Medicare Program; Clinical Laboratory Fee Schedule: Signature on Requisition, 38342-38347 [2011-16366]

Agencies

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

[Federal Register Volume 76, Number 126 (Thursday, June 30, 2011)]
[Proposed Rules]
[Pages 38342-38347]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16366]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 410

[CMS-1436-P]
RIN 0938-AR06


Medicare Program; Clinical Laboratory Fee Schedule: Signature on 
Requisition

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would retract the policy adopted in the 
calendar year 2011 Physician Fee Schedule final rule with comment 
period that requires the signature of a physician or qualified non-
physician practitioner on a requisition for clinical diagnostic 
laboratory tests paid under the Clinical Laboratory Fee Schedule 
(CLFS). In addition, this proposed rule would reinstate the prior 
policy that the signature of a physician or qualified non-physician 
practitioner is not required on a requisition for Medicare purposes for 
a clinical diagnostic laboratory test paid under the CLFS.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. eastern daylight 
time (e.d.t.) on August 29, 2011.

ADDRESSES: In commenting, please refer to file code CMS-1436-P. 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-1436-P, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1436-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-8013
    4. By hand or courier. Alternatively, 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) 786-1066 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 close of the 
comment period.

FOR FURTHER INFORMATION CONTACT:  Glenn McGuirk, (410) 786-5723.

SUPPLEMENTARY INFORMATION: 

I. Background

A. History and Overview

    In the March 10, 2000 Federal Register (65 FR 13082), we published 
a proposed rule entitled ``Medicare Program; Negotiated Rulemaking: 
Coverage and Administrative Policies for Clinical Diagnostic Laboratory 
Services,'' to announce and solicit comments on the results of our 
negotiated rulemaking committee tasked to establish national coverage 
and administrative policies for clinical diagnostic laboratory services 
payable under Part B of Medicare.
    In the November 23, 2001 Federal Register (66 FR 58788), we 
published a final rule, which established these national coverage and 
administrative policies. In that final rule, we explained our policy on 
ordering clinical diagnostic laboratory services and revised regulatory 
language in Sec.  410.32. Our regulation at Sec.  410.32(a) includes a 
requirement that states ``[a]ll diagnostic x-ray tests, diagnostic 
laboratory tests, and other diagnostic tests must be ordered by the 
physician who is treating the beneficiary.'' In the November 23, 2001 
final rule (66 FR 58809), we added paragraph (d)(2) to Sec.  410.32 to 
require that the physician or qualified nonphysician practitioner (NPP) 
(that is, clinical nurse specialists, clinical psychologists, clinical 
social workers, nurse-midwives, nurse practitioners, and physician 
assistants) who orders the service must maintain documentation of 
medical necessity in the beneficiary's medical record. In both the 
March 10, 2000 proposed rule (65 FR 13089) and the November 23, 2001 
final rule (66 FR 58802), we noted that ``[w]hile the signature of a 
physician on a requisition is one way of documenting that the treating 
physician ordered the test, it is not the only permissible way of 
documenting that the test has been ordered.'' In the preamble of these 
rules, we described the policy of not requiring physician signatures on 
requisitions for clinical diagnostic laboratory tests, but implicitly 
left in place the existing requirements for a written order to be 
signed by the ordering physician or NPP for clinical diagnostic 
laboratory tests, as well as other types of diagnostic tests. We 
further stated, in the March 10, 2000 proposed rule (65 FR 13089) and 
the November 23, 2001 final rule (66 FR 58802), that we would publish 
instructions to Medicare contractors clarifying that the signature of 
the ordering physician or NPP on a requisition for a clinical 
diagnostic laboratory test, is not required for Medicare purposes.
    On March 5, 2002, we issued a program memorandum (Transmittal AB-
02-030, Change Request 1998) implementing the administrative policies 
set forth in the November 23, 2001 final rule, including the following 
instruction:

    Medicare does not require the signature of the ordering 
physician on a laboratory service requisition. While the signature 
of a physician on a requisition is one way of documenting that the 
treating physician ordered the service, it is not the only 
permissible way of documenting that the service has been ordered. 
For example, the physician may document the ordering of specific 
services in the patient's medical record.

