneficiaries enrolled in MA
plans) from CY 2006 to CY 2007 was
¥2.0 percent. Our calculation of this
factor is based on complete data from
CY 2007. Table 42 illustrates the
calculation of this factor.
TABLE 42—AVERAGE NUMBER OF MEDICARE PART B FROM CY 2006 TO CY 2007
[Excluding beneficiaries enrolled in MA Plans]
2006
Overall .....................................................................................................
Medicare Advantage (MA) ......................................................................
Net ...........................................................................................................
Percent Increase .....................................................................................
• Factor 3—Estimated Real Gross
Domestic Product per Capita Growth in
2007
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We estimate that the growth in real
per capita GDP was 1.8 percent in 2007
(based on the 10-year average GDP over
the 10 years of CY 1998 through CY
2007). This figure is a final one based on
complete data for CY 2007.
• Factor 4—Percentage Change in
Expenditures for Physicians’ Services
Resulting From Changes in Statute or
Regulations in CY 2007 Compared With
CY 2006
Our final estimate for the net impact
on expenditures from the statutory and
regulatory provisions that affect
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40.360 million ................................
6.550 million ..................................
33.811 million ................................
........................................................
expenditures in CY 2007 relative to CY
2006 is 1.7 percent. These include the
DRA provision reducing payments for
imaging services and the MIEA–TRHCA
1-year adjustment to the CF.
IX. Anesthesia and Physician Fee
Schedule Conversion Factors for CY
2009
The CY 2009 PFS CF is $36.0666. The
CY 2009 national average anesthesia CF
is $20.9150.
A. Physician Fee Schedule Conversion
Factor
The PFS CF for a year is calculated in
accordance with section 1848(d)(1)(A)
of the Act by multiplying the previous
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2007
Sfmt 4700
41.055 million.
7.926 million.
33.129 million.
¥2.0 percent.
year’s CF by the PFS update. The
formula for calculating the PFS update
is set forth in section 1848(d)(4)(A) of
the Act. In general, the PFS update is
determined by multiplying the CF for
the previous year by the percentage
increase in the MEI times the update
adjustment factor (UAF), which is
calculated as specified under section
1848(d)(4)(B) of the Act. However,
section 101 of the MIEA–TRHCA
provided a 1-year increase in the CY
2007 CF and specified that the CF for
CY 2008 must be computed as if the 1year increase had never applied. Section
101 of the MMSEA provided a 6-month
increase in the CY 2008 CF, from
January 1, 2008, through June 30, 2008,
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and specified that the CF for the
remaining portion of 2008 and the CFs
for CY 2009 and subsequent years must
be computed as if the 6-month increase
had never applied. Section 131 of the
MIPPA extended the MMSEA increase
in the CY 2008 CF that was applicable
to the first half of the year to the entire
year, provided a 1.1 percent increase to
the CY 2009 CF, and specified that the
CFs for CY 2010 and subsequent years
must be computed as if the increases for
CYs 2007, 2008, and 2009 had never
applied.
If section 101 of the MMSEA had not
been enacted, the CY 2008 CF update
would have been ¥10.1 percent
(0.89896), as published in the CY 2008
PFS final rule with comment period (72
FR 66383). For CY 2009, the percentage
increase in the MEI is equal to 1.6
percent (1.016). The UAF is ¥7.0
percent (0.930). If section 131 of the
MIPPA had not been enacted, the CY
2009 CF update would have been ¥15.1
percent, which is the product of the
published CY 2008 update (0.89896),
the percentage increase in the MEI
(1.016), and the UAF (0.930).
Section 131 of the MIPPA provided a
1.1 percent increase in the CY 2009 CF.
Consistent with section 131 of the
MIPPA, the update for CY 2009 is 1.1
percent.
Budget Neutrality Adjustment: Section
133(b) of the MIPPA
Section 1848(c)(2)(B)(i) of the Act
requires that we review the RVUs no
less often than every 5 years. Section
1848(c)(2)(B)(ii)(II) of the Act requires
that increases or decreases in RVUs for
a year 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 must make
adjustments to preserve BN.
The most recent 5-Year Review of the
work RVUs was implemented in 2007
and 2008. We estimated that the 5-Year
Review of work RVUs, including the
refinement to the work RVU changes for
the additional codes and the increases
in the work of anesthesia services,
would result in a change in
expenditures that would exceed $20
million if we made no offsetting
adjustment. In CY 2007, we met the BN
requirement by applying a separate BN
adjustment factor to the work RVUs of
¥10.06 percent. In CY 2008, due to
subsequent changes related to the 5Year Review of work, the separate BNF
for work RVUs was ¥11.94 percent.
Section 133(b) of the MIPPA requires
the Secretary, instead of continuing to
apply the BN adjustment required as a
result of the 5-Year Review of work to
the work RVUs, to apply the required
BN adjustment to the CF beginning with
CY 2009. Shifting the 11.94 percent
separate work adjustment to the CF
requires a reduction to the CF of 6.41
percent (0.9359). (Work RVUs represent
slightly over half of PFS payments; PE
and malpractice RVUs comprise the
rest.) Payments for the work portion of
the PFS will increase as a result of this
change. However, this increase will be
offset in the aggregate by the decrease to
the CF. Therefore, this increase is
budget neutral prior to the interaction
with section 5102 of the DRA (see below
for a discussion of the interaction with
section 5102 of the DRA.) For the
impact by specialty of section 133(b) of
the MIPPA, see the Regulatory Impact
Analysis in section XVI. of this final
rule with comment period.
Section 5102(b)(1) of the DRA
amended section 1848(b) of the Act and
added paragraph (4), requiring that the
payment for the TC of certain imaging
services (including the technical portion
of the global fee) cannot exceed the
payment for the same service under the
Outpatient Prospective Payment System
(OPPS). In general, if the payment for
these services as calculated using PFS
RVUs would exceed the payment for the
same service under the OPPS, we cap
the TC of the PFS payment amount at
the OPPS payment amount. Section
5102(a)(3) amended section
1848(c)(2)(B) of the Act and added
clause (v) to exempt certain reduced
expenditures from the BN provision.
Section 5102(b)(2) added subclause (II),
which specifically excluded savings
generated by the OPPS imaging services
cap from the PFS BN requirement. (For
further discussion of section 5102 of the
DRA, see the CY 2007 PFS final rule
with comment period (71 FR 69659).)
The separate work BN adjustor did
not impact payment for the TC of
imaging services, since this portion of
the service does not have work RVUs.
When the BN adjustment is made to the
CF as required under section 133(b) of
MIPPA, however, the adjustment does
lower payments for the TC of imaging
services. Because the reduction to the
CF lowers the payments for the TC of
imaging services, there are less aggregate
savings resulting from the OPPS
payment cap under section 5102 of the
DRA with the BN adjustment to the CF
than there are with the separate work
BN adjustment. This is because services
will be paid at the OPPS rate both before
and after the application of the BN
adjustment, resulting in no BN savings
from these services. We estimate that
the reduction in aggregate savings will
be approximately $0.2 billion in 2009.
In other words, Medicare expenditures
in the aggregate will increase by $0.2
billion relative to what would have
occurred in the absence of section
133(b) of the MIPPA.
As stated earlier, section
1848(c)(2)(B)(ii)(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 must make adjustments to preserve
BN. We estimate that CY 2009 RVU
changes would result in a decrease in
Medicare physician expenditures.
Therefore, we are increasing the CF by
1.0008 to offset this estimated decrease
in Medicare physician expenditures due
to the CY 2009 RVU changes.
We illustrate the calculation of the CY
2009 PFS CF in Table 43.
TABLE 43—CALCULATION OF THE CY 2009 PFS CF
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CY 2008 Conversion Factor ..........................................................................................................................................
CY 2009 CF Update ......................................................................................................................................................
CY 2009 CF Budget Neutrality Adjustment ...................................................................................................................
5-Year Review Budget Neutrality Adjustment ...............................................................................................................
CY 2009 Conversion Factor ..........................................................................................................................................
Payment for services under the PFS
will be calculated as follows:
Payment = [(RVU work × GPCI work)
+ (RVU PE × GPCI PE) + (RVU
malpractice × GPCI malpractice)] × CF.
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B. Anesthesia Conversion Factor
We calculate the anesthesia CF in
Table 44. Anesthesia services do not
have RVUs like other PFS services.
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$38.0870.
1.1 percent (1.011).
0.08 percent (1.0008).
¥6.41 percent (0.9359).
$36.0666.
Therefore, we account for any necessary
RVU adjustments through an adjustment
to the anesthesia CF to simulate changes
to RVUs. More specifically, if there is an
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adjustment to the work, PE, or
malpractice RVUs, these adjustments
are applied to the respective shares of
the anesthesia CF as these shares are
proxies for the work, PE, and
malpractice RVUs for anesthesia
services.
As explained above, section 133(b) of
the MIPPA provided for the application
of the 2007–2008 5-Year work review
BN adjustor to the PFS CF for years
beginning with CY 2009. To make this
change for the anesthesia CF, we
recalculated the adjustments to the
anesthesia CF for CY 2007 and CY 2008
by removing the BN adjustor for work,
which had been applied to calculate the
CF for each of these years. The adjustor
for the work BN is applied as a separate
adjustment to the anesthesia CF as it is
similarly applied to the PFS CF. In
addition, for the calculation of the CY
2008 anesthesia CF, we recognized the
32 percent increase in anesthesia work
69909
adopted under the third 5-Year Review
of work. We also applied the
adjustments that were made in CY 2007
and CY 2008 for anesthesia PE and
anesthesia malpractice. (The anesthesia
CFs shown in the Table 44 for 2007 and
2008 are not the rates used to pay claims
for services furnished in those calendar
years, but are recalculated anesthesia
CFs showing the removal of the work
BN adjustor.)
TABLE 44—CALCULATION OF THE CY 2009 ANESTHESIA CONVERSION FACTOR
CY 2006 Anesthesia CF ......................................................................................................................................................................
2007 Adjustment without BN adjustor .................................................................................................................................................
CY 2007 Anesthesia CF ......................................................................................................................................................................
2007 Adjustment without BN adjustor .................................................................................................................................................
2008 Legislative Update Factor ...........................................................................................................................................................
CY 2008 Anesthesia CF ......................................................................................................................................................................
2009 MIPPA CF Adjustor ....................................................................................................................................................................
2009 MIPAA Update (1.1%) ................................................................................................................................................................
2009 Combined Adjustment to Anesthesia CF ...................................................................................................................................
CY 2009 Anesthesia CF ......................................................................................................................................................................
X. Telehealth Originating Site Facility
Fee Payment Amount Update
Section 1834(m) of the Act establishes
the payment amount for the Medicare
telehealth originating site facility fee for
telehealth services provided from
October 1, 2001, through December 31
2002, at $20. For telehealth services
provided on or after January 1 of each
subsequent calendar year, the telehealth
originating site facility fee is increased
by the percentage increase in the MEI as
defined in section 1842(i)(3) of the Act.
The MEI increase for 2009 is 1.6
percent.
Therefore, for CY 2009, the payment
amount for HCPCS code Q3014,
$17.7663
0.9874
$17.5424
1.2528
0.5% (1.0050)
$22.0871
0.9359
1.0110
1.0008
$20.9150
Telehealth originating site facility fee, is
80 percent of the lesser of the actual
charge or $23.72.
The Medicare telehealth originating
site facility fee and MEI increase by the
applicable time period is shown in
Table 45.
TABLE 45—THE MEDICARE TELEHEALTH ORIGINATING SITE FACILITY FEE AND MEI INCREASE BY THE APPLICABLE TIME
PERIOD
MEI increase
(percent)
Facility fee
$20.00
$20.60
$21.20
$21.86
$22.47
$22.94
$23.35
$23.72
..................................................................................................................................................
..................................................................................................................................................
..................................................................................................................................................
..................................................................................................................................................
..................................................................................................................................................
..................................................................................................................................................
..................................................................................................................................................
..................................................................................................................................................
XI. Payment for Certain Durable
Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS)—
Services Excluded From Coverage
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A. Low Vision Aid Exclusion
1. Background
Section 1862(a)(7) of the Act excludes
payment under Medicare Part A and
Part B where ‘‘expenses are for * * *
eyeglasses (other than eyewear
described in section 1861(s)(8) of the
Act) or eye examinations for the
purpose of prescribing, fitting, or
changing eyeglasses, procedures
performed (during the course of any eye
examination) to determine the refractive
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state of the eyes * * *’’ Section
411.15(b) excludes from coverage,
eyeglasses and contact lenses, except
for—
• Post-surgical prosthetic lenses
customarily used during convalescence
for eye surgery in which the lens of the
eye was removed (for example, cataract
surgery);
• Prosthetic lenses for patients who
lack the lens of the eye because of
congenital absence or surgical removal;
and
• One pair of conventional eyeglasses
or conventional contact lenses furnished
after each cataract surgery during which
an intraocular lens is inserted.
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N/A
3.0
2.9
3.1
2.8
2.1
1.8
1.6
Period
10/01/2001–12/31/2002
01/01/2003–12/31/2003
01/01/2004–12/31/2004
01/01/2005–12/31/2005
01/01/2006–12/31/2006
01/01/2007–12/31/2007
01/01/2008–12/31/2008
01/01/2009–12/31/2009
From as early as 1980, we have
clarified that we viewed closed circuit
visual aid systems and other low vision
devices to be subject to the eyeglass
coverage exclusion at section 1862(a)(7)
of the Act. On July 16, 1980, we
conveyed from the Acting Director,
Office of Coverage Policy, Bureau of
Program Policy, Health Care Financing
Administration, to the Regional
Administrator, San Francisco, an
example of this clarification. We stated
in a memorandum that closed circuit
visual aid systems, in providing
magnification serve the same function
as eyeglasses, coverage of which is
specifically excluded by Medicare law
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(section 1862(a)(7) of the Act). This
document explained that section
1862(a)(7) of the Act is an overriding
statutory coverage exclusion which
would apply even if these devices were
determined to meet Medicare’s
definition of durable medical
equipment. Moreover, the Medicare
Appeals Council has recognized that
video magnifiers, or closed circuit
televisions (CCTVs), are subject to the
eyeglass coverage exclusion at section
1862(a)(7) of the Act. However, we have
never issued a regulation or national
coverage decision (NCD) that
specifically states that the eyeglass
exclusion at section 1862(a)(7) of the
Act applies to low vision aids.
2. Provisions of the Proposed Rule
In the Competitive Acquisition for
Certain Durable Medical Equipment,
Prosthetics, Orthotics, and Supplies
(DMEPOS) proposed rule (hereinafter
referred to as the May 1, 2006 proposed
rule (71 FR 25654, at 25659 and 25687)),
we proposed to revise § 411.15(b),
which provides certain specific
exceptions to the eyeglass coverage
exclusion, to expressly state the scope of
the eyeglass exclusion. In proposing this
revision, we were mindful that three
United States District courts found that
the Act does not prohibit payment for
video magnifiers. (Collins v. Thompson,
No 2:03-cv-265-FtM-29SPC (M.D. Fla.
June 4, 2004); Davidson v. Thompson,
No. Civ. 04–32 LFG (D.N.M. 2004);
Currier v. Thompson, 369 F. Supp. 2d
65 (D. Me. 2005)). We also noted that
the Currier case recognized that the
statute was ambiguous, and the
Supreme Court has recognized that a
prior judicial construction of an
ambiguous statute does not categorically
control an agency’s contrary
construction (National Cable &
Telecommunications Association v.
Brand X Internet Services, 545 U.S. 967,
982 (2005)).
We have a longstanding practice of
denying claims for low visions aids and
have stated in both judicial and
administrative processes our position
that low vision aids fall within the
statutory eyeglass exclusion. The
purpose of this final regulation is not to
withdraw coverage of low vision aids
but to codify in regulations our
longstanding practice of not covering
these devices.
In the May 1, 2006 proposed rule, we
proposed to clarify under proposed
§ 411.15(b) that the scope of the eyeglass
coverage exclusion encompasses all
devices irrespective of their size, form,
or technological features that use one or
more lenses to aid vision or provide
magnification of images for impaired
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vision. This proposed regulatory
provision would clarify that the statute
does not support the interpretation that
the term ‘‘eyeglasses’’ only applies to
lenses supported by frames that pass
around the nose and ears. The
underlying technology and the function
of eyeglasses are to use lenses to assist
persons with impaired vision. Dorland’s
Illustrated Medical Dictionary (28th Ed.
1994) defines ‘‘eyeglass’’ simply as a
‘‘lens for aiding sight.’’ Low vision aids
depend on the use of a lens to aid
vision. For example, computers can use
lenses to enlarge print to help
individuals who need visual assistance
in reading. The Cleveland Clinic on its
Web site, under the heading of ‘‘Coping
with Vision Loss’’, lists examples of
popular low vision aids. The examples
include telescopic glasses, lenses that
filter light, magnifying glasses, hand
magnifiers, close-circuit television, and
reading prisms.
We interpret the eyeglass exclusion at
section 1862(a)(7) of the Act as
encompassing all of the various types of
devices that use lenses for the correction
of vision unless there is a statutory
exception that allows for coverage, or
the existing regulatory exceptions that
remain unchanged at § 411.15(b) allow
coverage. For example, section
1861(s)(8) of the Act provides for one
pair of conventional eyeglasses or
contact lenses after each cataract surgery
with insertion of an intraocular lens.
We noted that if the term ‘‘eyeglasses’’
as used at section 1862(a)(7) of the Act
was interpreted to refer only to the
exclusion of payment for lenses
supported by frames that pass around
the nose and ears, then the eyeglass
exclusion would not apply to contact
lenses and there would have been no
reason for the Congress to make an
exception to section 1862(a)(7) of the
Act for contact lenses. However, the
Congress enacted the Omnibus Budget
Reconciliation Act of 1990 (Pub. L. 101–
508) (OBRA 90). Section 4153(b)(2)(B) of
the OBRA 90 provides for an exception
to section 1862(a)(7) of the Act that
allows coverage of contact lenses
furnished after cataract surgery with the
insertion of an intraocular lens.
Considering sections 1862(a) and
1861(s) of the Act together indicates that
the eyeglass exclusion also applies to
contact lenses, except for contact lenses
furnished under the specific conditions
noted in section 1861(s) of the Act, that
being, after each cataract surgery with
the insertion of an intraocular lens. By
applying the eyeglass exclusion to
contact lenses, we believe that not only
does the plain language of the statute
reinforce our interpretation that the
exclusion encompasses the use of any
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device that uses a lens to aid vision, and
is not limited to just lenses supported
by frames that pass around the nose and
ears, but that this interpretation best
captures the Congress’ intent.
Also, when referring to ‘‘conventional
eyeglasses,’’ section 1861(s)(8) of the
Act is affirming that the term
‘‘eyeglasses’’ has a wider application
than ‘‘conventional eyeglasses’’ and the
terms ‘‘conventional eyeglasses’’ and
‘‘eyeglasses’’ are not synonymous in the
statute. Moreover, the statute uses the
terms ‘‘eyewear’’ and ‘‘contact lenses’’
in reference to the eyeglass exclusion,
further suggesting that these terms are
not synonymous.
Our interpretation of the term
eyeglasses is consistent with the
regulatory language used for the
optional benefit in the Medicaid
program under § 440.120(d) for
eyeglasses. Section 1905(a)(12) of the
Act defines the term ‘‘medical
assistance’’ to include eyeglasses as an
optional service. The Medicaid
regulations implementing this section of
the statute defines eyeglasses to mean
‘‘lenses, including frames, and other
aids to vision * * * ’’ Therefore, in
setting program parameters, both
Medicaid and Medicare are consistently
interpreting in regulations a statutory
reference to eyeglasses as including low
vision aids.
Although the technology of using
lenses to aid low vision may continue
to be improved with new innovations,
such as contact lenses, progressive
lenses, and low vision aids, this does
not exempt the new technology from the
eyeglass exclusion. The adaptation of
the vision aid technology does not
change the essential nature of the
device: a video magnifier is a device
that utilizes a lens to enhance vision.
We believe this interpretation is
consistent with the decision in Warder
v. Shalala, 149 F 3d 73 (1st Cir. 1998),
in which the United States Court of
Appeals for the First Circuit held, in
part, that the Secretary’s classification of
a seating system as DME, even though
it was a technologically advanced
seating system, was supported by the
Medicare statute and regulations. In
reaching this conclusion, the Court
stated that the Secretary could conclude
that the seating system met the
definition of DME, which
‘‘unequivocally includes
‘wheelchairs,’ ’’ since the system served
the same (as well as additional)
functions as a wheelchair. We believe
this case affirms the principle that the
Secretary has the discretion to interpret
the statute and to assign a product to a
particular Medicare category even when
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3. Public Comments Received on the
Proposed Rule
Comment: Several commenters urged
that low vision aids should be covered
for individuals with vision loss to help
individuals to remain as independent as
possible, to ensure quality of life, to
conduct activities of daily living safely
and effectively, and to avoid placement
in assistive living or nursing homes. The
commenters believe the use of
prescribed low vision aids would help
avoid greater expenses to the Medicare
program due to reduced illnesses,
injuries, and loss of independence.
