Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011, 73170-73860 [2010-27969]

Agencies

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

[Federal Register Volume 75, Number 228 (Monday, November 29, 2010)]
[Rules and Regulations]
[Pages 73170-73860]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27969]



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Part II





Department of Health and Human Services





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Center for Medicare & Medicaid Services



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42 CFR Parts 405, 409, 410 et al.



Medicare Program; Payment Policies Under the Physician Fee Schedule and 
Other Revisions to Part B for CY 2011; Final Rule

Federal Register / Vol. 75, No. 228 / Monday, November 29, 2010 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 409, 410, 411, 413, 414, 415, and 424

[CMS-1503-FC]
RIN 0938-AP79


Medicare Program; Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2011

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

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period addresses 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 finalizes the 
calendar year (CY) 2010 interim relative value units (RVUs) and issues 
interim RVUs for new and revised procedure codes for CY 2011. It also 
addresses, implements, or discusses certain provisions of both the 
Affordable Care Act (ACA) and the Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA). In addition, this final rule with 
comment period discusses payments under the Ambulance Fee Schedule 
(AFS), the Ambulatory Surgical Center (ASC) payment system, and the 
Clinical Laboratory Fee Schedule (CLFS), payments to end-stage renal 
disease (ESRD) facilities, and payments for Part B drugs. Finally, this 
final rule with comment period also includes a discussion regarding the 
Chiropractic Services Demonstration program, the Competitive Bidding 
Program for durable medical equipment, prosthetics, orthotics, and 
supplies (CBP DMEPOS), and provider and supplier enrollment issues 
associated with air ambulances.

DATES: Effective date: These regulations are effective on January 1, 
2011. Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on January 3, 2011.

ADDRESSES: In commenting, please refer to file code CMS-1503-FC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the instructions for 
``submitting a comment.''
    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-1503-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-1503-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 before the close of the comment period 
to either of the following addresses: a. For delivery in Washington, 
DC--Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Room 445-G, Hubert H. Humphrey Building, 200 
Independence Avenue, SW., Washington, DC 20201
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.

FOR FURTHER INFORMATION CONTACT:

Sara Vitolo, (410) 786-5714, for issues related to malpractice RVUs.
Erin Smith, (410) 786-0763, for issues related to end-stage renal 
disease-related services for home dialysis.
Michael Moore, (410) 786-6830, for issues related to geographic 
practice cost indices.
Ken Marsalek, (410) 786-4502, for issues related to the physician 
practice information survey, the multiple procedure payment reduction, 
and payment for the technical component of pathology services.
Regina Walker-Wren, (410) 786-9160, for issues related to outpatient 
mental health add-on provision and increased payment for certified 
nurse-midwife services.
Elizabeth Truong, (410) 786-6005, or Sara Vitolo, (410) 786-5714, for 
issues related to potentially misvalued services.
Elizabeth Truong, (410) 786-6005, for issues related to the sustainable 
growth rate or anesthesia or physician fee schedule conversion factors.
Dorothy Shannon, (410) 786-3396, for issues related to outpatient 
therapy services.
Pamela West, (410) 786-2302, for issues related to payment for diabetes 
self-management training programs and kidney disease education 
services.
Ryan Howe, (410) 786-3355, for issues related to direct practice 
expense inputs and telehealth services.
Sara Vitolo, (410) 786-5714, for issues related to pulmonary 
rehabilitation services, application of skin substitutes, canalith 
repositioning, intranasal/oral immunization, and the refinement panel.
Roberta Epps, (410) 786-4503, for issues related to portable x-ray and 
bone density tests.
Chava Sheffield, (410) 786-2298, for issues related to equipment 
utilization rate assumption for advanced imaging services.
Chava Sheffield, (410) 786-2298, or Larry Chan, (410) 786-6864, for 
issues related the physician fee schedule practice expense methodology.
Stephanie Frilling, (410) 786-4507, or Erin Smith, (410) 786-0763, for 
issues related to the incentive payment programs for primary care and 
general surgery services, and payment for the annual wellness visit and 
preventive services.
Cheryl Gilbreath, (410) 786-5919, for issues related to payment for 
covered outpatient drugs and biologicals.
Roechel Kujawa, (410) 786-9111, for issues related to ambulance 
services.
Glenn McGuirk, (410) 786-5723, for clinical laboratory issues.
Randall Ricktor, (410) 786-4632, for Federally Qualified Health Center 
Issues.
Pauline Lapin, (410) 786-6883, for issues related to the chiropractic 
services demonstration BN issue.
Troy Barsky, (410) 786-8873, or Kristin Bohl, (410) 786-8680, for 
issues related to physician self-referral.

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Troy Barsky, (410) 786-8873, or Fred Grabau (410) 786-0206, for issues 
related to timely filing rules.
Henry Richter, (410) 786-4562, or Lisa Hubbard, (410) 786-5472, for 
issues related to renal dialysis provisions and payments for end-stage 
renal disease facilities.
Diane Stern, (410) 786-1133, for issues related to the physician 
quality reporting initiative and incentives for e-prescribing.
Sheila Roman, (410) 786-6004, or Pamela Cheetham, 410-786-2259, for 
issues related to the Physician Resource Use Feedback Program and 
value-based purchasing.
Joel Kaiser, (410) 786-4499, for issues related to the DME provisions.
Sandra Bastinelli, (410) 786-3630, for issues related to provider and 
supplier enrollment issues.
Rebecca Cole, (410) 786-4497, for issues related to physician payment 
not identified above.