    On January 24, 2003, we issued a program transmittal (Transmittal 
1787, Change Request 2410) to manualize the March 5, 2002 program 
memorandum. The transmittal page stated, ``Section 15021, Ordering 
Diagnostic Tests, manualizes Transmittal AB-02-030, dated March 5, 
2002. In accordance

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with negotiated rulemaking for outpatient clinical diagnostic 
laboratory services, no signature is required for the ordering of such 
services or for physician pathology services.'' In the manual 
instructions in that transmittal (that is, Transmittal 1787), we stated 
in a note: ``No signature is required on orders for clinical diagnostic 
tests paid on the basis of the physician fee schedule or for physician 
pathology services.'' The manual instructions inadvertently omitted the 
reference to clinical diagnostic laboratory tests. Thus, the 
transmittal seemed to extend the policy set forth in the November 23, 
2001 final rule (that no signature is required on requisitions for 
clinical diagnostic laboratory tests paid under the clinical laboratory 
fee schedule (CLFS)) to also apply to clinical diagnostic tests paid on 
the basis of the physician fee schedule (PFS) and physician pathology 
services. In addition, the manual instructions used the term ``order'' 
instead of ``requisition,'' which some members of the industry have 
asserted caused confusion. When we transitioned from paper manuals to 
the current electronic Internet Only Manual (IOM) system, these manual 
instructions were inadvertently omitted from the new Benefit Policy 
Manual (BPM).
    On August 28, 2008, we issued a program transmittal (Transmittal 
94, Change Request 6100) to update the BPM to incorporate language that 
was previously contained in section 15021 of the Medicare Carriers 
Manual. The reissued language stated, ``No signature is required on 
orders for clinical diagnostic tests paid on the basis of the clinical 
laboratory fee schedule, the physician fee schedule, or for physician 
pathology services.'' After the publication of the August 2008 Program 
Transmittal (Transmittal 94), we received numerous inquiries from 
laboratories, diagnostic testing facilities, and hospital 
representatives who had questions about whether the provision applied 
to all diagnostic services, including x-rays, magnetic resonance 
imaging (MRIs), and other nonclinical laboratory fee schedule 
diagnostic services.
    To resolve any existing confusion surrounding the implementation of 
the CLFS policy in 2001 and subsequent transmittals, we restated and 
solicited public comments on our policy in the July 13, 2009 proposed 
rule (74 FR 33641 and 33642), entitled ``Medicare Program; Payment 
Policies Under the Physician Fee Schedule and Other Revisions to Part B 
for CY 2010'' (hereinafter referred to as the CY 2010 PFS proposed 
rule). At that time, our policy was that the signature of a physician 
or NPP was not required on a requisition for clinical diagnostic 
laboratory tests paid on the basis of the CLFS. However, we were clear 
that we would still require that it must be evident, in accordance with 
our regulations at Sec.  410.31(d)(2) and (3), that the physician or 
NPP had ordered the services.
    We clarified that this policy regarding requisitions for clinical 
diagnostic laboratory tests would not supersede other applicable 
Medicare requirements (such as those related to hospital conditions of 
participation (CoPs)), which require the medical record to include an 
order signed by the physician or NPP who is treating the beneficiary. 
In addition, we stated that we did not believe that our policy 
regarding signatures on requisitions for clinical diagnostic laboratory 
tests supersedes other requirements mandated by professional standards 
of practice or obligations regarding orders and medical records 
promulgated by Medicare, the Joint Commission, or State law; nor did we 