Several commenters indicated that they
did not have sufficient funds to obtain
these items without Medicare coverage.
Response: We understand and can
appreciate the commenters’ concerns.
However, the Medicare statute does not
provide for the coverage of every service
or item that may increase an
individual’s quality of life or which may
provide a medical benefit. For example,
in addition to excluding eyeglasses from
coverage, the Act also generally
excludes coverage of dental services,
orthopedic shoes, and hearing aids. We
understand that eyeglasses aid
individuals in conducting activities of
daily living; however, the Medicare
statute makes only limited exceptions to
the statutory eyeglass coverage
exclusion, such as for ‘‘conventional
eyeglasses and contact lenses,’’ in
certain cases. Moreover, we believe the
appropriate regulatory interpretation of
this statutory exclusion is to remain
consistent with our longstanding views,
and finalize the proposed regulation
without modification.
Comment: Some commenters stated
that the regulation does not rely on the
plain language of the statute. The
commenters suggested that eyeglasses
and low vision devices are dissimilar:
eyeglasses are optical systems to aid the
vision of a person who essentially has
normal vision, while low vision aids are
prosthetic in nature for persons whose
vision is impaired in other ways than
refractive error. The commenters believe
that the regulation fails to distinguish
between lenses that correct refractive
errors in eyes with normal visual
function and lenses and devices that
enlarge images to make them visible to
eyes with subnormal visual function.
The commenters also stated that the
regulation is not in accord with certain
established case law, that it conflicts
with Congressional intent, and ignores
other Medicare regulations and
definitions that could be used to cover
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low vision aids as DME or prosthetic
devices.
Response: As a general matter, we
disagree with the commenters’ concerns
raised above. First, we continue to
believe that our interpretation is
consistent with the plain language of the
Medicare statute, and alternatively, if
the statute is ambiguous to this point,
we believe our interpretation best
captures the Congress’ intent and is a
reasonable and permissible
interpretation.
Second, eyeglasses and low vision
aids are not dissimilar, but the same, in
that, they both use lenses to aid poor
vision or provide magnification of
images for impaired vision. The
operative component of the eyeglass is
the lens because it is the component
that provides visual improvement. It
may be useful to consider standard
dictionary definitions of the word
‘‘eyeglass.’’ For example, the Webster’s
Third New Int. Dictionary (1976)
defines ‘‘eyeglass’’ to include the
eyepiece of an optical instrument (as in
a microscope or telescope). Also, the
Webster’s New Collegiate Dictionary
(8th Ed, 1979) includes eyepiece as its
first definition for eyeglass. It defines
eyepiece as the lens or combination of
lenses at the eye end of an optical
instrument.
As can be clearly seen through the
dictionary definitions, any type of
eyeglass, conventional or otherwise, is a
device used for aiding sight. Lenses
used with low vision aids are for the
purpose of improving vision, as are the
lenses used with conventional
eyeglasses.
While we understand that some may
suggest that a more narrow reading of
the statutory exclusion may be
appropriate, we disagree and believe
that our interpretation is a reasonable
and permissible construction of the
statutory exclusion, and one that best
matches the Congress’ intent.
In addition to the plain language of
the Medicare statutory exclusion itself,
language in other sections of the statute
further supports our interpretation. For
example, in section 1862(a)(7) of the
Act, the Congress makes an exception to
the eyeglass exclusion for certain
conventional eyeglasses and contact
lenses used after cataract surgery. This
exception indicates that the eyeglass
exclusion applies to more than lenses in
frames worn around the nose and ears.
In referring to the eyeglass exclusion,
the Medicare statute uses various terms,
such as eyeglasses, eyewear,
conventional eyeglasses and contact
lenses, which strongly indicates that the
eyeglass exclusion applies to more than
just conventional eyeglasses. Additional
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evidence of Congressional intent
regarding the meaning of the term
‘‘eyeglasses’’ can be found in the
conference report accompanying the
original legislation in 1965 (S. Rep. No.
89–404, 49). Although the original
statutory language referred to
eyeglasses, the conference report also
referred to contact lenses, suggesting
that the Congress did not intend to
construe the term narrowly.
We also note that there is nothing in
either the Medicare statutory language
of the eyeglass coverage exclusion or the
accompanying legislative history to
suggest that the exclusion is limited to
lenses used to correct refractive errors or
other types of specific visual problems;
rather, it is stated without reference to
any particular types of visual problems.
Additionally, to the extent there is
some ambiguity (as noted above in our
discussion of the Currier case, where the
court noted that ambiguity exists with
respect to this statutory exclusion and
low vision aids), the Supreme Court
recognizes that a prior judicial
construction of an ambiguous statute
does not categorically control an
agency’s contrary construction. As
noted above, we understand that some
may believe a more narrow
interpretation would be appropriate in
this instance. We disagree and continue
to believe we have interpreted the
Medicare statute in a way that best
captures the Congress’s intent and that
our interpretation is a reasonable and
permissible reading of the statutory
exclusion.
Furthermore, we have followed the
necessary procedures set forth under the
Administrative Procedures Act for
agencies to follow in establishing
interpretive rules to ensure that this
regulatory clarification of our
longstanding Medicare policy has been
given the appropriate consideration and
review.
Finally, as noted in more detail
below, if an item or service falls within
a benefit category, it must not be
otherwise excluded, in order for
coverage to be considered. Thus,
whether an item that falls within the
scope of statutory exclusion clarified by
this regulation falls within a defined
Medicare benefit category, does not alter
the analysis as to whether the statutory
exclusion for eyeglasses may apply.
Comment: Some commenters believe
the regulation does not consider
advancements in medical technology
and would automatically deny coverage
for any new technology designed to
assist individuals with vision
impairments. As a result, the
commenters stated this regulation
creates a disincentive for manufacturers
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and innovators to develop new and
progressive vision technology.
Response: We disagree with the
commenters that this regulation creates
a disincentive for manufacturers and
innovators to develop new and
progressive vision technology. As noted
above, it is true that new medical
advancements and new technologies in
the area of vision impairment may fall
within the scope of the statutory
exclusion clarified in this regulation
and coverage may be prohibited under
Medicare.
We do not automatically deny
coverage for technologically improved
items or services, instead, as a general
matter, we cover technologically
improved items or services if all
coverage requirements are met. Many
items, however, are not covered by
Medicare, yet the relevant industries
continue to develop and achieve major
advancements in technology. For
example, while we do not cover dental
services or hearing aids, there continue
to be advances in the furnishing of
dental care and technological advances
in the use of hearing aids. In addition,
Medicare has had a longstanding history
of not covering low vision aids, yet,
manufacturers continue to make
technological improvements in this
area. Moreover, there are existing
incentives beyond Medicare
reimbursement that will continue to
encourage manufacturers and
innovators to improve vision
technology.
Comment: Other commenters believe
it is inconsistent and discriminatory for
Medicare to cover wheelchairs to assist
individuals with impaired mobility and
not to cover low vision aids to assist
individuals with impaired vision.
Response: In order to be covered
under Medicare, an item or service must
fall within one or more benefit
categories contained within Part A or
Part B, and must not be otherwise
excluded from coverage. Wheelchairs,
which may assist individuals with
impaired mobility, fall within the
defined benefit category for durable
medical equipment under section
1861(n) of the Act, and are not
otherwise excluded from coverage
under section 1862(a) of the Act. Low
vision aids, on the other hand, are
excluded from coverage under section
1862(a)(7) of the Act and we must
comply with this provision.
Comment: Some commenters
suggested that CMS allow for a more
fully vetted process prior to any rule for
or against low vision aid coverage.
Response: We are issuing this final
regulation in accordance with the
requirements of the Administrative
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Procedures Act (the APA). On May 1,
2006, we issued a proposed rule that
discussed the background and rationale
pertaining to our proposed provisions to
apply the eyeglass coverage exclusion to
low vision aids. In accordance with
section 1871(b)(1) of the Act, we
proposed this regulation pursuant to a
60-day public comment period. After
reviewing and considering the public
comments, relevant case law, and our
existing policies on this issue, we are
issuing this final rule without
modification. We believe it sets forth a
reasonable and permissible
interpretation of the Medicare statutory
eyeglass coverage exclusion.
Comment: Commenters expressed
concern that the use of assistive low
vision aids associated with
rehabilitative therapy services, which
are identified by Medicare-covered
Current Procedural Terminology (CPT)
codes, such as CPT code 97535, would
no longer be covered by Medicare if
subjected to the eyeglass exclusion.
Response: Low vision aids are not
covered, items based on the statutory
eyeglass exclusion. A practitioner is
paid for his or her professional services.
Supplies and instruments used in
providing those services are not paid for
separately, rather payment is made
based on the practitioner’s PEs.
4. Provisions of the Final Rule
After consideration of the public
comments received, we are finalizing
§ 411.15(b) without modification.
B. Replacement of Reasonable Charge
Methodology by Fee Schedules for
Therapeutic Shoes
We are finalizing proposed
§ 414.228(c) to codify that the Medicare
fee schedule amounts for therapeutic
shoes, inserts, and shoe modifications
are established in accordance with the
methodology specified in sections
1833(o) and 1834(h) of the Act.
Section 627 of the MMA mandated fee
schedule amounts for therapeutic shoes
and inserts effective January 1, 2005,
calculated using the prosthetic and
orthotic fee schedule methodology in
section 1834(h) of the Act. In
accordance with section 627 of the
MMA, fee schedule amounts for
therapeutic shoes, inserts and shoe
modifications were established and
added to the DMEPOS fee schedule
through program instructions, effective
January 1, 2005.
In our May 1, 2006 proposed rule (71
FR 25654), we proposed to add
§ 414.228(c) to specify that the Medicare
fee schedule amounts for therapeutic
shoes, inserts, and shoe modifications
are established in accordance with the
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methodology specified in sections
1833(o) and 1834(h) of the Act. Section
627 of the MMA amended section
1833(o)(2) of the Act to require
implementation of fee schedule
amounts, effective January 1, 2005, for
the purpose of determining payment for
custom molded shoes, extra-depth
shoes, and inserts (collectively,
‘‘therapeutic shoes’’). Section 627 of the
MMA was initially implemented
through program instructions, and on
January 1, 2005, Medicare began paying
for therapeutic shoes, inserts, and shoe
modifications based on fee schedule
amounts determined in accordance with
section 1834(h) of the Act and 42 CFR
part 414, subpart D of our regulations.
We did not receive any comments on
our proposal to add § 414.228(c) to 42
CFR part 414, subpart D of our
regulations. Therefore, we are finalizing
proposed § 414.228(c) regarding the
methodology used to establish fee
schedule amounts for therapeutic shoes,
inserts and shoe modifications.
XII. Provisions of the Final Rule
The provisions of this final rule with
comment period restate the provisions
of the CY 2009 PFS proposed rule,
except as noted elsewhere in the
preamble.
XIII. Waiver of Proposed Rulemaking
and Delay in Effective Date
We ordinarily publish a notice of
proposed rulemaking in the Federal
Register and invite public comment on
the proposed rule. The notice of
proposed rulemaking includes a
reference to the legal authority under
which the rule is proposed, and the
terms and substances of the proposed
rule or a description of the subjects and
issues involved. This procedure can be
waived, however, if an agency finds
good cause that a notice-and-comment
procedure is impracticable,
unnecessary, or contrary to the public
interest and incorporates a statement of
the finding and its reasons in the rule
issued.
We utilize HCPCS codes for Medicare
payment purposes. The HCPCS is a
national drug coding system comprised
of Level I (CPT) codes and Level II
(HCPCS National Codes) that are
intended to provide uniformity to
coding procedures, services, and
supplies across all types of medical
providers and suppliers. Level I (CPT)
codes are copyrighted by the AMA and
consist of several categories, including
Category I codes which are 5-digit
numeric codes, and Category III codes
which are temporary codes to track
emerging technology, services, and
procedures.
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The AMA issues an annual update of
the CPT code set each Fall, with January
1 as the effective date for implementing
the updated CPT codes. The HCPCS,
including both Level I and Level II
codes, is similarly updated annually on
a CY basis. Annual coding changes are
not available to the public until the Fall
immediately preceding the annual
January update of the PFS. Because of
the timing of the release of these new
codes, it is impracticable for CMS to
provide prior notice and solicit
comment on these codes and the RVUs
assigned to them in advance of
publication of the final rule that
implements the PFS. Yet, it is
imperative that these coding changes be
accounted for and recognized timely
under the PFS for payment because
services represented by these codes will
be provided to Medicare beneficiaries
by physicians during the CY in which
they become effective. Moreover,
regulations implementing HIPAA (42
CFR parts 160 and 162) require that the
HCPCS be used to report health care
services, including services paid under
the PFS. We also assign interim RVUs
to any new codes based on a review of
the RUC recommendations for valuing
these services. By reviewing these RUC
recommendations for the new codes, we
are able to assign RVUs to services
based on input from the medical
community and to establish payment for
them, on an interim basis, that
corresponds to the relative resources
associated with furnishing the services.
If we did not assign RVUs to new codes
on an interim basis, the alternative
would be to either not pay for these
services during the initial CY or have
each carrier establish a payment rate for
these new codes. We believe both of
these alternatives are contrary to the
public interest, particularly since the
RUC process allows for an assessment of
the valuation of these services by the
medical community prior to our
establishing payment for these codes on
an interim basis. Therefore, we believe
it would be contrary to the public
interest to delay establishment of fee
schedule payment amounts for these
codes.
For the reasons outlined above in this
section, we find good cause to waive the
notice of proposed rulemaking for the
interim RVUs for selected procedure
codes identified in Addendum C and to
establish RVUs for these codes on an
interim final basis. We are providing a
60-day public comment period.
Section IV.C. of this final rule with
comment discusses the identification
and review of 204 potentially misvalued
codes by a workgroup of the AMA RUC,
as well as our review and decisions
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regarding the AMA RUC workgroup’s
recommendations. The AMA RUC
submitted several recommendations for
misvalued codes in May 2008 and the
remainder of their recommendations for
misvalued codes in October 2008. Due
to the timing of the May 2008 AMA
RUC recommendations, it was
impracticable for CMS to adequately
evaluate and solicit public comment
prior to this final rule with comment
period. We believe it is in the public
interest to implement the revised RVUs
for the 61 codes that were identified as
misvalued, and that have been reviewed
and re-evaluated by the AMA RUC
workgroup, on an interim final basis for
CY 2009. These revisions will establish
a more appropriate payment for these
services, some of which changed
significantly since they were originally
valued. The revisions of RVUs for these
codes will establish a more appropriate
payment that better corresponds to the
relative resources associated with
furnishing these services. A delay in
implementing revised values for these
misvalued codes would not only
perpetuate the known misvaluation for
these services, it would also perpetuate
a distortion in the payment for other
services under the PFS. Implementing
the changes now allows for a more
equitable distribution of payments
across all PFS services. We believe a
delay in implementation of these
revisions would be contrary to the
public interest, particularly since the
AMA RUC process allows for an
assessment of the valuation of these
services by the medical community
prior to the AMA RUC’s
recommendation to CMS.
For the reasons described above, we
find good cause to waive notice and
comment procedures with respect to the
misvalued codes identified in Table 26,
and to revise RVUs for these codes on
an interim final basis. We are providing
a 60-day public comment period.
Sections III. and VI.B. of this final rule
with comment period also address
certain provisions of the Medicare
Improvements for Patients and
Providers Act of 2008 (MIPPA) (Pub. L.
110–275) which became law after
publication of the CY 2009 PFS
proposed rule. Except as noted further
below, we consider these provisions to
be self-implementing. We are revising
our policies and regulations as
described in this final rule with
comment period in order to conform
them to the statutory amendments.
Because these revisions are in
accordance with explicit statutory
amendments, we find that notice and
comment procedures are unnecessary
for their implementation. Therefore, we
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find good cause to waive notice and
comment procedures with respect to the
changes in policy and regulations to
effectuate the self-implementing
provisions of the MIPPA as described in
this final rule with comment period.
Section 131(c) of the MIPPA requires
the Secretary to implement a Physician
Feedback Program no later than January
1, 2009. Under the program, the
Secretary must use claims data to
provide confidential reports to
physicians that measure resources
involved in furnishing care to
individuals (and, if determined
appropriate, the reports can also include
information about the quality of care
furnished). Although this provision is
self-implementing in certain respects,
especially given that many elements of
this program are already in place as a
result of our previous data analysis and
reporting efforts, we would ordinarily
engage in notice and comment
rulemaking to establish other aspects of
this program. To the extent this
provision is not self-implementing, we
find good cause to waive notice and
comment rulemaking because it would
be contrary to the public interest to
delay implementation of this program.
Moreover, we note that the confidential
feedback reporting will serve
informational purposes and will not
affect any rights or obligations under the
Medicare program.
Section 144(b) of the MIPPA repeals
the requirement that an oxygen supplier
transfer title to oxygen equipment to the
beneficiary after a 36-month rental
period. In its place, section 144(b) of the
MIPPA establishes a 36-month rental
cap and sets forth new rules for
furnishing oxygen and oxygen
equipment after the 36-month period.
The current oxygen payment regulations
reflect the previous transfer of title
requirements, and we are revising these
rules to reflect the changes set forth in
section 144(b) of the MIPPA.
These changes are largely selfimplementing. Section
1834(a)(5)(F)(ii)(I) of the Act, as
amended by MIPPA, requires suppliers
to continue to furnish oxygen
equipment following the 36-month
rental period, and section
1834(a)(5)(F)(ii)(II) of the Act mandates
continued Medicare payments for
oxygen contents following the 36-month
rental period. When read in conjunction
with section 1834(a)(5)(F)(ii)(II) of the
Act, we interpret the mandate in section
1834(a)(5)(F)(ii)(I) of the Act to include
oxygen contents, as well as oxygen
equipment, given the nature of this
benefit and the requirement that
Medicare continue to pay for oxygen
contents following the 36-month rental
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period. To the extent these subsections
are not self-implementing, we find good
cause to waive notice and comment
rulemaking as contrary to the public
interest, because timely implementation
of these provisions is necessary to
ensure that beneficiaries’ oxygen
treatment—which for many
beneficiaries includes both oxygen
equipment and contents—continues
uninterrupted after January 1, 2009.
Subsection 1834(a)(5)(F)(ii)(III) of the
Act, as amended by MIPPA, authorizes
payments for maintenance and servicing
of oxygen equipment furnished after the
36-month rental period if the Secretary
determines such payments are
reasonable and necessary. As set forth in
section III. J. of this preamble, we have
determined that certain routine
maintenance and servicing payments
are reasonable and necessary to protect
Medicare beneficiaries from
malfunctioning oxygen equipment.
For the reasons described above, we
believe the completion of notice and
comment rulemaking would prevent the
timely implementation of payment for
certain maintenance and servicing of
oxygen equipment that we have
determined to be necessary for the safe
use of oxygen equipment by Medicare
beneficiaries, and that any such delay
would be contrary to the public interest.
Therefore, we find good cause to waive
the notice of proposed rulemaking with
respect to implementation of subsection
1834(a)(5)(F)(ii)(III) of the Act.
Section 149 of the MIPPA amended
section 1834(m)(4)(C)(ii) of the Act to
add certain entities as originating sites
for purposes of Medicare telehealth
services effective January 1, 2009: A
hospital-based or critical access
hospital-based (CAH-based) renal
dialysis center (including satellites); a
skilled nursing facility (as defined in
section 1819(a) of the Act); and a
community mental health center (as
defined in section 1861(ff)(3)(B) of the
Act). Section 149 of the MIPPA also
amended section 1888(e)(2)(A)(ii) of the
Act to exclude telehealth services
furnished under section
1834(m)(4)(C)(ii)(VII) of the Act from the
consolidated billing provisions of the
skilled nursing facility prospective
payment system (SNF PPS). Apart from
adding certain entities as originating
sites for payment of telehealth services,
section 149 of the MIPPA did not
change the existing telehealth eligibility
criteria, or payment and billing
requirements related to telehealth
services. Thus, the new authority for
these entities to serve as originating
sites for Medicare telehealth services is
largely self-implementing. However,
there are some operational and payment
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issues that arise as to which we would
ordinarily engage in notice and
comment rulemaking. In section III. M.
of this final rule with comment period,
we describe certain limitations on the
types of services for which a Medicare
telehealth payment will be made when
these entities serve as the originating
site. These requirements are similar to
those in place under current policies for
the existing list of telehealth originating
sites, but are also tailored to address the
particular characteristics of the newly
added originating sites. It is necessary to
address these requirements in a timely
manner in order to avoid potential
duplicate billing and payment, and to
ensure that facilities appropriately
furnish the requisite scope of services
for which payment is included in their
bundled or prospective payment. For
the reasons described above, we believe
that completion of notice and comment
rulemaking prior to adopting these
policies would delay timely
implementation of policies that are
important to quality care and program
integrity. Therefore, to the extent these
requirements are not self-implementing,
we find good cause to waive notice and
comment rulemaking as a delay in
implementation would be contrary to
the public interest.
As detailed above in this section, we
are implementing certain aspects of
sections 131(c), 144(b), and 149 of the
MIPPA as described in sections III.C.,
III.J., and III.M. (respectively) of this
final rule with comment period on an
interim final basis for CY 2009, and
include a 60-day comment period.