SUPPLEMENTARY INFORMATION: Comment Subject Areas: We will consider 
comments on the following subject areas discussed in this final rule 
with comment period that are received by the date and time indicated in 
the DATES section of this final rule with comment period:
    (1) The interim final work, practice expense, and malpractice RVUs 
(including the direct practice expense (PE) inputs and the equipment 
utilization rate assumption, and the applicability of a multiple 
procedure payment reduction (MPPR)), for new and revised CY 2011 HCPCS 
codes. These codes and their CY 2011 interim final RVUs are listed in 
Addendum C to this final rule with comment period.
    (2) The physician self-referral designated health services codes 
listed in Tables 98 and 99.
    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 regulations impact appears throughout the 
preamble and, therefore, is not discussed exclusively in section XI. 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 (MP) 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
    D. Public Comments Received in Response to the CY 2011 PFS 
Proposed Rule
II. Provisions of the Final Rule for the Physician Fee Schedule
    A. Resource-Based Practice Expense (PE) Relative Value Units 
(RVUs)
    1. Overview
    2. Practice Expense Methodology
    a. Direct Practice Expense
    b. Indirect Practice Expense per Hour Data
    c. Allocation of PE to Services
    (i) Direct costs
    (ii) Indirect costs
    d. Facility and Nonfacility Costs
    e. Services with Technical Components (TCs) and Professional 
Components (PCs)
    f. Alternative Data Sources and Public Comments on Final Rule 
for 2010
    g. PE RVU Methodology
    (1) Setup File
    (2) Calculate the Direct Cost PE RVUs
    (3) Create the Indirect Cost PE RVUs
    (4) Calculate the Final PE RVUs
    (5) Setup File Information
    (6) Equipment Cost per Minute
    3. PE Revisions for CY 2011
    a. Equipment Utilization Rate
    b. HCPCS Code-Specific PE Issues
    (1) Biohazard Bags
    (2) PE Inputs for Professional Component (PC) Only and Technical 
Component (TC) Only Codes Summing to Global Only Codes
    (3) Equipment Time Inputs for Certain Diagnostic Tests
    (4) Cobalt-57 Flood Source
    (5) Venom Immunotherapy
    (6) Equipment Redundancy
    (7) Equipment Duplication
    (8) Establishing Overall Direct PE Supply Price Inputs Based on 
Unit Prices and Quantities
    c. AMA RUC Recommendations in CY 2010 for Changes to Direct PE 
Inputs
    (1) Electrogastrography and Esophageal Function Test
    (2) 64-Slice CT Scanner and Software
    (3) Breath Hydrogen Test
    (4) Radiographic Fluoroscopic Room
    (5) Cystometrogram
    d. Referral of Existing CPT Codes for AMA RUC Review
    e. Updating Equipment and Supply Price Inputs for Existing Codes
    f. Other Issues
    B. Malpractice Relative Value Units (RVUs)
    1. Background
    2. Malpractice RVUs for New and Revised Services Effective 
Before the Next 5-Year Review
    3. Revised Malpractice RVUs for Selected Disc Arthroplasty 
Services
    C. Potentially Misvalued Services Under the Physician Fee 
Schedule
    1. Valuing Services Under the PFS
    2. Identifying, Reviewing, and Validating the RVUs of 
Potentially Misvalued Services Under the PFS
    a. Background
    b. Progress in Identifying and Reviewing Potentially Misvalued 
Codes
    c. Validating RVUs of Potentially Misvalued Codes
    3. CY 2011 Identification and Review of Potentially Misvalued 
Services
    a. Codes on the Multispecialty Points of Comparison List
    b. Codes with Low Work RVUs Commonly Billed in Multiple Units 
Per Single Encounter
    c. Codes with High Volume and Low Work RVUs
    d. Codes with Site-of-Service-Anomalies
    e. Codes with ``23-hour'' Stays
    4. Expanding the Multiple Procedure Payment Reduction (MPPR) 
Policy to Additional Nonsurgical Services
    a. Background
    b. CY 2011 Expansion of the Imaging Technical Component MPPR 
Policy to Additional Combinations of Imaging Services
    c. CY 2011 Expansion of the MPPR Policy to Therapy Services
    5. High Cost Supplies
    a. Background
    b. Future Updates to the Prices of High-Cost Supplies
    D. Geographic Practice Cost Indices (GPCIs)
    1. Background
    2. GPCI Update
    a. Physician Work GPCIs
    b. Practice Expense GPCIs
    (1) The Affordable Care Act Requirements for PE GPCIs
    (A) General Methodology for the CY 2011 GPCIs
    (B) Phase-In of PE GPCIs
    (C) Data Analysis
    (D) Determining the PE GPCI Cost Share Weights
    (E) PE GPCI Floor for Frontier States
    (2) Summary of CY 2011 PE GPCIs
    c. Malpractice GPCIs
    d. Public Comments and CMS Responses on the Proposed 6th GPCI 
Update
    e. Summary of Final CY 2011 GPCIs