believe the policy would require providers to change their business 
practices.
    In the CY 2010 PFS proposed rule (74 FR 33641 and 33642), we also 
restated and solicited public comment on our longstanding policy, 
consistent with the principle in Sec.  410.32(a) that a written order 
for diagnostic tests including those paid under the CLFS and those that 
are not paid under the CLFS (for example, that are paid under the PFS 
or under the OPPS), such as X-rays, MRIs, and the technical component 
(TC) of physician pathology services, must be signed by the ordering 
physician or NPP. We were clear that the policy that signatures are not 
required on requisitions for clinical diagnostic laboratory tests paid 
based on the CLFS applied only to requisitions (as opposed to written 
orders).
    Additionally, in the CY 2010 PFS proposed rule (74 FR 33642) we 
solicited public comments about the distinction between an order and a 
requisition. We noted that an ``order'' as defined in our Internet Only 
Manual (IOM), 100-02, Chapter 15, Section 80.6.1, is a communication 
from the treating physician or NPP requesting that a diagnostic test be 
performed for a beneficiary. The order may conditionally request an 
additional diagnostic test for a particular beneficiary if the result 
of the initial diagnostic test ordered yields a certain value 
determined by the treating physician or NPP (for example, if test X is 
negative, then perform test Y). We further clarified in the CY 2010 PFS 
final rule with comment period (74 FR 61930) that an order may be 
delivered via any of the following forms of communication:
     A written document signed by the treating physician or 
NPP, which is hand-delivered, mailed, or faxed to the testing facility.
     A telephone call by the treating physician or NPP or his 
or her office to the testing facility.
     An electronic mail, or other electronic means, by the 
treating physician or NPP or his or her office to the testing facility.
    If the order is communicated via telephone, both the treating 
physician or NPP, or his or her office, and the testing facility must 
document the telephone call in their respective copies of the 
beneficiary's medical records.
    In the CY 2010 PFS proposed rule (74 FR 33642), we defined a 
``requisition'' as the actual paperwork, such as a form, which is 
furnished to a clinical diagnostic laboratory that identifies the test 
or tests to be performed for a patient. The requisition may contain 
patient information, ordering physician information, referring 
institution information, information on where to send reports, billing 
information, specimen information, shipping addresses for specimens or 
tissue samples, and checkboxes for test selection. We believed the 
requisition was ministerial in nature, assisting laboratories with the 
billing and handling of results, and serves as an administrative 
convenience to providers and patients. We believed that a written 
order, which may be part of the medical record, and the requisition, 
were two different documents, although a requisition that is signed may 
serve as an order.
    During the public comment period for the CY 2010 PFS proposed rule, 
we received numerous comments on these issues. Subsequently, in the CY 
2010 PFS final rule with comment period (74 FR 61931), we stated that 
we would continue to carefully consider the issue of physician 
signatures on requisitions and orders and that we planned to revisit 
these issues in the future.
    In the CY 2011 PFS proposed rule (75 FR 40162 through 40163), we 
proposed to require a physician's or NPP's signature on requisitions 
for clinical diagnostic laboratory tests paid on the basis of the CLFS. 
We stated that we believed this policy would result in a less confusing 
process because a physician's signature would be required for all 
requisitions and orders, eliminating the uncertainty over whether the 
documentation is a requisition or an order, whether the type