XIV. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 30day 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.
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The collection of information section
for this final rule with comment period
contains the discussion of the
information collection requirements as
it appeared in the CY 2008 PFS
proposed rule (73 FR 38502), with
updated information included as
necessary. In addition, we have
included a new discussion of the
information collection requirements
associated with the Electronic
Prescribing (E-Prescribing) Incentive
Program, as detailed in section II.O2. of
the preamble of this final rule with
comment period.
A. ICRs Regarding Independent
Diagnostic Testing Facility (§ 410.33)
Section 410.33(j) initially proposed
that a physician or nonphysician
practitioner organization furnishing
diagnostic testing services, except
diagnostic mammography services, must
enroll as an IDTF for each practice
location furnishing these services.
However, we have removed this
requirement and the associated
paperwork burden from this final rule
with comment period.
For mobile units furnishing diagnostic
testing services that are not enrolled in
the Medicare program to enroll in the
program, they must complete a
Medicare enrollment application, the
CMS–855B, and attachment 2 of the
enrollment application. 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. We believe that most
of these mobile entities are already
enrolled as IDTFs, as required in
§ 410.33(g).
However, we have no way to
accurately quantify the burden because
we cannot estimate the number of this
type of requests that we may receive.
We did not receive any public
comments to assist us in our burden
analysis. We also recognize that we will
not be able to determine the number of
the IDTFs that are billing only under
arrangement with a hospital. Therefore,
while we acknowledge that there is a
burden associated with this provision,
we also acknowledge that we have no
way to quantify this provision’s burden.
For that reason, we are assigning 1 token
burden hour to this requirement until
such a time that we can conduct an
accurate burden analysis for this
information collection requirement.
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B. ICRs Regarding Exception to the
Referral Prohibition Related to
Compensation Arrangements
(§ 411.357)
As discussed in section II.N.1. of the
preamble of this final rule with
comment period, we are not finalizing
the exception for incentive payment and
shared savings programs contained in
§ 411.357(x). Consequently, we have
removed all discussion of the associated
information collection requirements.
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.
In section II.F.2 of this final rule with
comment period, we discuss the
postponement of the CAP for CY 2009.
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
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. These provisions
change the reporting timeframes for the
actions but not the burden associated
with the requirement. While this
requirement is subject to the PRA, we
have no way to accurately quantify the
number of submissions. Each
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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 7 years
from the date of service. As discussed in
Section II.I.5 of this final rule with
comment period, we are not adopting
the proposed record retention
requirement of 10 years from the date of
service. Physicians and NPPs are
currently required to maintain written
ordering and referring documentation
for 7 years from the date of service
within the CMS Program Integrity
Manual. The burden associated with
these recordkeeping requirements is the
time and effort associated with
maintaining the aforementioned
documentation for 7 years, which is
merely the codification of the
requirements that already exist. 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 46—ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN
OMB control
number
Regulation section(s)
Respondents
Responses
Burden per
response
(hours)
Total annual
burden
(hours)
§ 410.33 .................................................
0938–0685
400,000
400,000
2.5
1,001,503
Total ................................................
..............................
400,000
400,000
2.5
1,001,503
This final rule with comment period
imposes COI requirements as outlined
in the regulation text and specified
above. However, this rule also makes
reference to several associated
information collections that are not
discussed in the regulation text which
have already received OMB approval.
These include the following:
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Part B Drug Payment
Section II.F.1 of the preamble of this
final rule with comment period
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
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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.
Competitive Acquisition Program (CAP)
Section II.F.2. of this final rule with
comment period 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
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April 30, 2009, August 31, 2009, and
June 30, 2011, respectively.
Physician Quality Reporting Initiative
(PQRI)
Section II.O1. of this final rule with
comment period discusses the
background of the PQRI 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. We are
requesting OMB’s emergency review
and approval of the information
collections referenced below.
Emergency review and approval is
necessary to meet the statutory effective
date of January 1, 2009.
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As stated in section II.O1.a.ii., eligible
professionals include physicians, other
practitioners as described in section
1842(b)(18)(c) of the Act, physical and
occupational therapists, qualified
speech-language pathologists, and
qualified audiologists. Eligible
professionals may choose whether to
participate and, to the extent they
satisfactorily submit data on quality
measures for covered professional
services, they can qualify to receive an
incentive payment. To qualify to receive
an incentive payment for 2009, the
eligible professional must meet one of
the criteria for satisfactory reporting
described in section II.O1.b. of the
preamble.
The burden associated with the
requirements of this voluntary reporting
initiative is the time and effort
associated with eligible professionals
identifying applicable PQRI quality
measures for which they can report the
necessary information. We have no way
to accurately quantify the burden
because it would vary with each eligible
professional by the number of measures
applicable to the eligible professional,
the eligible professional’s familiarity
and understanding of the PQRI, and
experience with participating in the
PQRI. In addition, eligible professionals
may employ different methods for
incorporating the use of quality data
codes into the office work flows.
Therefore, we will assign 3 hours as the
amount of time needed for eligible
professionals to review the PQRI quality
measures, identify the applicable
measures for which they can report the
necessary information, and incorporate
the use of quality data codes into the
office work flows. Information from the
Physician Voluntary Reporting Program
(PVRP) indicated an average labor cost
of $50 per hour. Thus, we estimate the
cost for an eligible professional to
review the PQRI quality measures,
identify the applicable measures for
which they can report the necessary
information, and incorporate the use of
quality data codes into the office work
flows to be approximately $150 per
eligible professional ($50 per hour × 3
hours). We expect the ongoing costs
associated with PQRI participation to
decline based on an eligible
professional’s familiarity with and
understanding of the PQRI, experience
with participating in the PQRI, and
increased efforts by CMS and
stakeholders to disseminate useful
educational resources and best
practices.
In addition, for claims-based
reporting, eligible professionals must
gather the required information, select
the appropriate quality data codes, and
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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. Preliminary
results from the 2007 PQRI (the first
year of PQRI reporting) indicate that of
approximately 619,000 unique
individual eligible professionals,
approximately 101,000 unique
individual eligible professionals, or 16
percent, attempted to submit PQRI
quality measures data in 2007.
Therefore, for purposes of conducting a
burden analysis for the 2009 PQRI, we
will assume that all eligible
professionals who attempted to
participate in the 2007 PQRI will also
attempt to participate in the 2009 PQRI.
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. Since eligible
professionals are generally required to
report on at least 3 measures to earn a
PQRI incentive, we will assume that
each eligible professional who attempts
to submit PQRI quality measures data is
attempting to earn a PQRI incentive
payment and that each eligible
professional reports on an average of 3
measures for this burden analysis.
Based on our experience with the
PVRP, we estimate that the time needed
to perform all the steps necessary to
report each measure (that is, reporting
the relevant quality data code(s) for a
measure) on claims ranges from 15
seconds (0.25 minutes) to over 12
minutes for complicated cases and/or
measures, with the median time being
1.75 minutes. Information from the
PVRP indicates that the cost associated
with this burden ranges from $0.21 in
labor time to about $10.06 in labor time
for more complicated cases and/or
measures, with the cost for the median
practice being $0.90.
The total estimated annual burden for
this requirement will also vary along
with the volume of claims on which
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quality data are reported. Preliminary
results from the 2007 PQRI indicate that
eligible professionals reported on 1 to
3,331 eligible instances per measure.
For all 2007 PQRI measures, the median
number of eligible instances reported on
per measure was less than 60. On
average, the median number of eligible
instances reported on per measure was
about 9. Therefore, for this burden
analysis, we estimate for each measure
on which an eligible professional
reports, the eligible professional reports
the quality data on 9 cases.
Based on the assumptions discussed
above, we estimate the total annual
burden per eligible professional
associated with claims-based reporting
to range from 186.75 minutes, or 3.1
hours [(0.25 minutes per measure × 3
measures × 9 cases per measure) + 3
hours] to 504 minutes, or 8.4 hours [(12
minutes per measure × 3 measures × 9
cases per measure) + 3 hours]. We
estimate the total annual cost per
eligible professional associated with
claims-based reporting to range from
$155.67 [($0.21 per measure × 3
measures × 9 cases per measure) + $150]
to $421.62 [($10.06 per measure × 3
measures × 9 cases per measure) +
$150].
For registry-based reporting, there
would be no additional burden for
eligible professionals to report data to a
registry as eligible professionals 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.
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 selfnomination 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
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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.
We are not finalizing our proposal to
allow eligible professionals to submit
clinical quality data extracted from
electronic health records (EHRs) for
purposes of receiving an incentive
payment for the 2009 PQRI.
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The Electronic Prescribing
(E-Prescribing) Incentive Program
It is impossible to estimate with any
degree of accuracy how many eligible
professionals will opt to participate in
the e-prescribing incentive program in
CY 2009. However, if we assume that
every eligible professional who
attempted to participate in the 2007
PQRI will also attempt to participate in
the 2009 E-Prescribing Incentive
Program, then we can estimate that
approximately 101,000 unique
individual eligible professionals will
participate in the 2009 E-Prescribing
Incentive Program.
Section II.O2. of the preamble
discusses the background of a new
incentive program that is available to
eligible professionals in addition to the
PQRI. This incentive program is known
as the e-prescribing incentive program.
Section II.O2. of the preamble provides
information on how eligible
professionals can qualify to be
considered a successful electronic
prescriber in 2009 in order to earn an
incentive payment. Similar to the PQRI,
the e-prescribing incentive program is a
voluntary initiative. Eligible
professionals may choose whether to
participate and, to the extent they meet
(1) certain thresholds with respect to the
volume of covered professional services
furnished and (2) the criteria to be
considered a successful electronic
prescriber described in section II.O2. of
this final rule with comment period,
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they can qualify to receive an incentive
payment.
Similar to claims-based reporting for
the PQRI, we estimate the burden
associated with the requirements of this
new incentive program is the time and
effort associated with eligible
professionals determining whether the
quality measure is applicable to them,
gathering the required information,
selecting the appropriate quality data
codes, and including the appropriate
quality data codes on the claims they
submit for payment. Since the eprescribing program consists of only 1
quality measure, we will assign 1 hour
as the amount of time needed for
eligible professionals to review the eprescribing measure and incorporate the
use of quality data codes into the office
work flows. At an average cost of
approximately $50 per hour, we
estimate the total cost to eligible
professionals for reviewing the eprescribing measure and incorporating
the use of quality data codes into the
office work flows to be approximately
$50 ($50 per hour × 1 hour).
The quality-data codes will be
collected 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. Based on our experience
with the PVRP described above, we
estimate that the time needed to perform
all the steps necessary to report the eprescribing measure to be 1.75 minutes.
We also estimate the cost to perform all
the steps necessary to report the eprescribing measure to be $0.90 based
on the experience with the PVRP
described above.
The total estimated annual burden for
this requirement will also vary along
with the volume of claims on which
quality data is reported. Based on
preliminary results from the 2007 PQRI
described above and the fact that the
measure’s denominator consists of only
billing codes for professional services,
we estimate that each eligible
professional reports the quality data on
60 cases for the e-prescribing measure.
Therefore, we estimate the total
annual burden per eligible professional
associated with claims-based reporting
of the e-prescribing measure to be 165
minutes, or 2.75 hours [(1.75 minutes
per measure × 1 measure × 60 cases per
measure) + 1 hour]. The total estimated
cost per eligible professional to report
the e-prescribing measure is estimated
to be $104 [($0.90 per measure × 1
measure × 60 cases per measure) + $50].
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If you choose to comment on these
information collection and record
keeping requirements, please mail
copies directly to the following:
Centers for Medicare & Medicaid
Services, Office of Strategic
Operations and Regulatory Affairs,
Division of Regulations Development,
Attn.: William Parham, CMS–1403–
FC, Room C5–14–03, 7500 Security
Boulevard, Baltimore, MD 21244–
1850.
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10235, New Executive
Office Building, Washington, DC
20503, Attn: CMS Desk Officer, CMS–
1403–FC, Fax (202) 395–6974.
XV. 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.
XVI. Regulatory Impact Analysis
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,
directs agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). A regulatory impact analysis
(RIA) must be prepared for major rules
with economically significant effects
($100 million or more in any 1 year). As
indicated in more detail below in this
regulatory impact analysis, we estimate
that the PFS provisions included in this
final rule with comment period will
redistribute more than $100 million in
1 year. Therefore, we estimate that this
rulemaking is ‘‘economically
significant’’ as measured by the $100
million threshold, and hence also a
major rule under the Congressional
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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 $7 million to $34.5 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 $7 million or less
based on SBA size standards.
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.
For purposes of the RFA,
approximately 85 percent of suppliers of
durable medical equipment, prosthetics,
orthotics and supplies (DMEPOS) are
considered small businesses according
to the Small Business Administration’s
(SBA) size standards. We estimate that
approximately 66,000 entities bill
Medicare for DMEPOS each year. Total
annual estimated Medicare revenues for
DMEPOS suppliers are approximately
$10.8 billion in 2007 for which $8.3
billion was for fee-for-service and $2.5
billion was for managed care. However
the therapeutic shoe, oxygen and
oxygen equipment, and low vision aids
provisions in this rule do not have a
significant economic impact on a
substantial number of small entities. In
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the case of therapeutic shoes, the
regulation is being updated to reflect the
fact that fee schedules were
implemented on January 1, 2005, in
accordance with the requirements of
MMA section 627. Since the fees
themselves are not impacted by this
change, suppliers are likewise not
impacted by this change. In the case of
oxygen and oxygen equipment, as
explained in section S.9. below, it is
difficult to estimate the impact of
section 144(b) of the MIPPA on small
entities and oxygen and oxygen
equipment suppliers in general.
Nevertheless, we do believe that the net
impact on small entities and other
suppliers of oxygen and oxygen
equipment will be positive rather than
negative. This is based on the fact that
this change allows suppliers to retain
ownership of oxygen equipment in all
cases when it is no longer needed by the
beneficiary. Prior to this change,
suppliers were required to relinquish
ownership of oxygen equipment after 36
continuous rental months. While
suppliers will be required to continue
furnishing the equipment after the 36month rental period for up to 2
additional years in some cases until the
5 year reasonable useful lifetime of the
equipment ends, they will retain
ownership of equipment when it is no
longer needed and can furnish the
equipment to other patients. Although
suppliers will not be paid for nonroutine maintenance or repair of oxygen
equipment they own and furnish to
Medicare beneficiaries, the equipment
itself is very dependable and requires
very little maintenance and servicing, so
this change should not significantly
impact suppliers. As previously noted,
approximately 78 percent of Medicare
beneficiaries that need oxygen do not
use the oxygen equipment for more than
36 months. The changes mandated by
section 144(b) of the MIPPA will have
no impact on suppliers or beneficiaries
in these cases.
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.
Ambulance providers and suppliers for
purposes of the RFA are also considered
to be small entities.
In addition, most ESRD facilities are
considered small entities for purposes of
the RFA, either based on nonprofit
status or by having revenues of $7
million to $34.5 million or less in any
year. We consider a substantial number
PO 00000
Frm 00194
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Sfmt 4700
of entities to be significantly affected if
the final rule with comment period has
an annual average impact on small
entities of 3 to 5 percent or more. 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 changes to
payment for renal dialysis services
included in this final rule with
comment period for nonprofit facilities
will have a 0.7 percent decrease in
overall payments relative to current
overall payments. The majority of ESRD
facilities will 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
XVI.F. of this final rule with comment
period 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 rule constitutes our
final regulatory flexibility analysis for
the remaining provisions and addresses
comments received on these issues.
Section 1102(b) of the Act requires us
to prepare a regulatory impact analysis
if a rule may have a significant impact
on the operations of a substantial
number of small rural hospitals. This
analysis must conform to the provisions
of section 604 of the RFA. For purposes
of section 1102(b) of the Act, we define
a small rural hospital as a hospital that
is located outside a metropolitan
statistical area and has fewer than 100
beds. We have determined that this final
rule with comment period will have
minimal impact on small hospitals
located in rural areas. Of the 196
hospital-based 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 final rule with comment
period will not mandate any
requirements for State, local, or tribal
governments. Medicare beneficiaries are
considered to be part of the private
E:\FR\FM\19NOR2.SGM
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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 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 e-prescribing 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. Section
1860D–4(e)(5) provides:
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.
For the reasons given above, we have
determined that States would not incur
any direct costs as a result of this 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 the objectives
of the Federal statute, and to meet
certain other conditions. We believe
that, taken as a whole, this final rule
with comment period 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 final
rule with comment period; details the
costs and benefits of the rule; analyzes
alternatives; and presents the measures
we will use to minimize the burden on
small entities. As indicated elsewhere in
this rule, we are implementing 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 final rule with
comment period. We are unaware of any
relevant Federal rules that duplicate,
overlap, or conflict with this final rule
with comment period. The relevant
sections of this 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 BN.
Section 133(b) of the MIPPA requires
an alternative application of the BN
adjustment that resulted from the 5-Year
Review of Work RVUs. The 0.8806
percent BN adjustment that is currently
being applied to the work RVUs will be
removed from the work RVUs and
applied to the physician CF (See the CY
2008 PFS final rule with comment
period (72 FR 66389) for further
discussion of the BN adjustment that
resulted from the 5-Year Review of
Work RVUs). See sections III.E. and VII.
of this final rule with comment period
for more information on the provisions
of section 133(b) of the MIPPA. The
effect of this change on selected
procedures is shown in Table 50.
Table 47 shows the specialty-level
impact of the work and PE RVU
changes.
Our estimates of changes in Medicare
revenues for PFS services compare
69919
payment rates for CY 2008 with
payment rates for CY 2009 using CY
2007 Medicare utilization for all years.
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 47. 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 47 shows only the payment
impact on PFS services. The following
is an explanation of the information
represented in Table 47.
• 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 furnished by
physicians, practitioners, or suppliers
within a specialty to arrive at the total
allowed charges for the specialty.
• Impact of Work RVU Changes for
any new or revised CY 2009 PFS
services.
• 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.
• Combined impact of the work RVUs
and PE RVUs for both 2009 and the fully
implemented 2010 PE RVUs.
cprice-sewell on PROD1PC64 with RULES_2
TABLE 47—COMBINED TOTAL ALLOWED CHARGE IMPACT FOR WORK AND PRACTICE EXPENSE RVU CHANGES
Allowed
charges (mil)
Specialty
Impact of
work RVU
changes
2009 (PE
trans. year
3) (percent)
2009
(percent)
1
2
3
TOTAL ....................................................................
ALLERGY/IMMUNOLOGY .....................................
ANESTHESIOLOGY ..............................................
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1,966
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0
0
0
Sfmt 4700
Impact of PE RVU
changes
0
1
¥1
E:\FR\FM\19NOR2.SGM
Combined impact of PE
and work changes *
2010 (PE
full implement.)
(percent)
0
2
¥1
19NOR2
2009 (PE
trans. year
3) (percent)
0
1
¥1
2010 (PE
full implement.)
(percent)
0
2
¥1
69920
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 47—COMBINED TOTAL ALLOWED CHARGE IMPACT FOR WORK AND PRACTICE EXPENSE RVU CHANGES—
Continued
Allowed
charges (mil)
Specialty
Impact of
work RVU
changes
2009 (PE
trans. year
3) (percent)
2009
(percent)
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
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 ..........................
400
7,775
136
224
2,557
2,451
385
5,354
1,883
842
2,408
175
88
2,019
561
10,662
228
1,840
1,489
620
79
654
5,026
3,454
984
1,007
72
850
288
1,169
1,828
1,854
5,554
521
431
2,146
685
33
768
571
378
846
963
867
38
1,772
711
1,727
1,186
878
87
Impact of PE RVU
changes
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
¥1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
¥2
1
0
2
0
0
0
2
0
0
0
¥1
¥1
1
0
¥1
¥1
0
0
¥1
0
0
0
¥1
0
1
0
0
1
1
¥1
0
0
0
0
0
¥10
¥1
¥2
¥2
0
1
0
1
2
0
1
¥2
5
2
2010 (PE
full implement.)
(percent)
Combined impact of PE
and work changes *
2009 (PE
trans. year
3) (percent)
0
¥3
1
0
5
0
0
1
3
0
1
1
¥2
¥1
2
0
¥1
¥2
0
¥1
¥2
0
0
0
¥1
0
1
¥1
1
1
1
¥2
1
¥1
0
0
0
¥20
¥1
¥4
¥3
0
1
0
2
4
1
3
¥4
9
4
0
¥2
0
0
2
0
0
0
2
0
1
0
¥1
¥1
1
0
¥1
¥1
0
¥1
¥1
0
0
0
¥1
0
1
0
0
1
1
¥1
0
0
0
0
0
¥9
¥1
¥2
¥1
0
1
0
1
2
0
1
¥2
5
2
2010 (PE
full implement.)