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    3. Payment Localities
    E. PFS Update for CY 2010: Rebasing and Revising of the Medicare 
Economic Index (MEI)
    1. Background
    2. Use of More Current Data
    3. Rebasing and Revising Expense Categories in the MEI
    a. Developing the Weights for Use in the MEI
    b. Physician's Own Time
    c. Physician's Practice Expenses
    (1) Nonphysician Employee Compensation
    (2) Office Expenses
    (3) Professional Liability Insurance (PLI) Expense
    (4) Medical Equipment Expenses
    (5) Medical Supplies Expenses
    (6) Other Professional Expenses
    4. Selection of Price Proxies for Use in the MEI
    a. Cost (Expense) Categories in the MEI
    (1) Physician's Own Time (Physician Compensation)
    (2) Nonphysician Employee Compensation
    (3) Utilities
    (4) Chemicals
    (5) Paper
    (6) Rubber and Plastics
    (7) Telephone
    (8) Postage
    (9) All Other Services
    (10) All Other Products
    (11) Fixed Capital
    (12) Moveable Capital
    (13) Professional Liability Insurance (PLI)
    (14) Medical Equipment
    (15) Medical Materials and Supplies
    (16) Other Professional Expenses
    (b) Productivity Adjustment to the MEI
    5. Results of Rebasing
    6. Medicare Economic Index Technical Advisory Panel
    7. Summaries of Comments and the Associated Responses
    a. Timing of Rebasing and Revising the MEI
    b. PPIS Data
    c. Office Expenses
    d. Purpose of the MEI
    e. Technical Panel
    f. Other
    8. Adjustments to the RVU Shares To Match the Proposed Rebased 
MEI Weights
    F. Allowed Expenditures for Physicians' Services and the 
Sustainable Growth Rate
    1. Medicare Sustainable Growth Rate
    2. Physicians' Services
    3. Preliminary Estimate of the SGR for 2011
    4. Revised Sustainable Growth Rate for 2010
    5. Final Sustainable Growth Rate for 2009
    6. Calculation of 2011, 2010, and 2009 Sustainable Growth Rates
    a. Detail on the CY 2011 SGR
    (1) Factor 1 Changes in Fees for Physicians' Services (Before 
Applying Legislative Adjustments) for CY 2011
    (2) Factor 2 The Percentage Change in the Average Number of Part 
B Enrollees From CY 2010 to CY 2011
    (3) Factor 3 Estimated Real Gross Domestic Product Per Capita 
Growth in 2011
    (4) Factor 4 Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2011 
Compared With CY 2010
    b. Detail on the CY 2010 SGR
    (1) Factor 1 Changes in Fees for Physicians' Services (Before 
Applying Legislative Adjustments) for 2010
    (2) Factor 2 The Percentage Change in the Average Number of Part 
B Enrollees from CY 2009 to CY 2010
    (3) Factor 3 Estimated Real Gross Domestic Product Per Capita 
Growth in CY 2010
    (4) Factor 4 Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2010 
Compared With CY 2009
    c. Detail on the CY 2009 SGR
    (1) Factor 1 Changes in Fees for Physicians' Services (Before 
Applying Legislative Adjustments) for 2009
    (2) Factor 2 The Percentage Change in the Average Number of Part 
B Enrollees from CY 2008 to CY 2009
    (3) Factor 3 Estimated Real Gross Domestic Product Per Capita 
Growth in CY 2009
    (4) Factor 4 Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2009 
Compared With CY 2008
    G. The Update Adjustment Factor (UAF)
    1. Calculation under Current Law
    H. Physician and Anesthesia Fee Schedule Conversion Factors for 
CY 2011
    1. Physician Fee Schedule Update and Conversion Factor
    a. CY 2011 PFS Update
    b. CY 2011 PFS Conversion Factor
    2. Anesthesia Conversion Factor
III. Code-Specific Issues for the PFS
    A. Therapy Services
    1. Outpatient Therapy Caps for CY 2011
    2. Alternatives to Therapy Caps
    a. Background
    b. Current Activities
    c. Potential Short-Term Approaches to Therapy Caps
    B. Diabetes Self-Management Training (DSMT) Services (HCPCS 
Codes G0108 and G0109)
    1. Background
    2. Payment for DSMT Services
    C. End-Stage Renal Disease Related Services for Home Dialysis 
(CPT code 90963, 90964, 90965, and 90966)
    1. End-Stage Renal Disease Home Dialysis Monthly Capitation 
Payment Services (CPT codes 90963, 90964, 90965, and 90966)
    2. Daily and Monthly ESRD-Related Services (CPT Codes 90951 
through 90970)
    D. Portable X-Ray Set-Up (HCPCS code Q0092)
    E. Pulmonary Rehabilitation Services (HCPCS Code G0424)
    F. Application of Tissue Cultured Skin Substitutes to Lower 
Extremities (HCPCS Codes G0440 and G0441)
    G. Canalith Repositioning (CPT code 95992)
    H. Intranasal/Oral Immunization Codes (CPT codes 90467, 90468, 
90473, and 90474)
    I. Refinement Panel Process
    J. Remote Cardiac Monitoring Services (CPT codes 93012, 93229, 
93268, and 93271)
IV. Medicare Telehealth Services for the Physician Fee Schedule
    A. Billing and Payment for Telehealth Services
    1. History
    2. Current Telehealth Billing and Payment Policies
    B. Requests for Adding Services to the List of Medicare 
Telehealth Services
    C. Submitted Requests for Addition to the List of Telehealth 
Services for CY 2011
    1. Individual KDE Services
    2. Individual DSMT Services
    3. Group KDE, MNT, DSMT, and HBAI Services
    4. Initial, Subsequent, and Discharge Day Management Hospital 
Care Services
    5. Initial, Subsequent, Discharge Day Management, and Other 
Nursing Facility Care Services
    6. Neuropsychological Testing Services
    7. Speech-Language Pathology Services
    8. Home Wound Care Services
    9. Other Issues
    D. Summary of CY 2011 Telehealth Policies
    E. Telehealth Originating Site Facility Fee Payment Amount 
Update
V. Addressing Interim Final Relative Value Units from CY 2010 and 
Establishing Interim Relative Value Units for CY 2011
    A. Background
    B. Addressing Interim Final RVUs from CY 2010
    1. CY 2010 Interim Final Work RVUs Referred to the Refinement 
Panel
    2. CY 2010 Interim Final RVUs for which Public Comments Were 
Received
    a. Insertion of Breast Prosthesis (CPT code 19340)
    b. Computed Tomographic Colonography (CPT code 74261)
    c. Myocardial Perfusion Imaging (CPT codes 78451, 78452, 78453, 
and 78454)
    d. Nerve Conduction Test (CPT code 95905)
    e. Kidney Disease Education Services (HCPCS codes G0420 and 
G0421)
    f. Excision of Soft Tissue and Bone Tumors (CPT codes 21011 
through 21016, 21552, 21554 through 21558, 21930 through 21933, 
21395, 21936, 22900 through 22905, 23071, 23073, 23075 through 
23078, 23200, 23210, 23220, 24071, 24073, 24075 through 24077, 
24079, 24150 through 24153, 25071, 25073, 25075 through 25078, 
25170, 26111, 26113, 26115 through 26118, 26250, 26255, 26260, 
26262, 27043, 27045, 27047 through 27049, 27059, 27075 through 
27078, 27327 through 27329, 27337, 27339, 27364, 27365, 27615, 
27616, 27618, 27619, 27632, 27634, 27619, 27645 through 27647, 
28039, 28041, 28043, 28045 through 28047, 28171, 28173, and 28175)
    g. Cryoablation of Prostate (CPT code 55873)
    h. Urodynamics Studies (CPT Codes 51728 and 51729)
    i. Coronary Computed Tomographic Angiography (CPT codes 75571, 
75572, 75573, and 75574)