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of test being ordered requires a signature, or which payment system 
does or does not require a physician's or NPP's signature. We also 
stated that we believed the requirement would not increase the burden 
on physicians and would be easier for the reference laboratory 
technicians to know whether a test is appropriately requested, which 
would minimize potential compliance problems for laboratories during 
the course of a subsequent Medicare audit because a signature would be 
consistently required. We solicited public comments on the CY 2011 PFS 
proposed rule.
    After careful consideration of all the comments received, we 
finalized our proposed policy without modification to require a 
physician's or NPP's signature on requisitions for clinical diagnostic 
laboratory tests paid under the CLFS in the CY 2011 PFS final rule with 
comment period (75 FR 73483), which became effective on January 1, 
2011. This policy did not affect physicians or NPPs who chose not to 
use requisitions to request clinical diagnostic laboratory tests paid 
under the CLFS. Such physicians or NPPs could continue to request such 
tests by other means, such as by using the annotated medical records, 
documented telephonic requests, or electronic requests.

II. Provisions of the Proposed Rule

    In this proposed rule, we would retract the policy we finalized in 
the CY 2011 PFS final rule with comment period (75 FR 73483) and 
reinstate the prior policy that the signature of the physician or NPP 
is not required on a requisition for Medicare purposes for a clinical 
diagnostic laboratory test paid under the CLFS. We are proposing this 
policy based on continued and new concerns noted by stakeholders 
regarding the practical effect of the finalized policy on 
beneficiaries, physicians, and NPPs.
    While we did not solicit further comments on the signature on 
requisition issue in the CY 2011 PFS final rule with comment period, we 
did receive additional feedback from industry stakeholders on the issue 
after its publication in the Federal Register. Industry stakeholders 
identified many scenarios where it would be difficult to obtain the 
physician's or NPP's signature on the requisition for clinical 
diagnostic laboratory tests under the CLFS. Industry stakeholders 
asserted that there are many different situations where the physician 
or NPP would direct staff to prepare requisitions for laboratory tests, 
but then would be unavailable to provide his or her signature on the 
requisition. As an example, and one that was raised by commenters to 
the CY 2011 PFS proposed rule, in the long-term care setting, the 
physician is typically not available in person on a daily basis. In 
these cases, the physician may keep abreast of the patient's condition 
by calling the nursing staff. If a patient's condition indicates that a 
clinical diagnostic laboratory test is required, the nursing staff 
typically transcribes the order from the physician over the telephone 
onto a requisition. The information has to be transmitted to the 
laboratory and, in this scenario, there is no physician's or NPP's 
signature on the requisition. Another example that occurs in many 
settings, including nursing homes, all types of hospitals (inpatient as 
well as outpatient), and physician offices, involves specimens that are 
packaged for transmission to the laboratory with a requisition by 
nursing staff. Because the specimen often is transferred directly from 
the patient to the nursing staff without, in most cases, a physician's 
or NPP's intervention, the requisition that accompanies the specimen 
does not bear the signature of the physician or NPP.
    Even in cases where the physician or NPP sees the patient in his/
her offices for an appointment and recommends that clinical diagnostic 
laboratory testing be performed, we now better understand that, 
typically, the information is transcribed from the medical record onto 
a paper requisition by office staff after the physician or NPP and the 
patient have concluded their interaction. In practice, we can see how 
requiring the physician or NPP to sign the paper requisition could, in 
some cases, be very inconvenient and disruptive to the physician, NPP, 
the beneficiary, and other patients. The physician or NPP may need to 
take time either during appointments with subsequent patients or 
between patient appointments to make sure that the requisition is 
signed for a particular patient prior to his/her departure from the 
office. In addition, a beneficiary might have to wait for a physician 
or NPP to complete the requisition signature process before the 
beneficiary could depart from the office.
    Another situation identified by industry stakeholders that we did 
not previously consider concerns physicians or NPPs who maintain 
several practice locations. A patient may see his or her physician or 
NPP only at one particular practice location. If that patient presents 
to the practice location with a medical issue that the physician or NPP 
believes warrants immediate laboratory testing, but the physician or 
NPP is physically at a different location that day, the physician or 
NPP may be able to direct his or her nursing staff to prepare a 
requisition for the laboratory test. But, if the physician or NPP must 
sign the requisition, there could be a delay of several days or longer, 
before the physician or NPP is able to do so, which means the patient 
would have to wait to have the laboratory test performed.
    The aforementioned scenarios have detrimental implications for 
expeditious patient care that were not evident to us until the new 
policy was effectuated and we started hearing from stakeholders in the 
industry that would be negatively impacted by the policy. In response 
to a comment suggesting that physicians be educated about this new 
requirement to alleviate problems of non-compliance, we stated, in the 
CY 2011 PFS final rule with comment period (75 FR 73482), that we would 
update our manuals and direct the Medicare contractors to educate 
physicians and NPPs on this policy. After publication of the CY 2011 
PFS final rule with comment period, it became even clearer to us that 
some physicians, NPPs, and clinical diagnostic laboratories were not 
aware of, or did not understand, the policy. Therefore, in the first 
calendar quarter of 2011, we focused on developing educational and 
outreach materials to educate those affected by this policy. Further, 
we issued a statement that, once the first quarter of 2011 educational 
campaign is fully underway, we would expect requisitions to be signed. 
While developing educational and outreach materials, we realized how 
difficult and burdensome the actual implementation of this policy was 
for physicians and NPPs and that, in some cases, the implementation of 
this policy could have a negative impact on patient care. At that 
point, we decided that the better course of action was to re-examine 
the policy.
    We re-examined our policy and our reasons for adopting this policy 
in light of industry stakeholders' comments received after publication 
of the CY 2011 PFS final rule with comment period and comments received 
on the CY 2011 PFS proposed rule. We reviewed our beliefs and 
assumptions regarding the effect of our policy on access to care and 
with respect to administrative burden on physicians and NPPs, the 
effect on innovation, and the impact on laboratories. We believed that 
the policy would not have a negative impact on beneficiary access to 
care. However, we now believe that we underestimated the potential 
impact on beneficiary health and safety. As