(percent)
0
¥4
1
0
5
0
0
1
3
0
1
1
¥2
¥1
2
0
¥2
¥2
0
¥2
¥1
¥1
0
¥1
¥1
0
1
¥1
1
1
1
¥2
1
¥1
0
0
0
¥19
¥1
¥3
¥3
0
1
0
2
4
1
2
¥4
10
4
* Components may not sum to total due to rounding.
cprice-sewell on PROD1PC64 with RULES_2
2. Adjustments for Payments for
Imaging Services
Section 1848(c)(2)(B)(iv)(II) of the Act
as added by 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 PFS imaging
services from the PFS BN requirement.
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We estimate that the combined impact
of the current BN exemptions instituted
by such section, the addition of 4 new
codes and the removal of 2 codes from
the list of services subject to the DRA
OPPS cap (See section V. G. Additional
Coding Issues), and the payment
revisions to OPPS cap amounts would
result in no measurable changes in the
PO 00000
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Fmt 4701
Sfmt 4700
specialty specific impacts of the DRA
provisions.
3. Combined Impact
Table 48 shows the specialty-level
impact of the work and PE RVU
changes, the impact of the MIPPA
provision to apply the BN adjustment to
the CF, the MIPPA provision for a 1.1
E:\FR\FM\19NOR2.SGM
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
percent increase to the CF, and the
combined impact of all of these changes.
Additionally, the impacts in this final
rule with comment period rule reflect
the use of the updated physician time
data from the AMA–RUC, that is, used
in step 13 of the detailed description of
the PE methodology described in
section II.A.1.i. of this final rule with
comment period.
As indicated in Table 48, our
estimates of changes in Medicare
revenues for PFS services compare
payment rates for CY 2008 with
payment rates for CY 2009 using CY
2007 Medicare utilization crosswalked
to 2009 services. To the extent that there
are year-to-year changes in the volume
and mix of services furnished by
physicians, the actual impact on total
Medicare revenues will be different than
those shown in Table 48. These
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 furnishes.
Table 48 shows only the payment
impact on PFS services. The following
is an explanation of the information
represented in Table 48.
• Specialty: The physician specialty
or type of practitioner/supplier.
• Allowed Charges: Allowed charges
are the Medicare Fee Schedule amounts
for covered services and include
coinsurances and deductibles (which
are the financial responsibility of the
beneficiary.) These amounts have been
summed across all services furnished by
physicians, practitioners, or suppliers
69921
within a specialty to arrive at the total
allowed charges for the specialty.
• Impact of the CY 2009 Work and PE
RVU changes using the methodology
finalized in the CY 2007 PFS final rule
with comment period and the revised
data sources discussed in this final rule
with comment period.
• Impact of section 133(b) of the
MIPPA which applies the BN
adjustment resulting from the 5-Year
Review of work RVUs to the physician
CF rather than to the work RVUs.
• Impact of section 131(a)(1) of the
MIPPA which provides for a 1.1 update
to the Medicare PFS CF.
• Combined impact of the finalized
work and PE RVUs, section 133(b) of the
MIPPA, and section 131(a)(1) of the
MIPPA.
TABLE 48—COMBINED CY 2009 TOTAL ALLOWED CHARGE IMPACT FOR WORK RVU CHANGES, PRACTICE EXPENSE
CHANGES, AND MIPPA CHANGES
Allowed
Charges (mil)
cprice-sewell on PROD1PC64 with RULES_2
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
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 ...........................................................
OTOLARNGOLOGY .....................................................................
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 ......................................................
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$81,669
184
1,966
400
7,775
136
224
2,557
2,451
385
5,354
1,883
842
2,408
175
88
2,019
561
10,662
228
1,840
1,489
620
79
654
5,026
3,454
984
1,007
72
850
288
1,169
1,828
1,854
5,554
521
431
2,146
685
33
768
571
378
Sfmt 4700
Work and
PE RVU
Changes *
(percent)
0
1
¥1
0
¥2
0
0
2
0
0
0
2
0
1
0
¥1
¥1
1
0
¥1
¥1
0
¥1
¥1
0
0
0
¥1
0
1
0
0
1
1
¥1
0
0
0
0
0
¥9
¥1
¥2
¥1
E:\FR\FM\19NOR2.SGM
MIPPA
133(b) **
(percent)
0
¥3
3
1
¥1
1
2
¥2
3
0
0
1
0
1
2
¥1
¥2
2
1
0
1
0
0
¥2
0
0
0
¥1
0
0
1
0
2
1
¥3
¥1
¥1
1
¥1
¥1
¥2
2
3
3
19NOR2
MIPPA 131
Update
(percent)
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Total ***
(percent)
1
¥1
3
2
¥2
2
3
1
4
2
2
3
2
3
3
¥1
¥1
4
2
0
2
1
0
¥1
0
0
0
¥1
1
2
1
1
4
3
¥3
0
¥1
2
0
1
¥10
2
2
3
69922
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 48—COMBINED CY 2009 TOTAL ALLOWED CHARGE IMPACT FOR WORK RVU CHANGES, PRACTICE EXPENSE
CHANGES, AND MIPPA CHANGES—Continued
Allowed
Charges (mil)
Specialty
45
46
47
48
49
50
51
52
53
54
NURSE ANESTHETIST ...............................................................
NURSE PRACTITIONER .............................................................
OPTOMETRY ...............................................................................
ORAL/MAXILLOFACIAL SURGERY ............................................
PHYSICAL/OCCUPATIONAL THERAPY ....................................
PHYSICIAN ASSISTANT .............................................................
PODIATRY ...................................................................................
DIAGNOSTIC TESTING FACILITY .............................................
INDEPENDENT LABORATORY ..................................................
PORTABLE X-RAY SUPPLIER ...................................................
Work and
PE RVU
Changes *
(percent)
846
963
867
38
1,772
711
1,727
1,186
878
87
MIPPA
133(b) **
(percent)
0
1
0
1
2
0
1
¥2
5
2
MIPPA 131
Update
(percent)
4
1
¥1
¥1
0
1
¥1
¥5
¥4
¥4
1
1
1
1
1
1
1
1
1
1
Total ***
(percent)
5
3
0
1
3
2
1
¥6
2
¥2
* PE changes are CY 2009 third year transition changes. For fully implemented CY 2010 PE changes, see Table 1.
** Prior to the application of the OPPS imaging caps under DRA 5102.
*** Components may not sum to total due to rounding.
We received comments from
individuals and organizations
concerning the impact of the proposed
rule, which reflected the projected
negative update. These commenters
stated that the proposed cuts in
payment for services, particularly those
for interventional pain management,
could have a devastating impact on their
ability to provide services to Medicare
beneficiaries. The commenters also
expressed concern that the current PE
payment methodology does not
accurately reflect the costs needed to
provide their services.
As discussed in sections III. and VII.
of this final rule with comment period,
section 131(a) of the MIPPA provides
that the update to the single CF for CY
2009 shall be 1.1 percent. Tables 47 and
48 reflect this change. As required by
the statute, payment under the PFS is
resource-based. In future rulemaking,
we expect to include improvements to
the resource-based PE methodology that
will include more current specialty
specific aggregate cost data obtained
through physician specialty practice
surveys.
Table 49 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 furnished 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 final rule with
comment period.
TABLE 49—IMPACT OF FINAL RULE WITH COMMENT PERIOD AND ESTIMATED PHYSICIAN UPDATE ON 2009 PAYMENT FOR
SELECTED PROCEDURES
Facility
CPT/HCPCS
MOD
Description
cprice-sewell on PROD1PC64 with RULES_2
2008
11721
17000
27130
27244
27447
33533
35301
43239
66821
66984
67210
71010
71010
77056
77056
77057
77057
77427
78465
88305
90801
90862
90935
92012
92014
92980
93000
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
VerDate Aug<31>2005
........
........
........
........
........
........
........
........
........
........
........
........
26
........
26
........
26
........
26
26
........
........
........
........
........
........
........
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 .............
Electrocardiogram, complete .......
15:01 Nov 18, 2008
Jkt 217001
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Frm 00198
2009
$27.42
46.47
1,336.09
1,077.10
1,435.12
1,854.84
1,045.11
156.92
249.47
626.15
545.79
NA
8.76
NA
41.90
NA
33.90
177.10
74.27
36.18
125.31
43.80
65.13
43.04
66.27
806.30
23.23
$27.77
48.69
1,359.71
1,144.39
1,456.37
1,892.05
1,067.93
165.55
251.38
638.74
561.56
NA
9.02
NA
44.36
NA
35.71
188.27
78.99
37.15
128.04
45.08
66.36
45.80
70.33
847.93
20.92
Fmt 4701
Sfmt 4700
Non-facility
Percent
change
1
5
2
6
1
2
2
5
1
2
3
NA
3
NA
6
NA
5
6
6
3
2
3
2
6
6
5
¥10
E:\FR\FM\19NOR2.SGM
2008
$39.61
67.41
NA
NA
NA
NA
NA
329.07
266.23
NA
567.88
25.52
8.76
104.74
41.90
82.65
33.90
177.10
74.27
36.18
147.02
52.18
NA
70.08
101.69
NA
23.23
19NOR2
2009
$40.39
69.97
NA
NA
NA
NA
NA
323.16
266.53
NA
580.67
24.16
9.02
107.48
44.36
81.15
35.71
188.27
78.99
37.15
152.92
55.18
NA
70.69
103.15
NA
20.92
Percent
change
2
4
NA
NA
NA
NA
NA
¥2
0
NA
2
¥5
3
3
6
¥2
5
6
6
3
4
6
NA
1
1
NA
¥10
69923
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 49—IMPACT OF FINAL RULE WITH COMMENT PERIOD AND ESTIMATED PHYSICIAN UPDATE ON 2009 PAYMENT FOR
SELECTED PROCEDURES—Continued
Facility
CPT/HCPCS
MOD
2008
93010 .....................
93015 .....................
93307 .....................
93510 .....................
98941 .....................
99203 .....................
99213 .....................
99214 .....................
99222 .....................
99223 .....................
99231 .....................
99232 .....................
99233 .....................
99236 .....................
99239 .....................
99243 .....................
99244 .....................
99253 .....................
99254 .....................
99283 .....................
99284 .....................
99291 .....................
99292 .....................
99348 .....................
99350 .....................
G0008 ....................
........
........
26
26
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
........
Non-facility
Description
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, addtl 30 min ...........
Home visit, est patient .................
Home visit, est patient .................
Admin influenza virus vac ...........
Table 50 illustrates, for selected
commonly provided procedures, how
the payment amounts are affected solely
by the requirement in section 133(b) of
the MIPPA that BN for the 5-Year
Review of physician work be applied to
the CF instead of through a separate
work adjustor. While section 133(b) of
the MIPPA does not increase or decrease
expenditures in the aggregate for
physician services, it will have a
differential effect on services depending
on the proportion of the PFS payment
that is accounted for by work, PE, and
malpractice. Physician work accounts
for—on average across all PFS
services—52.5 percent of total work
RVUs. As BN for the 5-Year Review is
being moved from the physician work
RVUs only to the total payment, any
service that has a higher than average
proportion of its total payment
Percent
change
2009
8.38
103.98
47.23
241.09
28.57
65.51
41.90
65.51
116.93
171.77
35.42
63.22
90.65
200.34
92.93
92.93
145.49
108.55
156.54
59.03
108.93
204.15
102.45
NA
NA
NA
9.02
100.27
49.77
248.86
30.30
68.17
44.72
69.25
122.63
180.33
37.15
66.72
95.58
207.38
96.30
97.38
154.00
114.69
165.55
61.31
114.33
212.07
106.04
NA
NA
NA
accounted for by physician work will
see its total payment increase solely as
a result of section 133(b) of the MIPPA.
Conversely, any service where
physician work accounts for a lower
than average proportion of its total
payment, section 133(b) of the MIPPA
will result in a reduction in payment.
Thus, section 133(b) of the MIPPA
results in a payment reduction of 5
percent to CPT code 78565, Heart
Image, 3d, Multiple, for the global
service and 6 percent for the TC only.
Physician work is 11 percent of the total
RVU for the global and 0 percent of the
TC of this service. These percentages are
less than the 52.5 percent on average
that is attributed to physician work and
explains why payment for these services
declines as a result of section 133(b) of
the MIPPA. Similarly, the nonfacility
amount for CPT code 99213 (Office/
2008
8
¥4
5
3
6
4
7
6
5
5
5
6
5
4
4
5
6
6
6
4
5
4
3
NA
NA
NA
8.38
103.98
47.23
241.09
33.14
91.03
59.80
89.89
NA
NA
NA
NA
NA
NA
NA
122.26
179.01
NA
NA
NA
NA
250.99
111.98
76.17
155.78
20.57
2009
Percent
change
9.02
100.27
49.77
248.86
33.90
91.97
61.31
92.33
NA
NA
NA
NA
NA
NA
NA
124.79
184.30
NA
NA
NA
NA
253.91
114.69
79.35
160.86
20.92
8
¥4
5
3
2
1
3
3
NA
NA
NA
NA
NA
NA
NA
2
3
NA
NA
NA
NA
1
2
4
3
2
outpatient visit, est) increases by 0.5
percent because its work RVUs are a
slightly higher proportion of its total
payment (54 percent) than the 52.5
percent average for all physician
services while the facility amount
increases even more because its work
RVUs as a percent of total RVUs (74
percent) are significantly higher than
the proportion on average for all
physician services. A hospital visit (CPT
code 99223) and an emergency
department visit (CPT code 99285) also
show higher increases in payment (3
and 4 percent respectively) due to
section 133(b) of the MIPPA because
physician work RVUs also account for a
higher proportion of the total RVUs (76
and 80 percent respectively) than the
average for all physician services.
TABLE 50—CY 2009 IMPACT OF PLACING BUDGET NEUTRALITY ADJUSTMENT ON THE CONVERSION FACTOR
[Section 133(b) of the MIPPA]
cprice-sewell on PROD1PC64 with RULES_2
78465
78465
99213
99213
99223
..............
..............
..............
..............
..............
VerDate Aug<31>2005
Physician
work as a
% of total
RVUs
Mod
CPT/HCPCS
Description
Facility or
nonfacility
...........
TC .....
...........
...........
...........
Heart image (3d), multiple .........................
Heart image (3d), multiple .........................
Office/outpatient visit, est ..........................
Office/outpatient visit, est ..........................
Initial hospital care ....................................
Nonfacility .....
Nonfacility .....
Nonfacility .....
Facility ..........
Facility ..........
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2009 BN on
work RVU
11
0
54
74
76
E:\FR\FM\19NOR2.SGM
$509.48
432.18
60.98
43.34
174.43
19NOR2
2009 BN
on CF
$485.46
406.47
61.26
44.69
180.33
Percent
change
¥5
¥6
0.5
3
3
69924
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
TABLE 50—CY 2009 IMPACT OF PLACING BUDGET NEUTRALITY ADJUSTMENT ON THE CONVERSION FACTOR—Continued
[Section 133(b) of the MIPPA]
Physician
work as a
% of total
RVUs
CPT/HCPCS
Mod
Description
Facility or
nonfacility
99285 ..............
...........
Emergency dept visit .................................
Facility ..........
B. Telehealth
In section II.D. of this final rule with
comment period, we are creating 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 will 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
service list will enable more
beneficiaries access to these services, we
do not anticipate that this change will
have a significant budgetary impact on
the Medicare program.
C. Payment for Covered Outpatient
Drugs and Biologicals
1. ASP Issues
The changes discussed in section
II.F.1. of this final rule with comment
period with respect to payment for
covered outpatient drugs and
biologicals, are estimated to have no
impact on Medicare expenditures.
cprice-sewell on PROD1PC64 with RULES_2
2. CAP Issues
In the CY 2009 PFS proposed rule, we
proposed minor refinements for the
CAP, specifically the annual CAP
payment amount update mechanism,
the definition of a CAP physician,
easing the restriction on the
transportation of CAP drugs between
practice locations, and the dispute
resolution process. After the publication
of the CY 2009 PFS proposed rule,
further CAP implementation for 2009
was postponed. At this time, we are
seeking feedback about the CAP from
VerDate Aug<31>2005
15:01 Nov 18, 2008
Jkt 217001
current and former CAP physicians,
potential vendors, and other interested
parties. We will assess the information
and consider implementing changes to
the CAP before proceeding with another
bid solicitation.
Our proposed refinements to the CAP
are not being finalized in this rule.
Therefore, there is no potential impact
associated with CAP provisions in the
CY 2009 PFS rule.
D. Application of the HPSA Bonus
Payment
As discussed in section II.G. of this
final rule with comment period, 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 a
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 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 are
discussed in section II.H. of this final
rule with comment period. To
understand the impact of the 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 final rule with comment period.
To estimate the impact among various
classes of ESRD facilities, it is
imperative that the estimates of current
payments and payments contain similar
inputs. Therefore, we simulated
payments only for those ESRD facilities
that we are able to calculate both
current 2008 payments and 2009
payments.
PO 00000
Frm 00200
Fmt 4701
Sfmt 4700
2009 BN on
work RVU
80
163.99
2009 BN
on CF
170.60
Percent
change
4
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 June 2008 update of CY 2007
National Claims History file as a basis
for Medicare dialysis treatments and
separately billable drugs and
biologicals. Due to data limitations, we
are unable to estimate current and
proposed payments for 96 of the 4954
ESRD facilities that bill for ESRD
dialysis treatments.
Table 51 shows the impact of this
year’s changes to CY 2009 payments to
hospital-based and independent ESRD
facilities. The first column of Table 51
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
all changes to the ESRD wage index for
CY 2009 as it affects the composite rate
payments to ESRD facilities. The fourth
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 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 impacts
are similar to those shown in the
proposed rule. (See the CY 2009 PFS
proposed rule (73 FR 38599) for a
E:\FR\FM\19NOR2.SGM
19NOR2
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
breakout of the effects associated with
the change in the wage index floor.)
The fifth column shows the effect of
the MIPPA provisions on hospital-based
and independent ESRD facilities.
Section 153(a) of the MIPPA updated
section 1881(b)(12)(G) of the Act and
revised payments to ESRD facilities. The
revisions that are effective January 1,
2009 include an update of 1 percent to
the composite rate component of the
payment system and the establishment
of a site neutral composite rate to
hospital-based and independent dialysis
facilities.
The sixth column shows the overall
effect of the changes in the composite
rate payments to ESRD providers
excluding the drug add-on. This column
shows the percent change between CY
2009 and CY 2008 composite rate
payments to ESRD facilities. The sixth
column combines the effects of changes
in the wage index (column 4) with the
effect of the MIPPA provisions (column
5). This column does not include the
drug add-on to the composite rate.
The seventh column shows the
overall effect of the changes in
composite rate payments to ESRD
providers including the drug add-on.
The overall effect is measured as the
difference between the 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 payment
is the transition year 4 wage-adjusted
composite rate for each provider (with
the 15.2 percent drug add-on) times
dialysis treatments from CY 2007
claims. The CY 2008 current payment is
the transition year 3 wage-adjusted
composite rate for each provider (with
the current 15.2 percent drug add-on)
times dialysis treatments from CY 2007
claims.
69925
The overall impact to ESRD providers
in aggregate is 0.4 percent. Most ESRD
facilities will see an increase in
payments as a result of the MIPPA
provisions. However, the site neutral
composite rate results in a 2.1 percent
decrease in payments to hospital-based
ESRD facilities. Since many hospitalbased ESRD facilities are nonprofit,
there is a 0.7 percent decrease in
payments to all nonprofit ESRD
facilities.
While the MIPPA provision includes
a 1 percent increase to the ESRD
composite rate, this 1 percent increase
does not apply to the drug add-on to the
composite rate. For this reason, the
impact of all changes in this final rule
is a 0.4 percent increase for all ESRD
providers. Overall, payments to
independent ESRD facilities will
increase by 0.7 percent and payments to
hospital-based ESRD facilities will
decrease 2.1 percent.
TABLE 51—IMPACT OF CY 2009 CHANGES IN PAYMENTS TO HOSPITAL-BASED AND INDEPENDENT ESRD FACILITIES
[Percent change in composite rate payments to ESRD facilities (both program and beneficiaries)]
1
2
3
4
5
6
7
Number of
facilities
Number of
dialysis
treatments
(in millions)
Effect of
changes in
wage
index 1
Effect of the
MIPPA provisions
only 2
Overall effect without
drug addon 3
Overall effect including drug
add-on 4
4,858
4,303
555
36.4
32.8
3.7
0.0
0.0
0.2
0.7
1.0
¥2.1
0.7
1.0
¥1.9
0.4
0.7
¥2.1
1,732
1,915
1,211
5.0
13.9
17.6
¥0.1
0.0
0.0
0.6
0.8
0.6
0.5
0.8
0.6
0.2
0.5
0.4
3,932
926
29.8
6.6
0.0
0.2
1.0
¥0.7
0.9
¥0.5
0.7
¥0.7
1,320
3,538
7.6
28.8
¥0.5
0.1
0.6
0.7
0.1
0.8
¥0.1
0.5
154
566
768
372
1104
379
667
259
555
34
1.2
4.6
5.8
2.0
8.3
2.7
5.2
1.6
4.6
0.4
1.2
0.1
¥1.0
0.0
¥0.1
¥1.0
¥0.5
0.0
2.2
¥4.6
0.5
0.2
0.6
0.3
0.8
0.9
0.9
0.7
0.8
0.8
1.8
0.3
¥0.4
0.3
0.8
0.0
0.3
0.7
3.0
¥3.8
1.5
0.0
¥0.7
0.0
0.5
¥0.3
0.1
0.5
2.7
¥4.1
cprice-sewell on PROD1PC64 with RULES_2
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 .........................................................................