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    j. Adjacent Tissue Transfer or Rearrangement (CPT codes 14301 
and 14302)
    k. Insertion of a Temporary Prostatic Urethral Stent (CPT code 
53855)
    l. High Dose Rate Brachytherapy (CPT codes 77785, 77786, and 
77787)
    m. Injection of Facet Joint (CPT codes 64490, 64491, 64492, 
64493, 64494, and 64495)
    n. Knee Arthroscopy (CPT code 29870)
    3. Status of Interim Final Work RVUs for Potentially Misvalued 
Site-of-Service Anomaly Codes from CY 2009 and CY 2010
    4. Other New, Revised, or Potentially Misvalued Codes with CY 
2010 Interim Final RVUs Not Specifically Discussed in the CY 2011 
Final Rule with Comment Period
    C. Establishment of Interim Final RVUs for CY 2011
    1. Establishment of Interim Final Work RVUs for CY 2011
    a. Background
    b. CY 2011 Interim Final Work RVUs for New and Revised Codes
    (i) CY 2011 New and Revised Codes that Do Not Represent Major 
New Comprehensive Services
    (1) Excision and Debridement (CPT codes 11010, 11011, 11012, 
11042, 11043, 11044, 11045, 11046, 11047, and 97598)
    (2) Arthrodesis Including Discectomy (CPT code 22551)
    (3) Strapping Lower Extremity (CPT codes 29540 and 29550)
    (4) Paraesophageal Hernia Procedures (CPT codes 43333 and 43335)
    (5) Vaginal Radiation Afterloading Apparatus for Clinical 
Brachytherapy (CPT codes 57155 and 57156)
    (6) Vagus Nerve Stimulator (CPT codes 61885, 64568, 64569, and 
64570)
    (7) Ultrasound of Extremity (CPT codes 76881 and 76882)
    (8) Evaluation of Fine Needle Aspirate (CPT code 88172)
    (9) Immunization Administration (CPT code 90460 and 90461)
    (10) Diabetic Retinopathy Imaging (CPT code 92228)
    (11) Speech-Language Pathology Services (CPT codes 92508 and 
92606)
    (12) Sleep Testing (CPT codes 95806 and 95807)
    (13) Subsequent Hospital Observation Care
    (ii) Comprehensive Codes for a Bundle of Existing Component 
Services
    (iii) Work Budget Neutrality for Clinical Categories of CPT 
Codes
    c. CY 2011 Interim Final Work RVUs for Potentially Misvalued 
Codes
    (1) Excision and Debridement (CPT codes 11043 and 11044)
    (2) Strapping Lower Extremity (CPT code 29540)
    (3) Control Nasal Hemorrhage (CPT code 30901)
    (4) Cystourethroscopy (CPT codes 52281 and 52332)
    (5) Vaginal Radiation Afterloading Apparatus for Clinical 
Brachytherapy (CPT code 51755)
    (6) Obstetrical Care Codes (CPT codes 59440, 59410, 59510, 
59515, 59610, 59614, 59618, and 59622)
    (7) Vagus Nerve Stimulator (CPT code 61885)
    (8) Transforaminal Epidural Injection (CPT code 64483)
    (9) CT Thorax (CPT code 71250)
    (10) CT Spine (CPT code 72125)
    (11) CT Upper and CT Lower Extremity (CPT code 73200 and 73700)
    (12) Radiation Treatment Management (CPT code 77427)
    2. Establishment of Interim Final Direct PE Inputs for CY 2011
    a. Background
    b. CY 2011 Interim Final Direct PE Inputs for New, Revised, and 
Potentially Misvalued Codes
    (1) General Equipment Time
    (2) Equipment Time and Clinical Labor for Conscious Sedation
    (3) Equipment Time for Add-On Codes
    (4) Changes in Standard Uses of Certain Supplies
    (5) New Supply and Equipment Items
    (6) Endovascular Revascularization Stents
    (7) Nasal/Sinus Endoscopy Supply and Equipment Items
    3. Establishment of Interim Final Malpractice RVUs for CY 2011
VI. Provisions of the Affordable Care Act
    A. Section 3002: Improvements to the Physician Quality Reporting 
System
    B. Section 3003: Improvements to the Physician Feedback Program 
and Section 3007: Value-based payment modifier under the physician 
fee schedule
    1. Background
    2. Effect of the ACA of 2010 on the Program
    3. Phase II Proposed Changes
    4. Implementation of Sections 3003 and 3007 of ACA
    5. Comments Sought on Specific Statistical Issues Related to ACA 
Sections 3003 and 3007
    a. Risk Adjustment
    b. Attribution
    c. Benchmarking and Peer Groups
    d. Cost and Quality Measures and Compositing Methods
    C. Section 3102: Extension of the Work Geographic Index Floor 
and Revisions to the Practice Expense Geographic Adjustment under 
the Medicare Physician Fee Schedule, and Protections for Frontier 
States as amended by Section 10324
    D. Section 3103: Extension of Exceptions Process for Medicare 
Therapy Caps
    E. Section 3104: Extension of Payment for Technical Component of 
Certain Physician Pathology Services
    F. Section 3105 and 10311: Extension of Ambulance Add-Ons
    1. Amendment to Section 1834(l)(13) of the Act
    2. Amendment to Section 146(b)(1) of MIPAA
    3. Amendment to Section 1834(l)(12) of the Act
    G. Section 3107: Extension of Physician Fee Schedule Mental 
Health Add-On
    H. Section 3108: Permitting Physician Assistants to Order Post-
Hospital Extended Care Services
    I. Section 3111: Payment for Bone Density Tests
    J. Section 3114: Improved Access for Certified Nurse-Midwife 
Services
    K. Section 3122: Extension of Medicare Reasonable Costs Payments 
for Certain Clinical Diagnostic Laboratory Tests Furnished to 
Hospital Patients in Certain Rural Areas
    L. Section 3134: Misvalued Codes Under the Physician Fee 
Schedule
    M. Section 3135: Modification of Equipment Utilization Factor 
for Advanced Imaging Services
    1. Adjustment in Practice Expense to Reflect Higher Presumed 
Utilization
    2. Adjustment in Technical Component ``Discount'' on Single-
Session Imaging to Consecutive Body Parts
    N. Section 3136: Revision for Payment for Power-Driven 
Wheelchairs
    1. Payment Rules for Power Wheelchairs
    2. Revision of Payment Amounts for Power Wheelchairs
    3. Elimination of Lump Sum Payment for Standard Power 
Wheelchairs
    O. Section 3139: Payment for Biosimilar Biological Products
    P. Section 3401: Revision of Certain Market Basket Updates and 
Incorporation of Productivity Improvements into Market Basket 
Updates That Do Not Already Incorporate Such Improvements
    1. ESRD Market Basket Discussion
    2. Productivity Adjustment regarding Ambulatory Surgical Center, 
Ambulance, Clinical Laboratory and DMEPOS Fee Schedules
    a. Ambulatory Surgery Centers (ASCs)
    b. Ambulance Fee Schedule (AFS)
    c. Clinical Lab Fee Schedule
    d. DMEPOS Fee Schedule
    Q. Section 4103: Medicare Coverage of Annual Wellness Visit 
Providing a Personalized Prevention Plan
    1. Background and Statutory Authority
    a. Medicare Coverage of Preventive Physical Examinations and 
Routine Checkups
    b. Requirements for Coverage of an Annual Wellness Visit
    2. Regulatory Revisions--Summary of Proposed Rule and Comments
    a. Revisions to Sec.  411.15, Particular Services Excluded from 
Coverage
    b. Revisions to Part 410, Subpart B--Medical and Other Health 
Services
    (1) Definitions
    (2) Requirements of the First Annual Wellness Visit Providing 
Personalized Prevention Plan Services
    (3) Requirements of Subsequent Annual Wellness Visits Providing 
Personalized Prevention Plan Services
    3. Payment for the Annual Wellness Visit Providing Personalized 
Prevention Plan Services (PPPS)
    R. Section 4104: Removal of Barriers to Preventive Services in 
Medicare
    1. Definition of ``Preventive Services''
    2. Deductible and Coinsurance for Preventive Services
    3. Extension of Waiver of Deductible to Services Furnished in 
Connection With or in Relation to a Colorectal Cancer Screening Test 
that Becomes Diagnostic or Therapeutic

[[Page 73174]]