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discussed previously, care may be delayed under this policy in 
situations where the physician or NPP orders the test but is not 
available onsite to sign the requisition. For example, we understand 
there are concerns that certain populations of patients, such as 
nursing home patients and patients confined to their homes, may have 
laboratory tests ordered urgently by a distant physician or NPP to 
obtain information that is imminently needed in order to assess a need 
for immediate referral to a hospital, emergency department or other 
facility. If the ordering physician or NPP is not onsite, it is 
unlikely that he or she would be able to receive, sign, and return a 
requisition in the timeframe needed to respond to the patient's urgent 
clinical status. We had not anticipated this impact on care when we 
finalized our policy.
    We also believed that the administrative burden on physicians and 
NPPs would be minimal and would result in a less confusing process. 
Physicians and NPPs must document their orders, in some form, in one or 
more of the medical records of the patient. We still believe that 
signing a laboratory requisition at the time of the order, if the 
requisition is ready for signature, imposes little burden on the 
physician or NPP, while significantly increasing our ability to 
minimize improper payments due to fraud and abuse. However, we believe 
we may have underestimated the number of occasions in which the 
physician or NPP cannot perform both steps concurrently. We now 
understand that it is not always the case that a physician or NPP can 
perform both steps concurrently. For instance, a physician may sign an 
order at the time of delivering care, but the requisition may not be 
available for signature until sometime later. In that situation, the 
physician may need to interrupt a subsequent examination in order to 
sign a completed requisition so that the patient may leave with the 
requisition. Given recently released estimates of physician shortfalls 
in primary care (as referenced in remarks by the Health Resources and 
Services Administration (HRSA) Administrator to the Bureau of Health 
Professions Advisory Committee on April 21, 2009), the cost of lost 
physician time must also be revalued upwards. Alternatively, the 
beneficiary may have to wait for the physician or NPP to conclude his/
her subsequent appointment, which could be as long as 30 minutes or 
more. Neither of these situations--interrupting the physician or NPP in 
a subsequent appointment or making the beneficiary wait for an 
inconvenient period of time--is acceptable. Further, we believed that 
the policy resulted in a less confusing process because a physician or 
NPP signature would be required for all requisitions and orders, 
eliminating uncertainty over whether the documentation is a requisition 
or an order, whether the type of test being ordered requires a 
signature, or which payment system does nor does not require a 
physician or NPP signature. However, based on industry stakeholder 
comments subsequent to the publication of the CY 2011 PFS final rule 
with comment period, we now believe this process may not be less 
confusing. Further, industry stakeholders assured us that they had not 
been confused about the former physician signature policy and that they 
never intended for us to interpret their call for consistency in the 
signature process to mean that they should be burdened with an 
additional requirement when they were already signing the medical 
record.
    In addition, we believed that many stakeholders either had 
converted or were in the process of converting to an electronic health 
records process that would negate the need for a requisition. 
Electronic health records and electronic transmission of health 
information are key pieces of this Administration's economic recovery 
plan and, moreover, are key elements of our plan to improve healthcare 
quality and efficiency. From the additional stakeholder concerns 
subsequent to our CY 2011 PFS final rule with comment period, we are 
sensitive to the increasing migration of information transfer away from 
paper forms, such as requisitions, to the direct electronic submission 