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 & Virgin Islands ....................................
1 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 CY 2009 wage index changes. This column does not include the drug add-on to the
composite rate.
2 This column shows the effect of the MIPPA provisions which include a 1 percent increase to composite rate and elimination of separate composite rate for hospital-based ESRD providers. These provisions are effective January 1, 2009. This column does not include the drug add-on to
the composite rate.
3 This column shows the percent change between CY 2009 and CY 2008 composite rate payments to ESRD facilities. This column does not
include the drug add-on to the composite rate.
4 This column shows the percent change between CY 2009 and CY 2008 composite rate payments to ESRD facilities. The CY 2009 payments
include the CY 2009 wage adjusted composite rate, and the 15.2 percent drug add-on times treatments. The CY 2008 payments to ESRD facilities includes the CY 2008 wage adjusted composite rate and the 15.5 percent drug add-on times treatments.
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G. IDTF Issues
We believe that the provisions
regarding IDTFs as discussed in Section
II.I. of this final rule with comment
period will have minimal budgetary
impact. We believe that the IDTF
enrollment provisions contained in this
rule are necessary and will help ensure
that beneficiaries receive quality care by
making certain that those entities
providing mobile diagnostic testing
services meet established performance
standards and are enrolled in the
Medicare program as IDTFs. We
maintain that most of these mobile units
providing diagnostic testing services are
already enrolled as IDTFs as required in
§ 410.33(g), however we have no way of
determining how many of these units
are providing mobile diagnostic testing
services, yet are not enrolled. We do not
believe that beneficiary access to IDTF
services will be affected by these
requiring mobile units providing
diagnostic testing services to enroll in
the Medicare program.
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H. Physician and Nonphysician
Practitioner Enrollment Issues
We believe that the provisions
regarding physicians, NPPs, and
physician and NPP organizations as
discussed in section II.J. of this final
rule with comment period will have
minimal budgetary impact. The
provisions of this final rule supplement,
but do not replace or nullify, existing
regulations concerning the issuance of
physician and NPP billing privileges,
and payment for Medicare covered
items or services to eligible physicians
and NPPs. We have already increased
our efforts to seek more uniformity in
the enrollment process. However, our
experience clearly shows that the best
means for preventing payment errors
and, in worst cases, abuse by providers
and suppliers, is to discourage and
prevent their entry into the Medicare
program. While some individuals and
organizations may perceive our
requirements as a barrier to their access
to serving Medicare beneficiaries, we do
not believe that bona fide physicians,
NPP, or physician or NPP organizations
will experience any difficulty in
obtaining or maintaining Medicare
billing privileges.
We expect this final rule with
comment period to ensure that the
Medicare program has adequate
information on those who seek to bill
the program for items or services. The
primary goal of this provision of the
final rule with comment period, through
standard enrollment requirements is to
allow us to collect and maintain (keep
current) a unique and equal data set on
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all current and future physicians, NPPs,
and physician and NPP organizations
that are billing or will bill the Medicare
program for items or services furnished
to Medicare beneficiaries. By achieving
this goal, we will be better positioned to
protect the Medicare Trust Funds and
the Medicare beneficiaries.
This rule will also allow us to
develop, implement, and enforce
national enrollment procedures to be
administered uniformly by all Medicare
contractors. Further, we believe that the
enrollment provisions contained in this
rule are necessary to ensure that
beneficiaries receive quality care by
making certain that the physicians,
NPPs, and physician or NPP
organizations providing care meet
established standards and are enrolled
in the Medicare program.
As a result of currently not having
quantifiable data, we cannot effectively
derive an estimate of the monetary
impacts of these provisions.
Accordingly, we sought public comment
so that the public may provide any data
available that provides a calculable
impact or any alternative to the
proposed provision. However, no
further data was presented by the public
in order to provide a calculable impact.
We adopted a modified enrollment
policy after considering the alternatives
that were suggested through the public
comment period of the regulatory
process which established the effective
date of billing privileges for newly
enrolling physicians, NPPs, and
physician and NPP organizations.
I. 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 eprescribe, that they use the standards
adopted by the Secretary for those
specific e-prescribing transactions. The
amendment to the exemption for
computer-generated faxing from the
NCPDP SCRIPT standard only affects
pharmacies that already conduct eprescribing using products that generate
facsimiles.
This amendment of the exemption for
computer-generated facsimiles to
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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 non-NCPDP SCRIPT enabled
prescribers. Prescribers that currently eprescribe 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
computer-generated facsimiles that they
used to receive. Prescribers that do not
have the capacity to use NCPDP SCRIPT
standard would continue to receive
computer-generated facsimiles.
Moreover, the amendment would not
impose costs on dispensers, as they
would be permitted to continue using
computer-generated facsimiles with
partners that cannot conduct electronic
refill request transactions using the
NCPDP SCRIPT standard. The
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 computergenerated facsimile exemption were not
modified, these dispensers would have
to revert to paper/phone calls in
instances in which a provider is not able
to accept electronic refill requests
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,
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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.9
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.10
According to industry reports in 2006
approximately 3.309 billion
prescriptions 11 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,12 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.
9 CVS/Caremark Discussion Points on E-Fax
Ruling Exceptions, January 3, 2007.
10 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.
11 https://www.statehealthfacts.org.
12 CMS, November 16, 2007 Proposed Rule, 72 FR
64913.
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Our decision to retain the exemption
for computer-generated facsimiles in all
instances other than temporary/
transient transmission failures will have
a positive impact on the industry
overall, including small pharmacies and
prescribers who are early adopters of eprescribing and who may still depend
on the use of computer-generated
facsimiles to communicate. In the CY
2009 PFS proposed rule (73 FR 38601),
we discussed the estimated losses that
could result if we moved forward with
the elimination of the computergenerated faxing exemption to the
NCPDP SCRIPT standard in all
instances other than temporary/
transient transmission failures. We
stated that two national chain
pharmacies said the proposed
elimination of the computer-generated
faxing exemption would result in a loss
to each chain of approximately $88
million in labor, lost productivity and
telecommunications costs. If this cost
was extrapolated across the entire
pharmacy industry, industry estimated
an impending pharmacy industry loss of
at least $520 million a year. As
Medicare Part D claims account for
approximately 25 percent of the total
prescriptions filled annually, we
estimated that $130 million of that $520
loss would be attributable to Medicare
Part D claims. We also considered other
alternatives, including eliminating the
exemption for computer-generated
facsimiles in all instances, with an
effective date of January 1, 2009, as
detailed in the final rule with comment
at 72 FR 66396; and eliminating the
exemption for computer-generated
facsimiles in all instances except for the
prescription refill request transaction
and in instances of temporary/transient
transmission failures. As we discussed
previously in this final rule, we decided
against imposing either of those
alternatives in light of the advantage of
the momentum that will be built by the
e-prescribing incentive program under
MIPPA, and affording the industry an
additional 3 years from the effective
date of this final rule to move toward
true e-prescribing.
J. CORF Issues
The revisions to the CORF regulations
discussed in section II.L. of this final
rule with comment period updates 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.
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K. Therapy Issues
The revisions to the therapy
regulations discussed in section II.M. of
this final rule with comment period
make technical corrections and update
the regulations and are expected to have
minimal impact on Medicare
expenditures.
L. Physician Self-Referral Provisions
We anticipate that the provisions in
section II.N. of this final rule with
comment period concerning the antimarkup provisions in § 414.50 will
result in savings to the program by
reducing overutilization and anticompetitive business arrangements. We
cannot gauge with any certainty the
extent of these savings to the Medicare
program.
M1. Physician Quality Reporting
Initiative (PQRI)
As discussed section II.O1. of this
final rule with comment period, the
final 2009 PQRI measures satisfy the
requirement of section 1848(k)(2)(B)(iii)
of the Act that the Secretary publish in
the Federal Register by November 15,
2008 a final set of quality 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.O1. of
this final rule with comment period, we
are also offering options in 2009 for
reporting some of the 2009 PQRI
measures via submission of data to a
clinical registry and options for
reporting on measures groups rather
than individual measures.
Although there may be some cost
incurred for maintaining the measures
used in the PQRI and their associated
code sets, and for expanding an existing
clinical data warehouse to accommodate
registry-based data submission for the
PQRI, we do not anticipate a significant
cost impact on the Medicare program.
Participation in the PQRI by eligible
professionals is voluntary and eligible
professionals may have different
processes for integrating the PQRI into
their practices’ work flows. Therefore, it
is not possible to estimate with any
degree of accuracy the impact of the
PQRI on providers. One factor that
influences the cost to eligible
professionals is the time and effort
associated with eligible professionals
identifying applicable PQRI quality
measures for which they can report the
necessary information. We have no way
to accurately quantify the burden
because it would vary with each eligible
professional by the number of measures
applicable to the eligible professional,
the eligible professional’s familiarity
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and understanding of the PQRI, and
experience with participating in the
PQRI. In addition, eligible professionals
may employ different methods for
incorporating the use of quality data
codes into the office work flows.
Therefore, we will assign 3 hours as the
amount of time needed for eligible
professionals to review the PQRI quality
measures, identify the applicable
measures for which they can report the
necessary information, and incorporate
the use of quality data codes into the
office work flows. Information from the
Physician Voluntary Reporting Program
(PVRP) indicated an average labor cost
of approximately $50 per hour. Thus,
we estimate the cost for an eligible
professional to review the PQRI quality
measures, identify the applicable
measures for which they can report the
necessary information, and incorporate
the use of quality data codes into the
office work flows to be approximately
$150 per eligible professional ($50 per
hour × 3 hours).
For claims-based PQRI reporting, one
factor in the cost to eligible
professionals is the time and effort
associated with gathering the required
information, selecting the appropriate
quality data codes, and including the
appropriate quality data codes on the
claims an eligible professional submits
for payment. Information from the
PVRP, estimates the cost to physicians
to perform all the steps necessary to
report 1 quality measure ranges from
$0.21 in labor time to about $10.06 in
labor time for more complicated cases
and/or measures. For the median
practice, the cost was about $0.90 in
labor time per measure. Eligible
professionals are generally required to
report at least 3 measures to
satisfactorily report PQRI quality
measures data. Therefore, for purposes
of this impact analysis we will assume
that eligible professionals participating
in the 2009 PQRI will report an average
of 3 measures each.
The cost of implementing claimsbased reporting of PQRI quality
measures data also varies with the
volume of claims on which quality data
is reported. Preliminary results from the
2007 PQRI indicate that eligible
professionals reported on 1 to 3,331
eligible instances per measure. For all
2007 PQRI measures, the median
number of eligible instances reported on
per measure was less than 60. On
average, the median number of eligible
instances reported on per measure was
about 9. Therefore, for this analysis, we
estimate that for each measure, an
eligible professional reports the quality
data on 9 cases.
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Thus, we estimate the cost to each
eligible professional associated with
claims-based reporting of PQRI quality
data codes to range from $155.67 [($0.21
per measure × 3 measures × 9 cases per
measure) + $150] to $421.62 [($10.06
per measure × 3 measure × 9 cases per
measure) + $150].
M2. Electronic Prescribing
(E-Prescribing) Incentive Program
Section II.O2. of this final rule with
comment period describes a new
incentive program for eligible
professionals who are considered
successful electronic prescribers. To be
considered a successful electronic
prescriber, an eligible professional must
report on the e-prescribing measure
identified in section II.O2. of this final
rule with comment period.
We anticipate that the cost impact of
the E-Prescribing Incentive Program on
the Medicare program would be
minimal since the program consists of
only 1 quality measure.
Participation in the E-Prescribing
Incentive Program by eligible
professionals is voluntary and eligible
professionals may have different
processes for integrating the EPrescribing Incentive Program into their
practices’ work flows. Therefore, it is
not possible to estimate with any degree
of accuracy the impact of the EPrescribing Incentive Program on
eligible professionals. Similar to claimsbased reporting for the PQRI, one factor
in the cost to eligible professionals is
the time and effort associated with
eligible professionals determining
whether the quality measure is
applicable to them, gathering the
required information, selecting the
appropriate quality data codes, and
including the appropriate quality data
codes on the claims they submit for
payment. Since the E-Prescribing
Incentive Program consists of only 1
quality measure, we will assign 1 hour
as the amount of time needed for
eligible professionals to review the eprescribing measure and incorporate the
use of quality data codes into the office
work flows. At an average cost of
approximately $50 per hour, we
estimate the total cost to eligible
professionals for reviewing the eprescribing measure and incorporating
the use of quality data codes into the
office work flows to be approximately
$50 ($50 per hour × 1 hour).
Another factor in the cost to eligible
professionals is the time and effort
associated with gathering the required
information, selecting the appropriate
quality data codes, and including the
appropriate quality data codes on the
claims an eligible professional submits
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for payment. Information from the
PVRP, estimates the cost to physicians
to perform all the steps necessary to
report 1 quality measure ranges from
$0.21 in labor time to about $10.06 in
labor time for more complicated cases
and/or measures. For the median
practice, the cost was about $0.90 in
labor time per measure. Therefore, we
estimate the costs to eligible
professionals to perform all the steps
necessary to report the e-prescribing
measure on a claim to be approximately
$0.90.
The cost for this requirement will also
vary along with the volume of claims on
which quality data is reported. Based on
preliminary results from the 2007 PQRI
described above and the fact that the
measure’s denominator consists of only
billing codes for professional services,
we estimate that each eligible
professional reports the quality data on
60 cases for the e-prescribing measure.
Thus, we estimate the cost to each
eligible professional associated with
claims-based reporting of the eprescribing measure to be $104[($0.90
per measure × 1 measures × 60 cases per
measure) + $50].
In addition, the e-prescribing measure
requires eligible professionals to have
and use a ‘‘qualified’’ e-prescribing
system. There are currently many
commercial packages available for eprescribing. One study indicated that a
mid-range complete electronic medical
record costs $2500 per license with an
annual fee of $90 per license for
quarterly updates of the drug database
after setup costs while a standalone
prescribing, messaging, and problem list
system costs $1200 per physician per
year after setup costs. Hardware costs
and setup fees substantially add to the
final cost of any software package.
(Corley, S.T. (2003). ‘‘Electronic
prescribing: a review of costs and
benefits.’’ Topics in Health Information
Management 24(1): 29–38.). The cost to
an eligible professional of obtaining and
utilizing an e-prescribing system varies
not only by the commercial software
package selected but also by the level at
which the professional currently
employs information technology in his
or her practice and the level of training
needed.
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
changes discussed in section II.Q. of this
final rule with comment period.
However, we expect that the technical
correction to the NP qualifications will
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make the regulations comport with the
agency’s intent to require a master’s
degree in nursing as the minimum
educational level for new NPs
independently treating beneficiaries and
directly billing the Medicare program.
Also, the 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
changes discussed in section II.R. of this
final rule with comment period;
however, we expect that the revisions to
the regulations will have a positive
impact on patient care.
P. Prohibition Concerning Payment of
Continuous Positive Airway Pressure
(CPAP) Devices
The provisions discussed in section
II.S.2 of this final rule with comment
period 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 providers as the majority of
providers are not DMEPOS suppliers
who would by supplying CPAP devices.
Only providers or other entities that
perform both unattended out-of-facility
sleep testing and supply CPAP
machines to beneficiaries they have
tested will be impacted which we
believe would be very few, if any. For
the reasons listed above, this final will
have no impact on DMEPOS suppliers
because most suppliers only supply the
CPAP machines; they do not evaluate
patients, order sleep tests, nor do they
interpret them.
Q. Beneficiary Signature Requirements
for Nonemergency Ambulance Services
We believe that our proposal in
section II.S.3. of this final rule with
comment period 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, will have no
budgetary impact.
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 provision in
section II.S.5. of this final rule with
comment period 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 suppliers whose billing
privileges are revoked due to Federal
debarment or exclusion, felony
convictions, license suspensions or
revocation, or because the 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
suppliers 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 suppliers that meet the
criteria for immediate revocation, we
cannot effectively derive an estimate of
the monetary impacts of this provision.
Accordingly, we sought public comment
so that the public may provide any data
available that provides a calculable
impact or any alternative to the
proposed provision. However, no
further data was presented by the public
in order to provide a calculable impact.
S. MIPPA Provisions
1. Section 101: Improvements to
Coverage of Preventive Services
a. Section 101(a) Coverage of Additional
Preventive Services
As discussed earlier in the preamble,
section 101(a) of the MIPPA provides
the Secretary with the authority to add
coverage of ‘‘Additional Preventive
Services’’ and specifies the process and
the criteria that are to be used in followup determinations regarding the
coverage of such services under the Part
69929
B Program. As provided in the law, this
new coverage allows payment for
‘‘additional preventive services’’ not
otherwise described in Title XVIII of the
Act, if the Secretary determines through
the national coverage determination
(NCD) process that the new services
meet statutory requirements for
coverage. We estimate that the new
authority to review and add coverage of
additional preventive services, if
appropriate, will result in an increase in
Medicare payments in the next couple
of years to physician and other
providers for such services. However,
based on our experience in adding
coverage of other preventive services
(for example, the tobacco cessation
benefit) we do not expect that the
amount of the increase will be more
than a modest amount. Since MIPPA
refers to the evidence-based preventive
services recommended by the USPSTF,
costs would be aligned with the most
effective screenings, and would avoid
use of resources for those services that
are not based on available evidence of
effectiveness, thus reducing wasted
resources.
b. Section 101(b)—Revisions to Initial
Preventive Physical Examination (IPPE)
Section 101(b) of the MIPPA expands
the eligibility period for beneficiaries
using the initial preventive physical
examination (IPPE) from 6 to 12 months,
waives the Part B deductible, and makes
several other changes to the benefit such
as adding the measurement of the body
mass index (BMI) and end-of-life
planning to the list of required services.
We estimate that the expansion of these
Medicare Preventive services and the
waiver of the Part B deductible
requirement may increase the number of
covered services that are performed in
the next several years. As a result, we
expect the amendment may result in a
small but modest increase in payments
to physicians and other qualified
practitioners who provide these
examinations and for any medically
necessary follow-up (tests, counseling or
treatment) that occur as a result of the
initial preventive physical examination
as beneficiaries increase their use of the
benefit. The estimated financial impact
is shown in Table 52.
TABLE 52—MEDICARE COST ESTIMATES FOR SECTION 101(b) OF THE MIPPA
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[In millions]
MIPPA
CY 2009
CY 2010
CY 2011
CY 2012
CY 2013
Section 101(b) .........................................................................................
$5
$5
$5
$5
$5
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2. Section 131: Physician Payment,
Efficiency, and Quality Improvements;
and Section 132: Incentives for
Electronic Prescribing
A discussion of the impact of these
MIPPA provisons is addressed earlier in
this section in conjunction with the
other PQRI provisions being
implemented (see section XV.M. of this
final rule with comment period).
3. Section 131(c): Physician Resource
Use Feedback Program
Section 131(c) of the MIPPA amends
section 1848 of the Act by adding
subsection (n), which requires the
Secretary to establish and implement by
January 1, 2009, a Physician Feedback
Program using Medicare claims data and
other data to provide confidential
feedback reports to physicians (and as
determined appropriate by the
Secretary, to groups of physicians) that
measure the resources involved in
furnishing care to Medicare
beneficiaries. If determined appropriate
by the Secretary, the Secretary may also
include information on quality of care
furnished to Medicare beneficiaries by
the physician (or group of physicians) in
the reports. We anticipate the impact of
this section to be negligible for the work
completed in the phased pilot physician
feedback program to date.
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4. Section 133(b): Expanding Access to
Primary Care Services (BN Adjustment)
The impact of this MIPPA provision
is addressed in section VII. and
previously in this section (XVI.A.) as
part of the RVU impact discussion.
5. Section 134: Extension of Floor on
Medicare Work Geographic Adjustment
Under the Medicare PFS
As discussed in section III.F. of this
preamble, section 134 of the MIPPA of
2008 extended the 1.000 work GPCI
floor from July 1, 2008, through
December 31, 2009. Additionally, the
MIPPA sets a permanent 1.500 work
GPCI floor in Alaska, beginning January
1, 2009. As a result of this MIPPA
provision, 55 (out of 89) PFS localities
will receive an increase in their work
GPCI. Alaska receives the largest
increase (+47.49 percent), followed by
Puerto Rico (+10.62 percent), South
Dakota (+6.16 percent), North Dakota
(+5.60 percent) and the Missouri ‘‘rest of
state’’ locality (+5.37 percent). The
estimated impact for this provision is
$400 million for CY 2009.
6. Section 136: Extension of Treatment
of Certain
We do not have specific information
on the number of independent
laboratories that would be affected by
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section 136 of the MIPPA. We think that
most, if not, all independent
laboratories have some exposure to this
billing practice. The estimated CY 2009
incurred benefit impact of the extension
of this practice is $80 million.