    S. Section 5501: Expanding Access to Primary Care Services and 
General Surgery Services
    1. Section 5501(a): Incentive Payment Program for Primary Care 
Services
    a. Background
    b. Primary Care Incentive Payment Program (PCIP)
    (1) Primary Specialty Designation
    (2) Primary Care Percentage Calculation
    (3) Period of Claims Data for Primary Care Percentage 
Calculation
    (4) PCIP Payment
    (5) Summary of Final PCIP Policies
    2. Section 5501(b): Incentive Payment Program for Major Surgical 
Procedures Furnished in Health Professional Shortage Areas
    a. Background
    b. HPSA Surgical Incentive Payment Program (HSIP)
    3. Sections 5501(a) and (b) of the Affordable Care Act and 
Payment for Critical Access Hospital Professional Services Under the 
Optional Method
    T. Section 6003: Disclosure Requirements for In-Office Ancillary 
Services Exception to the Prohibition on Physician Self-Referral for 
Certain Imaging Services
    1. Background
    2. Disclosure Requirement
    a. Services the Trigger the Disclosure Requirement
    b. General Disclosure Requirements
    c. List of Alternate Suppliers
    d. Documentation of Disclosure
    e. Effective Date
    f. Other comments
    U. Section 6404: Maximum Period for Submission of Medicare 
Claims Reduced to Not More than 12 Months
    1. Background
    2. Provisions of ACA
    V. Section 6410 of the Affordable Care Act and Section 154 of 
MIPPA: Adjustments to the Metropolitan Statistical Areas (MSA) for 
Medicare Durable Medical Equipment, Prosthetics, Orthotics, and 
Supplies Competitive Acquisition Program
    1. Background
    2. Subdividing Large MSAs under Round 2
    3. Exclusions of Certain Areas after Round 2 and Prior to 2015
    4. Expansion of Round 2
    W. Section 10501(i)(3): Collection of HCPCS data for Development 
and Implementation of a Prospective Payment System for the Medicare 
Federally Qualified Health Center Program
VII. Other Provisions of the Final Rule
    A. Part B Drug Payment: Average Sales Price (ASP) Issues
    1. ``Carry Over'' ASP
    2. Partial Quarter ASP Data
    3. Determining the Payment Amount for Drugs and Biologicals 
Which Include Intentional Overfill
    4. WAMP/AMP
    5. AMP Threshold and Price Substitutions
    6. Out of Scope Comments
    B. Ambulance Fee Schedule: Policy for Reporting Units when 
Billing for Ambulance Fractional Mileage
    1. History of Medicare Ambulance Services
    a. Statutory Coverage of Ambulance Services
    b. Medicare Regulations for Ambulance Services
    2. Mileage Reporting--Summary of the Provisions of the CY 2011 
Proposed Rule
    a. Background and Current Process for Reporting Ambulance 
Mileage
    b. Concerns Regarding the Potential for Inaccuracies in 
Reporting Units and Associated Considerations
    c. Billing of Fractional Units for Mileage
    3. Analysis of and Responses to Public Comments
    a. Basis for Reconsideration of the Ambulance Mileage Reporting 
Requirements
    b. Appropriateness of Fractional Mileage Reporting Policy
    (1) Financial Impact of Fractional Mileage Policy
    c. Administrative Impact
    (2) Technical and Other Considerations
    (A) Ability to Measure Fractional Miles
    (B) Ambulance Provider versus Supplier Billing
    (C) Billing Software
    (D) Enforcement and Compliance
    (E) Air Ambulance
    (F) Miscellaneous Comments
    4. Applicability of the Fractional Billing Policy to Other 
Services
    5. Final Fractional Mileage Billing Policy
    C. Clinical Laboratory Fee Schedule: Signature on Requisition
    D. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration
    E. Provisions Related to Payment for Renal Dialysis Services 
Furnished by End-Stage Renal Disease (ESRD) Facilities
    (1) Update to the Drug Add-on Adjustment to the Composite Rate
    (2) Estimating Per Patient Growth
    (3) Update to the Drug Add-on Adjustment
    (4) Update to the Geographic Adjustments to the Composite Rate
    (5) Updates to Core-Based Statistical Area (CBSA) Definitions
    (6) Updated Wage Index Values
    (7) Wage index Values for Areas With No Hospital Data
    (8) Reduction to the ESRD Wage Index Floor
    (9) Budget Neutrality Adjustment
    (10) ESRD Wage Index Tables
    F. Issues Related to the Medicare Improvements for Patients and 
Providers Act of 2008 (MIPPA)
    1. Section 131: Physician Payment, Efficiency, and Quality 
Improvements--Physician Quality Reporting System
    a. Program Background and Statutory Authority
    b. Incentive Payments for the 2011 Physician Quality Reporting 
System
    c. 2011 Reporting Periods for Individual Eligible Professionals
    d. 2011 Physician Quality Reporting System Reporting Mechanisms 
for Individual Eligible Professionals
    (1) Final Requirements for Individual Eligible Professionals Who 
Choose the Claims-based Reporting Mechanism
    (2) Final Requirements for Individual Eligible Professionals Who 
Choose the Registry-based Reporting Mechanism
    (3) Final Requirements for Individual Eligible Professionals Who 
Choose the EHR based Reporting Mechanism
    (4) Final Qualification Requirements for Registries
    (5) Final Qualification Requirements for EHR Vendors and Their 
Products
    e. Criteria for Satisfactory Reporting of Individual Quality 
Measures for Individual Eligible Professionals
    f. Criteria for Satisfactory Reporting Measures Groups for 
Individual Eligible Professionals
    g. Reporting Option for Satisfactory Reporting on Quality 
Measures by Group Practices
    (1) Background and Authority
    (2) Definition of ``Group Practice''
    (3) Process for Physician Group Practices to Participate as 
Group Practices and Criteria for Satisfactory Reporting
    A. Group Practice Reporting Option for Physician Group Practices 
with 200 or More NPIs GPRO I
    B. Group Practice Reporting Option for Group Practices of 2-199 
NPIs--GPRO-II
    h. Statutory Requirements and Other Considerations for 2011 
Physician Quality Reporting System Measures
    (1) Statutory Requirements for 2011 Physician Quality Reporting 
System Measures
    (2) Other Considerations for 2011 Physician Quality Reporting 
System Measures
    (3) Summary of Comments and Responses
    i. The Final 2011 Physician Quality Reporting System Quality 
Measures for Individual Eligible Professionals
    (1) 2011 Individual Quality Measures Selected From the 2010 
Physician Quality Reporting System Quality Measures Set Available 
for Claims based Reporting and Registry-based Reporting
    (2) 2011 Individual Quality Measures Selected From the 2010 
Physician Quality Reporting System Quality Measures Set Available 
for Registry-based Reporting Only
    (3) New Individual Quality Measures for 2011
    (4) 2011 Measures Available for EHR-based Reporting
    (5) Measures Proposed for Inclusion in 2011 Measures Groups
    j. 2011 Physician Quality Reporting System Quality Measures for 
Group Practices Selected to Participate in the Group Practice 
Reporting Option (GPRO I)
    k. Public Reporting of Physician Quality Reporting System Data
    l. Other Relevant ACA Provisions
    (1) Section 3002 (b)--Incentive Payment Adjustment for Quality 
Reporting
    (2) Section 3002(c)--Maintenance of Certification Programs and 
Section 10327 Improvements to the Physician Quality Reporting System
    (3) Section 3002(d)--Integration of Physician Quality Reporting 
and EHR Reporting
    (4) Section 3002(e)--Feedback
    (5) Section 3002(f)--Appeals
    2. Section 132: Incentives for Electronic Prescribing (eRx)- The 
Electronic Prescribing Incentive Program

[[Page 73175]]

    a. Program Background and Statutory Authority
    b. The 2011 eRx Incentive
    (1) The 2011 Reporting Period for the eRx Incentive Program
    (2) Criteria for Determination of Successful Electronic 
Prescriber for Eligible Professionals
    (A) Reporting the Electronic Prescribing Measure
    (B) The Reporting Denominator for the Electronic Prescribing 
Measure
    (C) Qualified Electronic Prescribing System--Required 
Functionalities and Part D eRx Standards
    (D) The Reporting Numerator for the Electronic Prescribing 
Measure
    (E) Criteria for Successful Reporting of the Electronic 
Prescribing Measure
    (3) Determination of the 2011 Incentive Payment Amount for 
Individual Eligible Professionals Who Are Successful Electronic 
Prescribers
    (4) Reporting Option for Satisfactory Reporting of the 
Electronic Prescribing Measure by Group Practices
    (A) Definition of ``Group Practice''
    (B) Process for Group Practices to Participate as Group 
Practices and Criteria for Successful Reporting of the Electronic 
Prescribing Measure by Group Practices
    c. The 2012 eRx Payment Adjustment
    (1) The eRx Payment Adjustment Reporting Period
    (2) Criteria for Determining Applicability of the 2012 eRx 
Payment Adjustment to Individual Eligible Professionals
    (3) Criteria for Determining Applicability of the 2012 eRx 
Payment Adjustment to Group Practices
    (4) Significant Hardship Exemption
    d. The 2013 eRx Payment Adjustment
    e. Public Reporting of Names of Successful Electronic 
Prescribers
    G. DMEPOS Provisions
    1. Medicare Durable Medical Equipment, Prosthetics, Orthotics, 
and Supplies (DMEPOS) Competitive Bidding Program (CBP)
    a. Legislative and Regulatory History of DMEPOS CBP
    b. Implementation of a National Mail Order DMEPOS Competitive 
Bidding Program (CBP) for Diabetic Testing Supplies
    (1) Future Competitions for Diabetic Testing Supplies
    (2) Definition of Mail Order Item
    (3) Special Rule in Case of Competition for Diabetic Testing 
Strips
    (4) Anti-switching Rule in Case of Competition for Diabetic Test 
Strips
    c. Off-the-Shelf (OTS) Orthotics Exemption
    d. Grandfathering Rules Resulting in Additional Payments to 
Contract Suppliers under the DMEPOS Competitive Bidding Program 
(CBP)
    e. Appeals Process
    (1) Purpose and Definitions: (Sec.  414.402)
    (2) Applicability
    (3) Contract Termination
    (4) Notice of Termination
    (5) Corrective Action Plan
    (6) Right to Request a Hearing by the CBIC Hearing Officer (HO)
    (7) Scheduling of the Hearing
    (8) Burden of Proof
    (9) Role of the Hearing Officer (HO)
    (10) CMS's Final Determination
    (11) Effective Date of the Contract Termination
    (12) Effect of Contract Termination
    2. Changes to Payment Rules for Oxygen and Oxygen Equipment
    a. Background
    b. Furnishing Oxygen Equipment after the 36-Month Rental Period 
(CAP)
    c. Furnishing Oxygen Equipment during the 36-Month Rental Period 
(CAP)
    H. Provider and Supplier Enrollment Issue: Air Ambulance 
Provision
    I. Technical Corrections
    1. Physical Therapy, Occupational Therapy and Speech-language 
Pathology
    2. Scope of Benefits
    J. Physician Self-Referral Prohibition: Annual Update to the 
List of CPT/HCPCS Codes
    1. General
    2. Annual Update to the Code List
    a. Background
    b. Response to Comments
    c. Revisions Effective for 2011
VIII. Waiver of Proposed Rulemaking and Delay in Effective Date
IX. Collection of Information Requirements
    A. ICRs Regarding Diagnostic X-ray Tests, Diagnostic Laboratory 
Tests, and Other Diagnostic Tests: Conditions (Sec.  410.32)
    B. ICRs Regarding General Exceptions to the Referral Prohibition 
Related to Both Ownership/Investment and Compensation (Sec.  
411.355)
    C. ICRs Regarding Appeals Process for Termination of Competitive 
Bidding Contract (Sec.  414.423)
    D. ICRs Regarding Additional Provider and Supplier Requirements 
for Enrolling and Maintaining Active Enrollment status in the 
Medicare Program (Sec.  424.516)
    E. Additional Information Collection Requirements
    1. Part B Drug Payment
    2. Physician Quality Reporting Initiative (PQRI)
    3. Electronic Prescribing (eRx) Incentive Program
X. Response to Comments
XI. Regulatory Impact Analysis
    A. RVU Impacts
    1. Resource Based Work, PE, and Malpractice RVUs
    2. CY 2011 PFS Impact Discussion
    a. Changes in RVUs
    b. Combined Impact
    B. Geographic Practice Cost Indices (GPCIs)
    C. Rebasing and Revising of the MEI
    D. The Affordable Care Act Provisions
    1. Section 3002: Improvements to the Physician Quality Reporting 
System
    2. Sections 3003 and 3007: Improvements to the Physician 
Feedback Program and Value-Based Payment Under the Physician Fee 
Schedule
    2. Section 3103: Extension of Exceptions Process for Medicare 
Therapy Caps
    3. Section 3102: Extension of the Work Geographic Index Floor 
and Revisions to the Practice Expense Geographic Adjustment under 
the Medicare Physician Fee Schedule, and Protections for Frontier 
States as amended by Section 10324
    4. Section 3103: Extension of Exceptions Process for Medicare 
Therapy Caps
    5. Section 3104: Extension of Payment for Technical Component of 
Certain Physician Pathology Services
    6. Sections 3105 and 10311: Extension of Ambulance Add-Ons
    7. Section 3107: Extension of Physician Fee Schedule Mental 
Health Add-On
    8. Section 3108: Permitting Physician Assistants to Order Post-
Hospital Extended Care Services
    9. Section 3111: Payment for Bone Density Tests
    10. Section 3114: Improved Access for Certified Nurse-Midwife 
Services
    11. Section 3122: Extension of Medicare Reasonable Costs 
Payments for Certain Clinical Diagnostic Laboratory Tests Furnished 
to Hospital Patients in Certain Rural Areas
    12. Section 3134: Misvalued Codes Under the PFS
    13. Section 3135: Modification of Equipment Utilization Factor 
For Advanced Imaging Services
    14. Section 3136: Revisions in Payments for Power Wheelchairs
    15. Section 3139: Payment for Biosimilar Biological Products
    16. Section 3401: Revisions of Certain Market Basket Updates and 
Incorporation of Productivity Adjustments
    17. Section 4103: Medicare Coverage of Annual Wellness Visit 
Providing a Personalized Prevention Plan
    18. Section 4104: Removal of Barriers to Preventive Services in 
Medicare
    19. Section 5501: Expanding Access to Primary Care Services and 
General Surgery Services
    20. Section 6003: Disclosure Requirements for In-office 
Ancillary Services Exception to the Prohibition of Physician Self-
referral for Certain Imaging Services
    21. Section 6404: Maximum Period for Submission of Medicare 
Claims Reduced to Not More Than 12 Months
    22. Section 6410 of Patient Accountability and Affordable Care 
Act and Section 154 of MIPPA: Adjustments to the Metropolitan 
Statistical Areas (MSA) for Medicare Durable Medical Equipment, 
Prosthetics, Orthotics, and Supplies Competitive Acquisition Program
    23. Section 10501(i)(3): Collection of HCPCS Data for the 
Development and Implementation of a Prospective Payment System for 
the Medicare FQHC Program
    E. Other Provisions of the Proposed Regulation
    1. Part B Drug Payment: ASP Issues
    2. Ambulance Fee Schedule: Proposed Policy for Reporting Units 
when Billing for Ambulance Fractional Mileage
    3. Chiropractic Services Demonstration
    4. Renal Dialysis Services Furnished by ESRD Facilities
    5. Section 131(b) of the MIPPA: Physician Payment, Efficiency, 
and Quality Improvements--Physician Quality Reporting System
    6. Section 132 of the MIPPA: Incentives for Electronic 
Prescribing (eRx)--The eRx Incentive Program