7. Section 141: Extension of Exceptions
Process for Medicare Therapy Caps
Section 141 of the MIPPA extends the
exceptions process for therapy caps
from July 1, 2008, through December 31,
2009. The estimated impact of this
provision for CY 2009 is $1.69 billion.
8. Section 143: Speech-Language
Pathology Services
Amendments made by section 143 of
the MIPPA provide the authority to
enroll speech-language pathologists as
suppliers of Medicare services and for
speech-language pathologists to begin
billing Medicare for outpatient speech
language pathology services furnished
in private practice beginning July 1,
2009. The enrollment of speech
language pathologists to provide
services in outpatient settings is
expected to have a minimal impact on
Medicare expenditures.
9. Section 144(b): Repeal of Transfer of
Title for Oxygen Equipment
The revisions pertaining to oxygen
and oxygen equipment in section III.J. of
this final rule with comment period
reflect changes made by the MIPPA.
Prior to the MIPPA, section
1834(a)(5)(F) of the Act limited monthly
payments to suppliers furnishing
oxygen equipment to 36 months of
continuous use. At the end of this 36month period, suppliers were required
to transfer title to oxygen equipment
rented on or after January 1, 2006 to the
beneficiary. Section 144(b) of the
MIPPA repealed the transfer of title
provision. In its place, section 144(b)
establishes a 36-month rental cap and
amends section 1834(a)(5)(F) of the Act
by adding additional payment rules
discussed previously in this preamble.
These changes may provide an
economic benefit to suppliers because
they will now retain ownership of
oxygen equipment after 36 months of
rental payments. If a beneficiary stops
needing oxygen after the 36-month
rental cap but before the end of the
reasonable useful lifetime of the
equipment (currently 5 years), the
supplier will be able to retrieve the
equipment and rent it to another
Medicare beneficiary or other customer
and receive additional rental payments
for the remainder of the equipment’s
reasonable useful lifetime. It is difficult
to estimate the impact of this change,
but we believe the impact will be
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minimal and, therefore, do not believe
it will be economically significant.
In addition, our regulations
implementing MIPPA may provide a
slight financial benefit to Medicare
because we have determined that at this
time it is not reasonable and necessary
to make payments for non-routine
maintenance and servicing (including
repair) of supplier-owned oxygen
equipment. We understand that oxygen
equipment is very durable and should
need few repairs in the first 5 years. Any
costs suppliers may incur in repairs
would be offset by the gains they
achieve through retaining ownership of
the equipment. Taken together, we
expect these changes to have a minimal
impact on Medicare expenditures.
10. Section 145: Clinical Laboratory
Tests
Section 145 of the MIPPA reduces the
Clinical Laboratory Fee Schedule
update by 0.5 percentage points for each
year, CY 2009 through CY 2013, and is
estimated to result in an incurred
benefit savings of $40 million.
11. Section 146: Improved Access to
Ambulance Services
Section 146 of the MIPPA makes
certain changes to Medicare payment for
ambulance services. Specifically, this
section: Increases the payment rate
under the Ambulance fee schedule by 2
percent or 3 percent for ground
ambulance trips in urban and rural
areas, respectively furnished during the
period July 1, 2008 through December
31, 2009; and, for air ambulance
services furnished during the period
beginning on July 1, 2008, and ending
on December 31, 2009, any area that was
designated as a rural area for purposes
of making payments under such section
for air ambulance services furnished on
December 31, 2006, shall be treated as
a rural area for purposes of making
payments for ambulance services
furnished during such period. This
section is estimated to increase
Medicare expenditures by $20 million
for CY 2009.
12. Section 149: Adding Certain Entities
as Originating Sites for Payment of
Telehealth Services
This provision will increase access to
telehealth services through the new
authority for certain facilities to serve as
originating sites and is expected to have
a negligible budgetary impact on
Medicare expenditures.
13. Section 153: Renal Dialysis
Provisions
A discussion of the impact of section
153 of the MIPPA is addressed in
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section XV.F. of this regulatory impact
analysis in conjunction with the other
ESRD provisions of this rule.
T. Competitive Acquisition for Certain
Durable Medical Equipment,
Prosthetics, Orthotics, and Supplies
(DMEPOS)
1. Low Vision Aids
We have determined that there will be
no impact on Medicare beneficiaries,
medical equipment industry, or the
Medicare program. This final rule with
comment period clarifies a longstanding
Medicare practice of not covering low
vision aids.
2. Therapeutic Shoes Fee Schedule
The revisions to the therapeutic shoes
regulations discussed in section XI.B. of
this final rule are expected to have no
impact on Medicare expenditures. This
final rule with comment period merely
codifies in regulations our current
practice of paying for therapeutic shoes
on a fee schedule basis.
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U. Alternatives Considered
This final rule with comment period
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, responds to comments on our
proposals, presents rationale for our
decisions and, where relevant,
alternatives that were considered. For a
discussion of the sections that could
impact small entities see the following
sections: II.A.2. PE Proposals for CY
2009; II.B. GPCIs: Locality Discussion;
II.D. Medicare Telehealth Services; II.E.
Specific Coding Issues related to PFS;
II.F. Part B Drug Payment; II.G.
Application of the HPSA Bonus
Payment; II.H. Provisions Related to
Payment for Renal Dialysis Services
Furnished by ESRD Facilities; II.I. IDTF
Issues; II.J. Physician and NPP
Enrollment Issues; II.K. Amendment to
the Exemption for Computer-Generated
Facsimile Transmission from the
NCPDP SCRIPT Standard for
Transmitting Prescription and Certain
Prescription-Related Information for
Part D Covered Drugs Prescribed for Part
D Eligible Individuals; II.L. CORF and
Rehabilitation Agency Issues; II.N.
Physician Self-Referral and AntiMarkup Issues; II.O1. Physician Quality
Reporting Initiative and O2. Electronic
Prescribing (E-Prescribing) Incentive
Program; II.Q. Educational
Requirements for Nurse Practitioners
and Clinical Nurse Specialists; II.R.
Portable X-Ray Issue; II.S.2. Prohibition
Concerning Payment of Continuous
Positive Airway Pressure (CPAP)
Devices; II.S.3. Beneficiary Signature for
Nonemergency Ambulance Transport
Services; II.S 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; II.S.6. Physician Resource Use
Feedback Program; II.T. Electronic
Prescribing (E–Prescribing) Incentive
Program; III.A. Section 101:
Improvements to Coverage of Preventive
Services: III.I. Section 143: SpeechLanguage Pathology Services; III.J.
Section 144(b): Repeal of Transfer of
Title for Oxygen Equipment; III.M.
Section 149: Adding Certain Entities as
Originating Sites for Payment of
Telehealth Services; IV. Potentially
Misvalued Codes Under PFS; V.E.
Discussion of Codes and AMA RUC
Recommendations for Which There Was
No AMA RUC recommendation or for
Which the Recommendation Was Not
Accepted; V.G. Additional Coding
Issues; and V.H. Establishment of
Interim PE RVUs for New and Revised
Physician’s Current Procedural
Terminology (CPT) Codes and New
Healthcare Common Procedure Coding
System (HCPCS) Codes for 2009.
V. Impact on Beneficiaries
There are a number of changes made
in this final rule with comment period
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 MIPPA
provisions related to the IPPE, and the
changes with respect to telehealth
services 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
result of the changes with respect to Part
B drugs and discontinuation of payment
69931
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 aggregate in beneficiary liability
due to 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). Beneficiary liability
would also be impacted by 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 PFS
services is estimated to be $468. In
addition, the portion of the 2009
standard monthly Part B premium
attributable to PFS services is estimated
to be $40.10.
To illustrate this point, as shown in
Table 47, the 2008 national payment
amount in the nonfacility setting for
CPT code 99203 (Office/outpatient visit,
new), is $91.03 which means that in
2008 a beneficiary is responsible for 20
percent of this amount, or $18. Based on
this rule, the 2009 national payment
amount in the nonfacility setting for
CPT code 99203, as shown in Table 47,
is $91.97 which means that, in 2009, the
beneficiary coinsurance for this service
would be $18.39.
Policies discussed in this rule that do
affect overall spending, such as the
additions to the list of codes that are
subject to the MPPR for diagnostic
imaging, would similarly impact
beneficiaries’ coinsurance.
W. Accounting Statement
As required by OMB Circular A–4
(available at https://www.whitehouse.
gov/omb/circulars/a004/a-4.pdf), in
Table 53, we have prepared an
accounting statement showing the
classification of the expenditures
associated with this final rule with
comment period. This estimate includes
the incurred benefit impact associated
with the estimated CY 2009 PFS update
based on the 2008 Trustees Report
baseline, as well as certain MIPPA
provisions. All estimated impacts are
classified as transfers.
TABLE 53—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES FROM CY 2008 TO CY 2009
Category
Transfers
Annualized Monetized Transfers ....
From Whom To Whom? .................
Estimated increase in expenditures of $3.00 billion.
Federal Government to physicians, other practitioners and providers and suppliers who receive payment
under Medicare.
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
In accordance with the provisions of
Executive Order 12866, this final rule
with comment period was reviewed by
the Office of Management and Budget.
42 CFR Part 489
List of Subjects
■
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR
chapter IV as set forth below:
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.
PART 405—FEDERAL HEALTH
INSURANCE FOR THE AGED AND
DISABLED
1. The authority citation for part 405
continues to read as follows:
■
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 413
Health facilities, Kidney diseases,
Medicare, Reporting and recordkeeping
requirements.
42 CFR Part 414
Administrative practice and
procedure, Health facilities, Health
professions, Kidney diseases, Medicare,
Reporting and recordkeeping.
42 CFR Part 415
Health facilities, Health professions,
Medicare, Reporting and recordkeeping
requirements.
42 CFR Part 423
Administrative practice and
procedure, Emergency medical services,
Health facilities, Health maintenance
organizations (HMO), Health
professionals, Medicare, Penalties,
Privacy, Reporting and recordkeeping
requirements.
42 CFR Part 424
Emergency medical services, Health
facilities, Health professions, Medicare,
Reporting and recordkeeping
requirements.
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42 CFR Part 485
Grant programs—health, Health
facilities, Medicaid, Medicare,
Reporting and recordkeeping
requirements.
Health facilities, Medicare, Reporting
and recordkeeping requirements.
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 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
42 CFR Part 486
3. The authority citation for part 409
continues to read as follows:
Grant programs—health, Health
facilities, Medicare, Reporting and
recordkeeping requirements, X-rays.
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
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■
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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 410.16 is amended in
paragraph (a) by—
■ A. Revising the definition of ‘‘Eligible
beneficiary’’.
■ B. Adding the definition of ‘‘End-oflife planning’’ in alphabetical order.
■ C. Revising paragraphs (4), (5), and (7)
of the definition ‘‘Initial preventive
physical examination.’’
■
§ 410.16 Initial preventive physical exam:
Conditions for and limitations on coverage.
(a) * * *
Eligible beneficiary means, for the
purposes of this section, an individual
who receives his or her initial
preventive examination not more than 1
year after the effective date of his or her
first Medicare Part B coverage period.
End-of-life planning means, for
purposes of this section, verbal or
written information regarding the
following areas:
(1) An individual’s ability to prepare
an advance directive in the case where
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an injury or illness causes the
individual to be unable to make health
care decisions.
(2) Whether or not the physician is
willing to follow the individual’s wishes
as expressed in an advance directive.
Initial preventive physical exam
* * *
(4) An examination to include
measurement of the beneficiary’s height,
weight, body mass index, blood
pressure, a visual acuity screen, and
other factors as deemed appropriate,
based on the beneficiary’s medical and
social history, and current clinical
standards.
(5) End-of-life planning as that term is
defined in this section upon agreement
with the individual.
*
*
*
*
*
(7) Education, counseling, and
referral, including a brief written plan
such as a checklist provided to the
individual for obtaining an
electrocardiogram, as appropriate, and
the appropriate screening and other
preventive services that are covered as
separate Medicare Part B benefits as
described in sections 1861(s)(10), (jj),
(nn), (oo), (pp), (qq)(1), (rr), (uu), (vv),
(xx)(1), (yy), (bbb), and (ddd) of the Act.
*
*
*
*
*
8. Section 410.33 is amended by
adding paragraphs (g)(16) and (17) to
read as follows:
■
§ 410.33
facility.
Independent diagnostic testing
*
*
*
*
*
(g) * * *
(16) Enrolls for any diagnostic
imaging services that it furnishes to a
Medicare beneficiary, regardless of
whether the service is furnished in a
mobile or fixed base location.
(17) Bills for all mobile diagnostic
services that are furnished to a Medicare
beneficiary, unless the mobile
diagnostic service is part of a hospital
service provided under arrangement
with that hospital.
*
*
*
*
*
9. Section 410.62 is amended by—
A. Revising paragraphs (a)(2) and (3).
■ B. Amending the heading of
paragraph (b) by removing the phrase,
‘‘services to certain inpatients’’ and
adding in its place ‘‘services furnished
to certain inpatients.’’
■ C. Removing paragraph (d).
■ D. Redesignating paragraph (c) as
paragraph (d).
■ E. Adding new paragraph (c).
The revisions and addition read as
follows:
■
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■
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§ 410.62 Outpatient speech-language
pathology services: Conditions and
exclusions.
(a) * * *
(2) They are furnished under a written
plan of treatment that meets the
requirements of § 410.61.
(3) They are furnished by one of the
following:
(i) A provider as defined in § 489.2 of
this chapter, or by others under
arrangements with, and under the
supervision of, a provider.
(ii) A speech-language pathologist in
private practice as described in
paragraph (c) of this section.
(iii) Incident to the service of, a
physician, physician assistant, clinical
nurse specialist, or nurse practitioner
when those professionals may perform
speech-language pathology services
under State law. When a speechlanguage pathology service is provided
incident to the services of a physician,
physician assistant, clinical nurse
specialist, or nurse practitioner, by
anyone other than a physician,
physician assistant, clinical nurse
specialist, or nurse practitioner, the
service and the person who furnishes
the service must meet the standards and
conditions that apply to speechlanguage pathology and speechlanguage pathologists, except that a
license to practice speech-language
pathology services in the State is not
required.
*
*
*
*
*
(c) Special provisions for services
furnished by speech-language
pathologists in private practice.
(1) Basic qualifications. In order to
qualify under Medicare as a supplier of
outpatient speech-language pathology
services, each individual speechlanguage pathologist in private practice
must meet the following requirements:
(i) Be legally authorized (if applicable,
licensed, certified, or registered) to
engage in the private practice of speechlanguage pathology by the State in
which he or she practices, and practice
only within the scope of his or her
license and/or certification.
(ii) Engage in the private practice of
speech-language pathology as an
individual, in one of the following
practice types:
(A) An unincorporated solo practice.
(B) An unincorporated partnership or
unincorporated group practice.
(C) An unincorporated solo practice,
partnership, or group practice, or a
professional corporation or other
incorporated speech-language pathology
practice.
(D) An employee of a physician
group.
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69933
(E) An employee of a group that is not
a professional corporation.
(iii) Bill Medicare only for services
furnished in one of the following:
(A) A speech-language pathologist’s
private practice office space that meets
all of the following:
(1) The location(s) where the practice
is operated, in the State(s) where the
therapist (and practice, if applicable) is
legally authorized to furnish services
and during the hours that the therapist
engages in practice at that location.
(2) The space must be owned, leased,
or rented by the practice, and used for
the exclusive purpose of operating the
practice.
(B) A patient’s home not including
any institution that is a hospital, a CAH,
or a SNF.
(iv) Treat individuals who are patients
of the practice and for whom the
practice collects fees for the services
furnished.
*
*
*
*
*
■ 10. Section 410.64 is added to read as
follows:
§ 410.64
Additional preventive services.
(a) Medicare Part B pays for
additional preventive services not
otherwise described in this subpart that
identify medical conditions or risk
factors for individuals if the Secretary
determines through the national
coverage determination process (as
defined in section 1869(f)(1)(B) of the
Act) that these services are all of the
following:
(1) Reasonable and necessary for the
prevention or early detection of illness
or disability.
(2) Recommended with a grade of A
or B by the United States Preventive
Services Task Force.
(3) Appropriate for individuals
entitled to benefits under part A or
enrolled under Part B.
(b) In making determinations under
paragraph (a) of this section regarding
the coverage of a new preventive
service, the Secretary may conduct an
assessment of the relation between
predicted outcomes and the
expenditures for such services and may
take into account the results of such an
assessment in making such national
coverage determinations.
■ 11. Section 410.75 is amended by
revising paragraph (b) to read as follows:
§ 410.75
Nurse practitioners’ services.
*
*
*
*
*
(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
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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.
*
*
*
*
*
■ 12. Section 410.76 is amended by
revising paragraph (b)(2) to read as
follows:
§ 410.76 Clinical nurse specialists’
services.
*
*
*
*
*
(b) * * *
(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
*
*
*
*
*
■ 13. Section 410.78 is amended by—
■ A. Revising the introductory text of
paragraph (b).
■ B. Adding paragraphs (b)(3)(vi), (vii),
and (viii).
The revision and additions 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:
*
*
*
*
*
(3) * * *
(vi) A hospital-based or critical access
hospital-based renal dialysis center
(including satellites).
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(vii) A skilled nursing facility (as
defined in section 1819(a) of the Act).
(viii) A community mental health
center (as defined in section
1861(ff)(3)(B) of the Act).
*
*
*
*
*
Subpart I—Payment of SMI Benefits
14. Section 410.155 is amended by
revising paragraph (b)(1) introductory
text to read as follows:
■
§ 410.155 Outpatient mental health
treatment limitation.
*
*
*
*
*
(b) * * *
(1) Services subject to the limitation.
Except as specified in paragraph (b)(2)
of this section, services furnished by
physicians and other practitioners,
whether furnished directly or 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:
*
*
*
*
*
15. Section 410.160 is amended by
adding paragraph (b)(9) to read as
follows:
■
§ 410.160
Part B annual deductible.
*
*
*
*
*
(b) * * *
(9) Beginning January 1, 2009, initial
preventive physical examinations as
described in § 410.16.
*
*
*
*
*
PART 411—EXCLUSIONS FROM
MEDICARE AND LIMITATIONS ON
MEDICARE PAYMENT
16. 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 A—General Exclusions and
Exclusion of Particular Services
17. Section 411.15 is amended by—
A. Revising paragraphs (a)(1) and (b).
B. Adding new paragraph (k)(15).
C. Redesignating paragraphs
(p)(2)(xii), (xiii), (xiv), and (xv) as
(p)(2)(xiii), (xiv), (xv), and (xvi)
respectively.
■ D. Adding new paragraph (p)(2)(xii).
The revision and additions read as
follows:
■
■
■
■
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§ 411.15 Particular services excluded from
coverage.
*
*
*
*
*
(a) * * *
(1) Examinations performed for a
purpose other than treatment or
diagnosis of a specific illness,
symptoms, complaint, or injury, except
for screening mammography, colorectal
cancer screening tests, screening pelvic
exams, prostate cancer screening tests,
glaucoma screening exams, ultrasound
screening for abdominal aortic
aneurysms (AAA), cardiovascular
disease screening tests, diabetes
screening tests, a screening
electrocardiogram, initial preventive
physical examinations that meet the
criteria specified in paragraphs (k)(6)
through (k)(15) of this section, or
additional preventive services that meet
the criteria in § 410.64 of this chapter.
*
*
*
*
*
(b) Low vision aid exclusion—(1)
Scope. The scope of the eyeglass
exclusion encompasses all devices
irrespective of their size, form, or
technological features that use one or
more lens to aid vision or provide
magnification of images for impaired
vision.
(2) Exceptions. (i) Post-surgical
prosthetic lenses customarily used
during convalescence for eye surgery in
which the lens of the eye was removed
(for example, cataract surgery).
(ii) Prosthetic intraocular lenses and
one pair of conventional eyeglasses or
contact lenses furnished subsequent to
each cataract surgery with insertion of
an intraocular lens.
(iii) Prosthetic lenses used by
Medicare beneficiaries who are lacking
the natural lens of the eye and who were
not furnished with an intraocular lens.
*
*
*
*
*
(k) * * *
(15) In the case of additional
preventive services not otherwise
described in this title, subject to the
conditions and limitation specified in
§ 410.64 of this chapter.
*
*
*
*
*
(p) * * *
(2) * * *
(xii) Services described in paragraphs
(k)(15)(i) thorugh (vi) of this section
when furnished via telehealth under
section 1834(m)(4)(C)(ii)(VII) of the Act.
*
*
*
*
*
■ 18. Section 411.351 is amended by—
■ A. Amending the definition of
‘‘Designated health services (DHS)’’ by
adding the word ‘‘outpatient’’ before the
phrase ‘‘speech-language pathology
services’’ in paragraph (1)(ii).
■ B. Amending the definition of
‘‘Physical therapy, occupational
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therapy, and speech-language pathology
services’’ by—
■ 1. Removing the phrase ‘‘speechlanguage pathology’’ wherever it
appears within the heading or
introductory text and adding in its place
the phrase ‘‘outpatient speech-language
pathology.’’
■ 2. Removing the parenthetical phrase
‘‘(including speech-language pathology
services)’’ from the introductory text in
paragraph (1).