[[Page 73176]]

    7. Durable Medical Equipment-Related Issues
    a. Off-the-Shelf (OTS) Orthotics Exemption
    b. Changes to Payment for Oxygen Equipment
    c. Diabetic Testing Supplies
    d. Metropolitan Statistical Areas
    8. Air Ambulance
    F. Alternatives Considered
    G. Impact on Beneficiaries
    H. Accounting Statement

Regulations Text

Addendum A--Explanation and Use of Addendum B
Addendum B--Relative Value Units and Related Information Used In 
Determining Medicare Payments for CY 2011
Addendum C--Codes With Interim RVUS
Addendum D--Final 2011 Geographic Adjustment Factors (GAFS)
Addendum E--Final 2011****Geographic Practice Cost Indicies (GPCIS) 
By State and Medicare Locality
Addendum F--CY 2011 Diagnostic Imaging Services Subject To The 
Multiple Procedure Payment Reduction
Addendum G--CPT/HCPCS Imaging Codes Defined By Section 5102(B) of 
the DRA
Addendum H--CY 2011 ``Always Therapy'' Services* Subject to the 
Multiple Procedure Payment Reduction
Addendum I--[Reserved]
Addendum J--List of CPT1/HCPCS Codes Used to Define Certain 
Designated Health Service Categories \2\ Under Section 1877 of the 
Social Security Act Effective January 1, 2011
Addendum K--CY 2011 ESRD Wage Index For Urban Areas Based On CBSA 
Labor Market Areas
Addendum L-- CY 2011 Wage Index For Rural Areas Based On CBSA Labor 
Market Areas

Acronyms

    In addition, because of the many organizations and terms to which 
we refer by acronym in this proposed rule, we are listing these 
acronyms and their corresponding terms in alphabetical order below:

AA Anesthesiologist assistant
AACVPR American Association of Cardiovascular and Pulmonary 
Rehabilitation
AANA American Association of Nurse Anesthetists
ABMS American Board of Medical Specialties
ABN Advanced Beneficiary Notice
ACA ``Affordable Care Act''
ACC American College of Cardiology
ACGME Accreditation Council on Graduate Medical Education
ACLS Advanced cardiac life support
ACP American College of Physicians
ACR American College of Radiology
ACS American Community Survey
AED Automated external defibrillator
AFROC Association of Freestanding Radiation Oncology Centers
AFS Ambulance Fee Schedule
AHA American Heart Association
AHFS-DI American Hospital Formulary Service-Drug Information
AHRQ [HHS] Agency for Healthcare Research and Quality
AMA American Medical Association
AMA-DE American Medical Association Drug Evaluations
AACE American Association of Clinical Endocrinologists
AADE American Association of Diabetes Educators
AMP Average manufacturer price
AO Accreditation organization
AOA American Osteopathic Association
APA American Psychological Association
APC Administrative Procedures Act
APTA American Physical Therapy Association
ARRA American Recovery and Reinvestment Act (Pub. L. 111-5)
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
AWV Annual Wellness Visit
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)
BPM Benefit Policy Manual
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection 
Act of 2000 (Pub. L. 106-554)
BLS Bureau of Labor Statistics
BN Budget neutrality
BPM Benefit Policy Manual
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
CARE Continuity Assessment Record and Evaluation
CBIC Competitive Bidding Implementation Contractor
CBP Competitive Bidding Program
CBSA Core-Based Statistical Area
CDC Centers for Disease Control and Prevention
CEM Cardiac Event Monitoring
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
CMD Contractor Medical Director
CMHC Community mental health center
CMP Civil money penalty
CMS Centers for Medicare & Medicaid Services
CNS Clinical nurse specialist
CoP Condition of participation
COPD Chronic obstructive pulmonary disease
CORF Comprehensive Outpatient Rehabilitation Facility
COS Cost of service
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPI-U Consumer price index for urban consumers
CPR Cardiopulmonary resuscitation
CPT [Physicians] Current Procedural Terminology (4th Edition, 2002, 
copyrighted by the American Medical Association)
CR Cardiac rehabilitation
CRNA Certified registered nurse anesthetist
CRP Canalith repositioning
CRT Certified respiratory therapist
CSW Clinical social worker
CT Computed Tomography
CTA Computed Tomography Angography
CSC Computer Sciences Corporation
CWF Common Working File
CY Calendar year
DEA Drug Enforcement Agency
DOTPA Development of Outpatient Therapy Alternatives
DHS Designated health services
DHHS Department of Health and Human Services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and 
supplies
DOQ Doctors Office Quality
DOS Date of service
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT Diabetes self-management training
EGC Electrocardiogram
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
eRx Electronic Prescribing
ESO Endoscopy Supplies
ESRD End-stage renal disease
FAA Federal Aviation Administration
FAX Facsimile
 FDA Food and Drug Administration (HHS)
 FFS Fee-for-service
 FOTO Focus On Therapeutic Outcomes
 FQHC Federally Qualified Health Center
 FR Federal Register
 GAF Geographic adjustment factor
 GAO General Accounting Office
 GEM Generating Medicare [Physician Quality Performance Measurement 
Results]
 GFR Glomerular filtration rate
 GPRO Group Practice Reporting Option
 GPO Group purchasing organization
 GPCI Geographic practice cost index
 GPS Geographic Positioning System
 GSA General Services Administration
 HAC Hospital-acquired conditions
 HBAI Health and behavior assessment and intervention
 HCC Hierarchal Condition Category
 HCPAC Health Care Professional Advisory Committee
 HCPCS Healthcare Common Procedure Coding System
 HCRIS Healthcare Cost Report Information System
 HEMS Helicopter Emergency Medical Services
 HDRT High dose radiation therapy

[[Page 73177]]

 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
 HITECH Health Information Technology for Economic and Clinical 
Health Act (Title IV of Division B of the Recovery Act, together 
with Title XIII of Division A of the Recovery Act)
 HITSP Healthcare Information Technology Standards Panel
 HIV Human immunodeficiency virus
 HOPD Hospital outpatient department
 HPSA Health Professional Shortage Area
 HRA Health Risk Assessment
 HRSA Health Resources Services Administration (HHS)
 HSIP HPSA Surgical Incentive Program
 HUD Housing and Urban Development
 IACS Individuals Access to CMS Systems
 ICD International Classification of Diseases
 ICF Intermediate care facilities
 ICF International Classification of Functioning, Disability and 
Health
 ICR Intensive cardiac rehabilitation
 ICR Information collection requirement
 IDTF Independent diagnostic testing facility
 IGI IHS Global Insight, Inc.
 IFC Interim final rule with comment period
 IMRT Intensity-Modulated Radiation Therapy
 IOM Internet Only Manual
 IPCI indirect practice cost index
 IPPE Initial preventive physical examination
 IPPS Inpatient prospective payment system
 IRS Internal Revenue Service
 ISO Insurance services office
 IVD Ischemic Vascular Disease
 IVIG Intravenous immune globulin
 IWPUT Intra-service work per unit of time
 TJC Joint Commission
 JRCERT Joint Review Committee on Education in Radiologic Technology
 KDE Kidney disease education
 LCD Local coverage determination
 MA Medicare Advantage
 MA-PD Medicare Advantage-Prescription Drug Plans
 MAC Medicare Administrative Contractor
 MAV Measure Applicability Validation
 MCMP Medicare Care Management Performance
 MCP Monthly Capitation Payment
 MDRD Modification of Diet in Renal Disease
 MedCAC Medicare Evidence Development and Coverage Advisory 
Committee (formerly the Medicare Coverage Advisory Committee (MCAC))
 MedPAC Medicare Payment Advisory Commission
 MGMA Medical Group Management Association
 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
 MOC Maintenance of certification
 MP Malpractice
 MPC Mulitspecialty Points of Comparison
 MPPR Multiple procedure payment reduction
 MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
 MRA Magnetic Resonance Angiography
 MRI Magnetic Resonance Imaging
 MSA Metropolitan Statistical Area
 MSP Medicare Secondary Payer
 MUE Medically Unlikely Edit
 NCCI National Correct Coding Initiative
 NCD National Coverage Determination
 NCQA National Committee for Quality Assurance
 NCQDIS National Coalition of Quality Diagnostic Imaging Services
 NDC National drug code
 NF Nursing facility
 NISTA National Institute of Standards and Technology Act
 NP Nurse practitioner
 NPI National Provider Identifier
 NPP Nonphysician practitioner
 NQF National Quality Forum
 NBRC National Board for Respiratory Care
 NRC Nuclear Regulatory Commission
 NTSB National Transportation Safety Board
 NUBC National Uniform Billing Committee
 OACT [CMS] Office of the Actuary
 OBRA Omnibus Budget Reconciliation Act
 OCR Optical Character Recognition
 ODF Open door forum
 OES Occupational Employment Statistics
 OGPE Oxygen generating portable equipment
 OIG Office of Inspector General
 OMB Office of Management and Budget
 ONC [HHS] Office of the National Coordinator for Health IT
 OPPS Outpatient prospective payment system
 OSCAR Online Survey and Certification and Reporting
 PA Physician assistant
 PACE Program of All-inclusive Care for the Elderly
 PAT Performance assessment tool
 PC Professional component
 PCI Percutaneous coronary intervention
 PCIP Primary Care Incentive Payment Program
 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
 PGP [Medicare] Physician Group Practice
 PHI Protected health information
 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
PPIS Physician Practice Information Survey
PPPS Personalized Prevention Plan Services
PPS Prospective payment system
PPTA Plasma Protein Therapeutics Association
PQRI Physician Quality Reporting Initiative
PR Pulmonary rehabilitation
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PT Physical therapy
PTCA Percutaneous transluminal coronary angioplasty
PTA Physical therapy assistant
PVBP Physician and Other Health Professional Value-Based Purchasing 
Workgroup
QDCs (Physician Quality Reporting System) Quality Data Codes
RA Radiology assistant
RAC Medicare Recovery Audit Contractor
RBMA Radiology Business Management Association
RFA Regulatory Flexibility Act
RHC Rural health clinic
RHQDAPU Reporting Hospital Quality Data Annual Payment Update 
Program
RIA Regulatory impact analysis
RN Registered nurse
RNAC Reasonable net acquisition cost
RPA Radiology practitioner assistant
RRT Registered respiratory therapist
RUC [AMAs Specialty Society] Relative (Value) Update Committee
RVRBS Resource-Based Relative Value Scale
RVU Relative value unit
SBA Small Business Administration
SCHIP State Children's Health Insurance Programs
SDW Special Disability Workload
SGR Sustainable growth rate
STATS Short Term Alternatives for Therapy Services
SLP Speech-language pathology
SMS [AMAs] Socioeconomic Monitoring System
SNF Skilled nursing facility
SOR System of record
SRS Stereotactic radiosurgery
SSA Social Security Administration
SSI Social Security Income
STARS Services Tracking and Reporting System
STATS Short Term Alternative Therapy Services
TC Technical Component
TIN Tax identification number
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
TTO Transtracheal oxygen
UAF Update Adjustment Factor
UPMC University of Pittsburgh Medical Center
URAC Utilization Review Accreditation Committee
USDE United States Department of Education
USP-DI United States Pharmacopoeia-Drug Information
VA Veterans Administration
VBP Value-based purchasing
WAC Wholesale Acquisition Cost

[[Page 73178]]

WAMP Widely available market price
WHO World Health Organization

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this final rule with comment period, we use CPT codes 
and descriptions to refer to a variety of services. We note that CPT 
codes and descriptions are copyright 2010 American Medical Association. 
All Rights Reserved. CPT is a registered trademark of the American 
Medical Association (AMA). Applicable FARS/DFARS apply.

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) are 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. We note that throughout this final rule with 
comment period, unless otherwise noted, the term ``practitioner'' is 
used to describe both physicians and eligible nonphysician 
practitioners (such as physician assistants, nurse practitioners, 
clinical nurse specialists, certified nurse-midwives, psychologists, or 
social workers) that are permitted to furnish and bill Medicare under 
the PFS for the services under discussion.

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, with appropriate adjustment of the conversion factor (CF), in a 
manner to assure that fee schedule amounts for anesthesia services are 
consistent with those for other services of comparable value. We 
established a separate 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 
our review of recommendations received from the American Medical 
Association's (AMA) Specialty Society Relative Value Update Committee 
(RUC).
2. Practice Expense Relative Value Units (PE RVUs)
    Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 
103-432), enacted on October 31, 1994, amended section 
1848(c)(2)(C)(ii) of the Act and required us to develop resource-based 
PE RVUs for each physicians' 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 physicians' 
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 physicians' 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 
(HOPD). 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 the calendar year (CY) 2007 PFS final rule with comment period 
(71 FR 69624), we revised the methodology for