■ 3. Adding the word ‘‘or’’ to follow
‘‘equipment;’’ at the end of paragraph
(1)(ii).
■ 4. Removing ‘‘; or’’ at the end of
paragraph (1)(iii) and replacing it with
a period.
■ 5. Removing paragraph (1)(iv).
■ 6. Adding a new paragraph (3).
The addition reads as follows:
§ 411.351
Definitions.
*
*
*
*
*
Physical therapy, occupational
therapy, and outpatient speechlanguage pathology services * * *
*
*
*
*
*
(3) Outpatient speech-language
pathology services, meaning those
services as described in section
1861(ll)(2) of the Act that are for the
diagnosis and treatment of speech,
language, and cognitive disorders that
include swallowing and other oralmotor dysfunctions.
*
*
*
*
*
21. 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
19. The authority citation for part 413
continues to read as follows:
■
Authority: Secs. 1102, 1812(d), 1814(b),
1815, 1833(a), (i), and (n), 1861(v), 1871,
1881, 1883, and 1886 of the Social Security
Act (42 U.S.C. 1302, 1395d(d), 1395f(b),
1395g, 1395l(a), (i), and (n), 1395x(v),
1395hh, 1395rr, 1395tt, and 1395ww); and
sec. 124 of Public Law 106–133 (113 Stat.
1501A–332).
Subpart H—Payment for End-Stage
Renal Disease (ESRD) Services and
Organ Procurement Costs
20. Section 413.174 is amended by—
A. Revising the introductory text of
paragraphs (a) and (c).
■ B. Revising paragraph (a)(1).
■ C. Redesignating paragraphs (a)(2) and
(a)(3) as paragraphs (a)(3) and (a)(4),
respectively.
■ D. Adding new paragraph (a)(2).
The revisions and addition read as
follows:
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(a) Establishment of rates. CMS
establishes prospective payment rates
for ESRD facilities using the following
methodology:
(1) For dialysis services furnished
prior to January 1, 2009, the
methodology differentiates between
hospital-based and independent ESRD
facilities;
(2) For dialysis services furnished on
or after January 1, 2009—
(i) The composite rate paid to
hospital-based facilities for dialysis
services shall be the same as the
composite rate paid for such services
furnished by independent renal dialysis
facilities.
(ii) When applying the geographic
index to hospital-based facilities, the
labor share shall be based on the labor
share otherwise applied for renal
dialysis facilities.
*
*
*
*
*
(c) Determination of hospital-based
facility. A determination under this
paragraph (c) is an initial determination
under § 498.3 of this chapter. CMS
determines that a facility is hospitalbased if the—
*
*
*
*
*
PART 414—PAYMENT FOR PART B
MEDICAL AND OTHER HEALTH
SERVICES
PART 413—PRINCIPLES OF
REASONABLE COST
REIMBURSEMENT FOR END-STAGE
RENAL DISEASE SERVICES;
PROSPECTIVELY DETERMINED
PAYMENT RATES FOR SKILLED
NURSING FACILITIES
■
■
§ 413.174 Prospective rates for hospitalbased and independent ESRD facilities.
22. 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 PE 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 PE 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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69935
23. Section 414.50 is amended by—
A. Revising the section heading as set
forth below.
■ B. Revising paragraph (a).
The revisions read as follows:
■
■
§ 414.50 Physician or other supplier billing
for diagnostic tests performed or
interpreted by a physician who does not
share a practice with the billing physician
or other supplier.
(a) General rules. (1) For services
covered under section 1861(s)(3) of the
Act and paid for under part 414 of this
chapter (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
bills for the technical component (TC)
or professional component (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 as described in
§ 413.17 of this chapter) and the
diagnostic test is performed by a
physician who does not share a practice
with 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:
(i) The performing supplier’s net
charge to the billing physician or other
supplier. 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.
(ii) The billing physician or other
supplier’s actual charge.
(iii) The fee schedule amount for the
test that would be allowed if the
performing supplier billed directly.
(2) The following requirements are
applicable for purposes of paragraph
(a)(1) of this section:
(i) The net charge must be determined
without regard to any charge that is
intended to reflect the cost of equipment
or space leased to the performing
supplier by or through the billing
physician or other supplier.
(ii) A performing physician shares a
practice with the billing physician or
other supplier if he or she furnishes
substantially all (which, for purposes of
this section, means ‘‘at least 75
percent’’) of his or her professional
services through such billing physician
or other supplier. The ‘‘substantially
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all’’ requirement will be satisfied if, at
the time the billing physician or other
supplier submits a claim for a service
furnished by the performing physician,
the billing physician or other supplier
has a reasonable belief that:
(A) For the 12 months prior to and
including the month in which the
service was performed, the performing
physician furnished substantially all of
his or her professional services through
the billing physician or other supplier;
or
(B) The performing physician will
furnish substantially all of his or her
professional services through the billing
physician or other supplier for the next
12 months (including the month in
which the service is performed).
(iii) A physician will be deemed to
share a practice with the billing
physician or other supplier with respect
to the performance of the TC or PC of
a diagnostic test if the physician is an
owner, employee or independent
contractor of the billing physician or
other supplier and the TC or PC is
performed in the office of the billing
physician or other supplier. 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. The performance of
the TC includes both the conducting of
the TC as well as the supervision of the
TC.
*
*
*
*
*
■ 24. Section 414.65 is amended by
revising paragraph (a)(1) to read as
follows:
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§ 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
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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
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.
*
*
*
*
*
■ 25. 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 geographic HPSAs
as of December 31 of the prior year.
Physicians furnishing services in areas
that are designated as geographic 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 D—Payment for Durable
Medical Equipment and Prosthetic and
Orthotic Devices
26. Section 414.210 is amended by—
A. Revising paragraphs (e)(1) and (2).
B. Removing paragraph (e)(3).
C. Redesignating paragraphs (e)(4) and
(e)(5) as paragraphs (e)(3) and (e)(4),
respectively.
■ D. Revising newly redesignated
paragraphs (e)(3)(ii), (e)(3)(iii), and
(e)(4).
The revisions read as follows:
■
■
■
■
§ 414.210
General payment rules.
*
*
*
*
*
(e) * * *
(1) General rule. Except as provided
in paragraph (e)(3) of this section, the
carrier pays the reasonable and
necessary charges for maintenance and
servicing of beneficiary-owned
equipment. Reasonable and necessary
charges are those made for parts and
labor not otherwise covered under a
manufacturer’s or supplier’s warranty.
Payment is made for replacement parts
in a lump sum based on the carrier’s
consideration of the item. The carrier
establishes a reasonable fee for labor
associated with repairing, maintaining,
and servicing the item. Payment is not
made for maintenance and servicing of
a rented item other than the
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maintenance and servicing fee for
oxygen equipment described in
paragraph (e)(2) of this section or for
other durable medical equipment as
described in § 414.229(e).
(2) Maintenance and servicing
payment for 2009 for certain oxygen
equipment furnished after the 36-month
rental period. The carrier makes a
maintenance and servicing payment for
oxygen equipment other than liquid and
gaseous equipment (stationary and
portable) as follows:
(i) For the first 6-month period
following the date on which the 36month rental period ends, in accordance
with § 414.226(a)(1), no payments are
made.
(ii) During each succeeding 6-month
period, payment may be made for 30
minutes of labor for general
maintenance and servicing of the
equipment in the beneficiary’s home.
(3) Exception to Maintenance and
Servicing Payments. For items
purchased on or after June 1, 1989, no
payment is made under the provisions
of paragraph (e)(1) of this section for the
maintenance and servicing of:
(i) Items requiring frequent and
substantial servicing, as defined in
§ 414.222(a);
(ii) Capped rental items, as defined in
§ 414.229(a), that are not beneficiaryowned in accordance with § 414.229(d),
§ 414.229(f)(2), or § 414.229(h); and
(iii) Capped rental items, as defined in
§ 414.229(a), that are not beneficiaryowned in § 414.229(d), § 414.229(f)(2),
or § 414.229(h); and
(iv) Oxygen equipment, as described
in § 414.226.
(4) Supplier replacement of
beneficiary-owned equipment based on
accumulated repair costs. A supplier
that transfers title to a capped rental
item to a beneficiary in accordance with
§ 414.229(f)(2) is responsible for
furnishing replacement equipment at no
cost to the beneficiary or to the
Medicare program if the carrier
determines that the item furnished by
the supplier will not last for the entire
reasonable useful lifetime established
for the equipment in accordance with
§ 414.210(f)(1). In making this
determination, the carrier may consider
whether the accumulated costs of repair
exceed 60 percent of the cost to replace
the item.
*
*
*
*
*
■ 27. Section 414.226 is amended by
revising paragraphs (d)(3), (d)(4), (f),
(g)(1) introductory text, (g)(2)
introductory text and (g)(3) and by
removing paragraph (g)(4) to read as
follows:
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§ 414.226
Oxygen and oxygen equipment.
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*
*
*
*
(d) * * *
(3) The fee schedule amount for items
described in paragraph (c)(1)(iv) of this
section is paid when the beneficiary—
(i) Owns stationary oxygen equipment
that requires delivery of gaseous or
liquid oxygen contents; or
(ii) Rents stationary oxygen
equipment that requires delivery of
gaseous or liquid oxygen contents after
the period of continuous use of 36
months described in paragraph (a)(1) of
this section.
(4) The fee schedule amount for items
described in paragraph (c)(1)(v) of this
section is paid when the beneficiary—
(i) Owns portable oxygen equipment
described in (c)(1)(ii) of this section;
(ii) Rents portable oxygen equipment
described in paragraph (c)(1)(ii) of this
section during the period of continuous
use of 36 months described in paragraph
(a)(1) of this section and does not rent
stationary oxygen equipment; or
(iii) Rents portable oxygen equipment
described in paragraph (c)(1)(ii) of this
section after the period of continuous
use of 36 months described in paragraph
(a)(1) of this section.
*
*
*
*
*
(f) Furnishing oxygen and oxygen
equipment after the 36-month rental
cap. (1) The supplier that furnishes
oxygen equipment for the 36th
continuous month during which
payment is made under this section
must—
(i) Continue to furnish the equipment
during any period of medical need for
the remainder of the reasonable useful
lifetime established for the equipment
in accordance with § 414.210(f)(1); or
(ii) Arrange for furnishing the oxygen
equipment with another supplier if the
beneficiary relocates to an area that is
outside the normal service area of the
supplier that initially furnished the
equipment.
(2) The supplier that furnishes liquid
or gaseous oxygen equipment
(stationary or portable) for the 36th
continuous month during which
payment is made under this section
must—
(i) Continue to furnish the oxygen
contents necessary for the effective use
of the liquid or gaseous equipment
during any period of medical need for
the remainder of the reasonable useful
lifetime established for the equipment
in accordance with § 414.210(f)(1); or
(ii) Arrange for furnishing the oxygen
contents with another supplier if the
beneficiary relocates to an area that is
outside the normal service area of the
supplier that initially furnished the
equipment.
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(g) * * *
(1) The supplier that furnishes oxygen
equipment for the first month during
which payment is made under this
section must continue to furnish the
equipment for the entire 36-month
period of continuous use, unless
medical necessity ends or—
*
*
*
*
*
(2) Oxygen equipment furnished
under this section may not be replaced
by the supplier prior to the expiration
of the reasonable useful lifetime
established for the equipment in
accordance with § 414.210(f)(1) unless:
*
*
*
*
*
(3) Before furnishing oxygen
equipment, the supplier must disclose
to the beneficiary its intentions
regarding whether it will accept
assignment of all monthly rental claims
for the duration of the rental period. A
supplier’s intentions could be expressed
in the form of a written agreement
between the supplier and the
beneficiary.
■ 28. Section 414.228 is amended by
adding paragraph (c) to read as follows:
69937
*
*
*
*
(h) Oxygen equipment furnished after
the 36-month rental period. A new
period of continuous use does not begin
under any circumstance in the case of
oxygen equipment furnished after the
36-month rental period in accordance
with § 414.226(f) until the end of the
reasonable useful lifetime established
for such equipment in accordance with
§ 414.210(f).
applicable RVUs for each level of
service to produce a service-level base
rate. For services furnished during the
period July 1, 2004 through December
31, 2006, ambulance services originating
in urban areas (both base rate and
mileage) are paid based on a rate that is
one percent higher than otherwise is
applicable under this section, and
ambulance services originating in rural
areas (both base rate and mileage) are
paid based on a rate that is two percent
higher than otherwise is applicable
under this section. For services
furnished during the period July 1, 2008
through December 31, 2009, ambulance
services originating in urban areas (both
base rate and mileage) are paid based on
a rate that is 2 percent higher than
otherwise is applicable under this
section, and ambulance services
originating in rural areas (both base rate
and mileage) are paid based on a rate
that is three percent higher than
otherwise is applicable under this
section.
(ii) The service-level base rate is then
adjusted by the GAF. Compare this
amount to the actual charge. The lesser
of the actual charge or the GAF adjusted
base rate amount is added to the lesser
of the actual mileage charges or the
payment rate per mile, multiplied by the
number of miles that the beneficiary
was transported. When applicable, the
appropriate RAF is applied to the
ground mileage rate to determine the
appropriate payment rates. The RVU
scale for the ambulance fee schedule is
as follows:
*
*
*
*
*
(h) Treatment of certain areas for
payment for air ambulance services.
Any area that was designated as a rural
area for purposes of making payments
under the ambulance fee schedule for
air ambulance services furnished on
December 31, 2006, must be treated as
a rural area for purposes of making
payments under the ambulance fee
schedule for air ambulance services
furnished during the period July 1, 2008
through December 31, 2009.
Subpart H—Fee Schedule for
Ambulance Services
Subpart K—Payment for Drugs and
Biologicals Under Part B
§ 414.228
Prosthetic and orthotic devices.
*
*
*
*
*
(c) Payment for therapeutic shoes.
The payment rules specified in
paragraphs (a) and (b) of this section are
applicable to custom molded and extra
depth shoes, modifications, and inserts
(therapeutic shoes) furnished after
December 31, 2004.
■ 29. Section 414.230 is amended by
adding paragraph (h) to read as follows:
§ 414.230 Determining a period of
continuous use.
*
30. Section 414.610 is amended by—
A. Revising paragraph (c)(1)
introductory text.
■ B. Adding new paragraph (h).
The revision and addition read as
follows:
■
■
§ 414.610
Basis of payment.
*
*
*
*
*
(c) * * *
(1) Ground ambulance service levels.
(i) The CF is multiplied by the
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31. Section 414.904 is amended by
revising paragraphs (b)(2), (c)(2), (d)(3),
and (e)(1)(i) to read as follows:
■
§ 414.904 Average sales price as the basis
for payment.
*
*
*
*
*
(b) * * *
(2) Calculation of the average sales
price. (i) For dates of service before
April 1, 2008, the average sales price is
determined by—
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(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
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
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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
(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.
*
*
*
*
*
PART 415—SERVICES FURNISHED BY
PHYSICIANS IN PROVIDERS,
SUPERVISING PHYSICIANS IN
TEACHING SETTINGS, AND
RESIDENTS IN CERTAIN SETTINGS
32. The authority citation for part 415
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
Subpart C—Part B Carrier Payments
for Physician Services to Beneficiaries
in Providers
§ 415.130
[Amended]
33. In § 415.130(d), the phrase
‘‘December 31, 2007’’ is removed and
the phrase ‘‘December 31, 2009’’ is
added in its place.
■
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PART 423—VOLUNTARY MEDICARE
PRESCRIPTION DRUG BENEFIT
34. The authority citation for part 423
continues to read as follows:
■
Authority: Sections 1102, 1106, 1860D–1
through 1860D–42, and 1871 of the Social
Security Act (42 U.S.C. 1302, 1306, 1395w–
101 through 1395w–152, and 1395hh).
35. Section 423.160 is amended by
revising paragraph (a)(3)(i) to read as
follows:
■
§ 423.160 Standards for electronic
prescribing.
(a) * * *
(3) * * *
(i) Until January 1, 2012, entities
transmitting prescriptions or
prescription-related information by
means of computer-generated facsimile
are exempt from the requirement to use
the NCPDP SCRIPT Standard adopted
by this section in transmitting such
prescriptions or prescription-related
information. After January 1, 2012,
entities transmitting prescriptions or
prescription-related information must
utilize the NCPSP SCRIPT standard in
all instances other than temporary/
transient network transmission failures.
*
*
*
*
*
PART 424—CONDITIONS FOR
MEDICARE PAYMENT
36. 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
37. Section 424.36 is amended by
revising paragraphs (a), (b)(6)
introductory text, and (b)(6)(ii)(C)(2) to
read as follows:
■
§ 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. 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
nonemergency ambulance transport
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services, if the following conditions and
documentation requirements are met.
*
*
*
*
*
(ii) * * *
(C) * * *
(2) The requested information from a
representative of the hospital or facility
using a secondary form of verification
obtained at a later date, but prior to
submitting the claim to Medicare for
payment. Secondary forms of
verification include a copy of any of the
following:
(i) The signed patient care/trip report;
(ii) The facility or hospital
registration/admission sheet;
(iii) The patient medical record;
(iv) The facility or hospital log; or
(v) Other internal facility or hospital
records.
*
*
*
*
*
■ 38. Section 424.44 is amended by—
■ A. Revising the introductory text of
paragraph (a).
■ B. Adding paragraph (e).
The revision and addition read as
follows:
§ 424.44
Time limits for filing claims.
(a) Basic Limits. Except as provided in
paragraph (b) and (e) of this section, the
claim must be delivered to the
intermediary or carrier as appropriate:
*
*
*
*
*
(e) Exceptions. Any claims filed by
the following suppliers with Medicare
billing privileges whose time limits for
filing claims are linked to their
enrollment status and are governed
under § 424.516, § 424.520, and
§ 424.521 of this subpart:
(1) Physician or nonphysician
organizations.
(2) Physicians.
(3) Nonphysician practitioners.
(4) Independent diagnostic testing
facilities.
Subpart D—To Whom Payment Is
Ordinarily Made
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§ 424.57 Special payment rules for items
furnished by DMEPOS suppliers and
issuance of DMEPOS supplier billing
privileges.
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Subpart P—Requirements for
Establishing and Maintaining Medicare
Billing Privileges
40. Section 424.502 is amended by
adding the definitions ‘‘Final adverse
action’’ and ‘‘Physician or nonphysician
practitioner organization’’ in
alphabetical order to read as follows:
■
39. Section 424.57 is amended by—
A. Amending paragraph (a) by adding
the definitions of ‘‘Affiliate’’, ‘‘Attended
facility-based polysomnogram’’,
‘‘Continuous positive airway pressure
(CPAP)’’ device, and ‘‘Sleep test’’ in
alphabetical order.
■ B. Adding new paragraph (f).
The additions read as follows:
■
■
(a) * * *
Affiliate means a person or
organization that is related to another
person or organization through a
compensation arrangement or
ownership.
Attended facility-based
polysomnogram means a comprehensive
diagnostic sleep test including at least
electroencephalography, electrooculography, electromyography, heart
rate or electrocardiography, airflow,
breathing effort, and arterial oxygen
saturation furnished in a sleep
laboratory facility in which a
technologist supervises the recording
during sleep time and has the ability to
intervene if needed.
*
*
*
*
*
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 test for a sleep
disorder 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 and/or
interprets the sleep test and/or furnishes
the sleep test device used to administer
the sleep test.
*
*
*
*
*
(f) Payment prohibition. No Medicare
payment will be made to the supplier of
a CPAP device if that supplier, or its
affiliate, is directly or indirectly the
provider of the sleep test used to
diagnose the beneficiary with
obstructive sleep apnea. This
prohibition does not apply if the sleep
test is an attended facility-based
polysomnogram.
§ 424.502
Definitions.
*
*
*
*
*
Final adverse action means one or
more of the following actions:
(1) A Medicare-imposed revocation of
any Medicare billing privileges;
(2) Suspension or revocation of a
license to provide health care by any
State licensing authority;
(3) Revocation or suspension by an
accreditation organization;
(4) A conviction of a Federal or State
felony offense (as defined in
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69939
§ 424.535(a)(3)(i)) within the last 10
years preceding enrollment,
revalidation, or re-enrollment; or
(5) An exclusion or debarment from
participation in a Federal or State health
care program.
*
*
*
*
*
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.
*
*
*
*
*
41. 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
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 chapter.
(c) Reporting requirements DMEPOS
suppliers. DMEPOS reporting
requirements are specified in
§ 424.57(c)(2).
(d) Reporting requirements for
physicians, nonphysician practitioners,
and physician and nonphysician
practitioner organizations. Physicians,
nonphysician practitioners, and
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physician and nonphysician
practitioner organizations must report
the following reportable events to their
Medicare contractor within the
specified timeframes:
(1) Within 30 days—
(i) A change of ownership;
(ii) Any adverse legal action; or
(iii) A 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. Reporting
requirements for all other providers 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 7 years
from the date of service. Physicians and
nonphysician practitioners are required
to maintain written ordering and
referring documentation for 7 years from
the date of service.
42. Section 424.517 is added to read
as follows:
■
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§ 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.
(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.
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(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]
43. 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 chapter.
(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.
(d) Physicians, nonphysician
practitioners, and physician and
nonphysician practitioner
organizations. The effective date for
billing privileges for physicians,
nonphysician practitioners, and
physician and nonphysician
practitioner organizations is the later of
the date of filing of a Medicare
enrollment application that was
subsequently approved by a Medicare
contractor or the date an enrolled
physician or nonphysician practitioner
first began furnishing services at a new
practice location.
44. Section 424.521 is added to read
as follows:
■
§ 424.521 Request for payment by
physicians, nonphysician practitioners,
physician or nonphysician organizations.
(a) Physicians, nonphysician
practitioners and physician and
nonphysician practitioner organizations
may retrospectively bill for services
when a physician or nonphysician
practitioner or a physician or a
nonphysician organization have met all
program requirements, including State
licensure requirements, and services
were provided at the enrolled practice
location for up to—
(1) 30 days prior to their effective date
if circumstances precluded enrollment
in advance of providing services to
Medicare beneficiaries, or
(2) 90 days prior to their effective date
if a Presidentially-declared disaster
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under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act,
42 U.S.C. 5121–5206 (Stafford Act)
precluded enrollment in advance of
providing services to Medicare
beneficiaries.
(b) [Reserved]
■ 45. 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.
*
*
*
*
*
■ 46. Section 424.535 is amended by—
■ A. Amending paragraph (a)(1) by
removing the phrase ‘‘billing
privileges.’’ and adding in its place
‘‘billing privileges, except for those
imposed under paragraphs (a)(2), (a)(3),
or (a)(5) of this section.
■ 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) * * *
(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.
*
*
*
*
*
(g) 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
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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.
(h) 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 60 calendar
days of the effective date of revocation.
■ 47. Section 424.565 is added to read
as follows:
§ 424.565
Overpayment.
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
final adverse action or change in
practice location. Overpayments are
processed in accordance with Part 405
Subpart C of this chapter.
PART 485—CONDITIONS OF
PARTICIPATION: SPECIALIZED
PROVIDERS
48. 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
49. Section 485.58 is amended by
revising the introductory text and
paragraphs (a)(1)(i) and (e)(2) to read as
follows:
■
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§ 485.58 Condition of participation:
Comprehensive rehabilitation program.
The facility must provide a
coordinated rehabilitation program that
includes, at a minimum, physicians’
services, physical therapy services, and
social or psychological services. These
services must be furnished by personnel
that meet the qualifications set forth in
§§ 485.70 and 484.4 of this chapter 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,
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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.
*
*
*
*
*
■ 50. Section 485.70 is amended by:
■ A. Revising paragraphs (c), (e), (j)
introductory text, (j)(2) and (j)(3).
■ B. Releting paragraph (k) and
redesignating paragraphs (l) and (m) as
paragraphs (k) and (l) respectively.
The revisions read 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.
*
*
*
*
*
(e) A physical therapist and a physical
therapist assistant must meet the
qualifications in § 484.4 of this chapter.
*
*
*
*
*
(j) A respiratory therapist must—
(1) * * *
(2) Have successfully completed a
nationally—accredited educational
program that confers eligibility for the
National Board for Respiratory Care
(NBRC) registry exams, and have passed
the registry examination administered
by the NBRC, or
(3) Have equivalent training and
experience as determined by the
National Board for Respiratory Care
(NBRC) and passed the registry
examination administered by the NBRC.
*
*
*
*
*
Subpart F—Conditions of
Participation: Critical Access Hospitals
(CAHs)
51. Section 485.635 is amended by
revising paragraph (e) to read as follows:
■
§ 485.635 Conditions of participation:
Provision of services.
*
*
*
*
*
(e) Standard: Rehabilitation Therapy
Services. Physical therapy, occupational
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69941
therapy, and speech-language pathology
services furnished at the CAH, if
provided, are provided by staff qualified
under State law, and consistent with the
requirements for therapy services in
§ 409.17 of this subpart.
Subpart H—Conditions of Participation
for Clinics, Rehabilitation Agencies,
and Public Health Agencies as
Providers of Outpatient Physical
Therapy and Speech-Language
Pathology Services
52. Section 485.703 is amended by—
A. Adding the definition of
‘‘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 should be 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 * * *
(2) Provides at least physical therapy
or speech-language pathology services.
*
*
*
*
*
■ 53. Section 485.711 is amended by
revising the introductory text and
paragraphs (b)(3) and (c) to read as
follows:
§ 485.711 Condition of participation: Plan
of care and physician involvement.
For each patient in need of outpatient
physical therapy or speech pathology
services, there is a written plan of care
established and periodically reviewed
by a physician, or by a physical
therapist or speech pathologist
respectively.
*
*
*
*
*
(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.
*
*
*
*
*
(c) Standard: Emergency care. The
rehabilitation agency must establish
procedures to be followed by personnel
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in an emergency, which cover
immediate care of the patient, persons
to be notified, and reports to be
prepared.
■ 54. 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
which 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/or services provided
under contract.
(b) Standard: Arrangements for
services. If services are provided under
contract, the contract must specify the
term of the contract, the manner of
termination or renewal and provide that
the agency retains responsibility for the
control and supervision of the services.
PART 486—CONDITIONS FOR
COVERAGE OF SPECIALIZED
SERVICES FURNISHED BY
SUPPLIERS
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.
*
*
*
*
*
PART 489—PROVIDER AGREEMENTS
AND SUPPLIER APPROVAL
57. The authority citation for part 489
continues to read as follows:
■
Authority: Secs. 1102, 1819, 1820(e), 1861,
1864(m), 1866, 1869, and 1871 of the Social
Security Act (42 U.S.C. 1302, 1395i–3, 1395x,
1395aa(m), 1395cc, 1395ff, and 1395hh).
Subpart B—Essentials of Provider
Agreements
58. Section 489.20 is amended by—
A. Redesignating paragraphs (s)(12),
(13), (14), and (15) as (s)(13), (14), (15),
and (16), respectively.
■ B. Adding new paragraph (s)(12).
The addition reads as follows:
■
■
§ 489.20
Basic commitments.
*
55. The authority citation for part 486
continues to read as follows:
■
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).
*
*
*
*
(s) * * *
(12) Services described in paragraphs
(s)(1) through (6) of this section when
furnished via telehealth under section
1834(m)(4)(C)(ii)(VII) of the Act.
*
*
*
*
*
■
■
56. 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:
Dated: October 21, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: October 29, 2008.
Michael O. Leavitt,
Secretary.
§ 486.104 Condition for coverage:
Qualifications, orientation and health of
technical personnel.
Note: These addenda will not appear in the
Code of Federal Regulations.
*
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Subpart C—Conditions for Coverage:
Portable X-Ray Services
Authority: Catalog of Federal Domestic
Assistance Program No. 93.773, Medicare—
Hospital Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program.
Addendum A: Explanation and Use of
Addenda B
*
*
*
*
(a) Standard-qualifications of
technologists. All operators of the
portable X-ray equipment meet the
requirements of paragraphs (a)(1), (2),
(3), or (4) of this section:
(1) Successful completion of a
program of formal training in X-ray
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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
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other information for all services included in
the PFS.
In previous years, we have listed many
services in Addendum B that are not paid
under the PFS. To avoid publishing as many
pages of codes for these services, we are not
including clinical laboratory codes or the
alphanumeric codes (Healthcare Common
Procedure Coding System (HCPCS) codes not
included in CPT) not paid under the PFS in
Addendum B.
Addendum B 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
alphanumeric HCPCS number for the service.
Alphanumeric 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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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 component 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
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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
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.
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5. Physician work RVUs. These are the
RVUs for the physician work for this service
in 2009.
6. Fully implemented non-facility practice
expense RVUs. These are the fully
implemented resource-based PE RVUs for
non-facility settings.
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:
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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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 / Rules and Regulations
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BILLING CODE 4120–01–P
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]]>Agencies
[Federal Register Volume 73, Number 224 (Wednesday, November 19, 2008)]
[Rules and Regulations]
[Pages 69726-70237]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26213]
[[Page 69725]]
-----------------------------------------------------------------------
Part II
Book 2 of 2 Books
Pages 69725-70238
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Parts 405, 409, et al.
Medicare Program; Payment Policies Under the Physician Fee Schedule and
Other Revisions to Part B for CY 2009; E-Prescribing Exemption for
Computer-Generated Facsimile Transmissions; and Payment for Certain
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
(DMEPOS); Final Rule
Federal Register / Vol. 73, No. 224 / Wednesday, November 19, 2008 /
Rules and Regulations
[[Page 69726]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 409, 410, 411, 413, 414, 415, 423, 424, 485, 486,
and 489
[CMS-1403-FC] [CMS-1270-F2]
RINs 0938-AP18, 0938-AN14
Medicare Program; Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2009; E-Prescribing
Exemption for Computer-Generated Facsimile Transmissions; and Payment
for Certain Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
-----------------------------------------------------------------------
SUMMARY: This final rule with comment period implements changes to the
physician fee schedule and other Medicare Part B payment policies to
ensure that our payment systems are updated to reflect changes in
medical practice and the relative value of services. It also finalizes
the calendar year (CY) 2008 interim relative value units (RVUs) and
issues interim RVUs for new and revised codes for CY 2009. In addition,
as required by the statute, it announces that the physician fee
schedule update is 1.1 percent for CY 2009, the preliminary estimate
for the sustainable growth rate for CY 2009 is 7.4 percent, and the
conversion factor (CF) for CY 2009 is $36.0666. This final rule with
comment period also implements or discusses certain provisions of the
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).
(See the Table of Contents for a listing of the specific issues
addressed in this rule.)
DATES: Effective Date: This final rule with comment period is effective
on January 1, 2009 except for amendments to Sec. 410.62 and Sec.
411.351 which are effective July 1, 2009.
Comment Date: Comments will be considered if we receive them at one
of the addresses provided below, no later than 5 p.m. e.s.t. on
December 29, 2008.
ADDRESSES: In commenting, please refer to file code CMS-1403-FC.
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 https://www.regulations.gov. 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 to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1403-FC, 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 to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1403-FC, 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:
7500 Security Boulevard, Baltimore, MD 21244-1850; or
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.)
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.
Corinne Axelrod, (410) 786-5620, for issues related to Health
Professional Shortage Area Bonus Payments.
Henry Richter, (410) 786-4562, for issues related to payments for
end-stage renal disease facilities.
Lisa Grabert, (410) 786-6827, for issues related to hospital-
acquired conditions and the Physician Resource Use Feedback Program.
August Nemec, (410) 786-0612, for issues related to independent
diagnostic testing facilities; 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, Kristin Bohl, (410) 786-8680, or Don
Romano, (410) 786-1401, for issues related to anti-markup provisions
and physician self-referral (incentive payment and shared savings
programs).
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 nonemergency 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.
Regina Walker-Wren, (410) 786-9160, for information concerning
educational
[[Page 69727]]
requirements for nurse practitioners and clinical nurse specialists.
Randy Throndset, (410) 786-0131, for information concerning
physician certification and recertification for Medicare home health
services.
William Larson, (410) 786-4639, for coverage issues related to the
initial preventive physical examination.
Cathleen Scally, (410) 786-5714, for payment issues related to the
initial preventive physical examination.
Dorothy Shannon, (410) 786-3396, for issues related to speech
language pathology.
Kendra Hedgebeth, (410) 786-4644, or Gina Longus, (410) 786-1287,
for issues related to low vision aids.
Christopher Molling, (410) 786-6399, or Anita Greenberg, (410) 786-
4601, for issues related to the repeal to transfer of title for oxygen
equipment.
Karen Jacobs, (410) 786-2173, or Hafsa Bora, (410) 786-7899, for
issues related to the therapeutic shoes fee schedule.
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 the
following issues:
The Exception for Incentive Payment and Shared Savings
Programs (Sec. 411.357(x)) in section II.N.1. of this final rule with
comment period;
Sections 131(c), 144(b), and 149 of the MIPPA as described
in sections III.C., III.J., and III.M. of this final rule with comment
period.
Interim Relative Value Units (RVUs) for selected codes
identified in Addendum C;
Information on pricing for items in Tables 2 through 5;
Issues related to the Physician Resource Use Feedback
Program described in section II.S.6. of this final rule with comment
period; and
The physician self-referral designated health services
(DHS) codes listed in Tables 29, 30, and 31. You can assist us by
referencing the file code [CMS-1403-FC] and the section heading 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 XVI. of this
final rule with comment period.
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 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
1. Payment for Preadministration-Related Services for
Intravenous Infusion of Immune Globulin
2. Multiple Procedure Payment Reduction for Diagnostic Imaging
3. HCPCS Code for Prostate Saturation Biopsies
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. Amendment to the Exemption for Computer-Generated Facsimile
(FAX) 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
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
1. Exception for Incentive Payment and Shared Savings Programs
(Sec. 411.357(x))
2. Changes to Reassignment Rules Related to Diagnostic Tests
(Anti-Markup Provisions)
O1. Physician Quality Reporting Initiative
O2. Electronic Prescribing (E-Prescribing) Incentive Program
P. Discussion of Chiropractic Services Demonstration
Q. Educational Requirements for Nurse Practitioners and Clinical
Nurse Specialists
R. Portable X-Ray Issue
S. 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 Payment of Continuous Positive Airway
Pressure (CPAP) Devices
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
6. Physician Resource Use Feedback Program
T. Electronic Prescribing (E-Prescribing) Incentive Program
III. Medicare Improvements for Patients and Providers Act of 2008
(MIPPA) Provisions
A. Section 101: Improvements to Coverage of Preventive Services
B. Section 131: Physician Payment, Efficiency, and Quality
Improvements
C. Section 131(c): Physician Resource Use Feedback Program
D. Section 132: Incentives for Electronic Prescribing
E. Section 133(b): Expanding Access to Primary Care Services
F. Section 134: Extension of Floor on Medicare Work Geographic
Adjustment Under the Medicare Physician Fee Schedule
G. Section 136: Extension of Treatment of Certain Physician
Pathology Services Under Medicare
H. Section 141: Extension of Exceptions Process for Medicare
Therapy Caps
[[Page 69728]]
I. Section 143: Speech-Language Pathology Services
J. Section 144(b): Repeal of Transfer of Title for Oxygen
Equipment
K. Section 145: Clinical Laboratory Tests
L. Section 146: Improved Access to Ambulance Services
M. Section 149: Adding Certain Entities as Originating Sites for
Payment of Telehealth Services
N. Section 153: Renal Dialysis Provisions
IV. Potentially Misvalued Codes Under PFS
A. Valuing Services Under the Physician Fee Schedule
B. Requested Approaches for the AMA RUC To Utilize
C. AMA RUC Review of Potentially Misvalued Codes
V. Refinement of Relative Value Units for Calendar Year 2009 and
Response to Public Comments on Interim Relative Value Units for 2008
A. Summary of Issues Discussed Related to the Adjustment of
Relative Value Units
B. Process for Establishing Work Relative Value Units for the
Physician Fee Schedule
C. Interim 2008 Codes
D. Establishment of Interim Work Relative Value Units for New
and Revised Physician's Current Procedural Terminology (CPT) Codes
and New Healthcare Common Procedure Coding System Codes (HCPCS) for
2009 (Includes Table Titled ``AMA RUC Recommendations and CMS'
Decisions for New and Revised 2009 CPT Codes'')
E. Discussion of Codes and AMA RUC Recommendations
F. Additional Coding Issues
G. Establishment of Interim PE RVUs for New and Revised
Physician's Current Procedural Terminology (CPT) Codes and New
Healthcare Common Procedure Coding System (HCPCS) Codes for 2009
VI. Physician Self-Referral Prohibition: Annual Update to the List
of CPT/HCPCS Codes
A. General
B. Speech-Language Pathology Services
C. Annual Update to the Code List
VII. Physician Fee Schedule Update for CY 2009
A. Physician Fee Schedule Update
B. The Percentage Change in the Medicare Economic Index (MEI)
C. The Update Adjustment Factor (UAF)
VIII. Allowed Expenditures for Physicians' Services and the
Sustainable Growth Rate (SGR)
A. Medicare Sustainable Growth Rate
B. Physicians' Services
C. Preliminary Estimate of the SGR for 2009
D. Revised Sustainable Growth Rate for 2008
E. Calculation of 2009, 2008, and 2007 Sustainable Growth Rates
IX. Anesthesia and Physician Fee Schedule Conversion Factors for CY
2009
A. Physician Fee Schedule Conversion Factor
B. Anesthesia Conversion Factor
X. Telehealth Originating Site Facility Fee Payment Amount Update
XI. Payment for Certain Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS)--Services Excluded From Coverage
A. Low Vision Aid Exclusion
B. Replacement of Reasonable Charge Methodology by Fee Schedules
for Therapeutic Shoes
XII. Provisions of the Final Rule
XIII. Waiver of Proposed Rulemaking and Delay in Effective Date
XIV. Collection of Information Requirements
XV. Response to Comments
XVI. Regulatory Impact Analysis
Regulation Text
Addendum A--Explanation and Use of Addendum B
Addendum B--Relative Value Units and Related Information Used in
Determining Medicare Payments for CY 2009
Addendum C--Codes With Interim RVUs
Addendum D--2009 Geographic Adjustment Factors (GAFs)
Addendum E--2009 Geographic Practice Cost Indices (GPCIs) by State
and Medicare Locality
Addendum F--Multiple Procedure Payment Reduction Code List
Addendum G--CY 2009 ESRD Wage Index for Urban Areas Based on CBSA
Labor Market Areas
Addendum H--CY 2009 ESRD Wage Index Based on CBSA Labor Market Areas
for Rural Areas
Addendum I--CPT/HCPCS Imaging Codes Defined by Section 5102(b) of
the DRA
Addendum J--List of CPT/HCPCS Codes Used To Define Certain
Designated Health Services Under Section 1877 of the Social Security
Act
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
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
CMHC Community mental health center
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
CSW Clinical social worker
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
EMTALA Emergency Medical Treatment and Active Labor Act
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
[[Page 69729]]
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
HOPD Hospital outpatient department
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)
MIPPA Medicare Improvements for Patients and Providers Act of 2008
(Pub. L. 110-275)
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
NPDB National Practitioner Data Bank
NPI National Provider Identifier
NPP Nonphysician practitioner
NPPES National Plan and Provider Enumeration System
NQF National Quality Forum
NRC Nuclear Regulatory Commission
NTTAA National Technology Transfer and Advancement Act of 1995 (Pub.
L. 104-113)
NUBC National Uniform Billing Committee
OACT [CMS'] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
ODF Open door forum
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
PHP Partial hospitalization program
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POA Present on admission
POC Plan of care
PPI Producer price index
PPS Prospective payment system
PPTA Plasma Protein Therapeutics Association
PQRI Physician Quality Reporting Initiative
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PSG Polysomnography
PT Physical therapy
ResDAC Research Data Assistance Center
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
SRS Stereotactic radiosurgery
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
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),
[[Page 69730]]
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-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 and 2008. This approach is consistent with the method we used to
make BN adjustments to reflect the changes in the PE RVUs.
Section 133(b) of the MIPPA amends section 1848(c)(2)(B) of the Act
to specify that, instead of continuing to apply the BN adjustor for the
5-Year Review to work RVUs, the BN adjustment must be applied to the CF
for years beginning with CY 2009. Further discussion of this MIPPA
provision as it relates to the CY 2009 PFS can be found in sections
III. and IX. of this final rule with comment period.
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
[[Page 69731]]
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 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 for
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 requirements
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
preliminary estimate for the sustainable growth rate (SGR) for CY 2008
is -0.1 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. For the
first half of 2008 (that is, January through June), the Medicare PFS
conversion factor was $38.0870. In the absence of legislation, the PFS
conversion factor for the second half of 2008 would have been $34.0682,
as announced in the PFS final rule with comment period for CY 2008.
However, as a result of the enactment of the Medicare Improvements for
Patients and Providers Act of 2008 (Pub. L. 110-275) (MIPPA), the
Medicare PFS conversion factor remained at $38.0870 for the remaining
portion of 2008 (July through December).
II. Provisions of the Final Rule With Comment Period
In response to the CY 2009 PFS proposed rule (73 FR 38502) we
received approximately 4,100 timely public comments. These included
comments from individual physicians, health care workers, professional
associations and societies, manufacturers and Congressmen. The majority
of the comments addressed proposals related to independent diagnostic
testing facilities, anti-markup, prohibition concerning providers of
sleep tests, and the general impact of the proposed rule on specific
specialties. To the extent that comments were outside the scope of the
proposed rule, they are not addressed in this final rule with comment
period.
A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)
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--
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
[[Page 69732]]
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 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 in most instances have accepted. As a result, the
current PE inputs differ markedly from those originally recommended by
the CPEPs. The PEAC was replaced by the Practice Expense Review
Committee (PERC) and now these PE-related activities are addressed by
the AMA RUC PE subcommittee.
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 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. We then 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 use the 2007
procedure-specific utilization data crosswalked to 2009 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
[[Page 69733]]
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 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 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.
[[Page 69734]]
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 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.
Work RVUs: The setup file contains the work RVUs from this
final 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