of requests for services. After we adopted the new policy, stakeholders 
expressed their concerns that the requirement for a signature would 
increase paperwork, in direct opposition to our promotion of time-
saving electronic communications. We believe that the requirement for a 
signature on the requisition does not impact stakeholders who utilize 
an electronic process for ordering clinical diagnostic laboratory tests 
because the policy only applies to requisitions, which are paper forms. 
Our intent was not to suggest that a requisition was necessary in those 
cases. However, we recognize that members of the provider and supplier 
community believe that this regulation could inhibit their use of 
innovative technology and investment in healthcare IT resources even 
after we explained the issue. Therefore, we underestimated the 
potential for paperwork burden.
    Finally, we believed that the policy would make it easier for a 
reference laboratory to know whether a test is appropriately requested 
and to minimize potential compliance problems. Specifically, we believe 
that the policy improves a laboratory's ability to authenticate 
requisitions. While we still believe this is true, based on industry 
stakeholder concerns received after the CY 2011 PFS final rule with 
comment period, which elaborated on comments submitted in response to 
the CY 2011 PFS proposed rule (75 FR 40161 through 40163), we now 
believe our estimate of the financial benefit of this aspect of the 
policy is less than we originally believed, because the percentage of 
laboratory requests actually covered by this policy may be smaller than 
we originally predicted and may continue to shrink as new technology is 
adopted. We also believed the policy provided a mechanism for 
laboratories to fulfill their responsibility to ensure that they only 
provide and bill for services on the direct order of a physician or NPP 
as the signature on the requisition would provide documentation and 
evidence that the physician or NPP had ordered the service. However, 
industry stakeholders expanded on comments to the CY 2011 PFS proposed 
rule and informed us that there was a cost to adopting a rigid 
mechanism of establishing authenticity. Laboratories believe that it is 
more efficient for them to use internal procedures and controls to 
ensure that they do not provide and bill for services in the absence of 
a physician authorization rather than through a Federal policy. We 
believe that the benefits expected may be lower than we originally 
estimated.
    In summary, there were many situations that we could not recognize 
as problematic until we finalized the new policy and stakeholders began 
to implement. Upon review of the concerns that industry stakeholders 
raised after we finalized our policy in the CY 2011 PFS final rule with 
comment period, and in reconsideration of comments to the CY 2011 PFS 
proposed rule, we propose to retract the policy that was finalized in 
the CY 2011 PFS final rule with comment period, which required a 
physician's or NPP's signature on a requisition for clinical diagnostic 
laboratory tests paid under the CLFS (75 FR 73483) and we propose to 
reinstate our prior policy that the signature of the physician or NPP 
is not required on a requisition for a clinical diagnostic laboratory 
test paid under the CLFS for Medicare purposes.
    We remain concerned about the costs and impact of fraud and abuse 
on the

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Medicare program. The requirement that the treating physician or NPP 
must document the ordering of the test remains, as does our 
longstanding policy that requires orders, including those for clinical 
diagnostic laboratory tests, to be signed by the ordering physician or 
NPP. We believe that all parties share in the responsibility of 
ensuring that Medicare services are provided only in accordance with 
all applicable statutes and regulations, such as the requirement for a 
physician or NPP order. In many instances, such as in the case of 
orders originating in hospitals, we believe that retaining all the 
other requirements previously discussed, especially requiring the 
physician or NPP who orders the service to maintain documentation of 
medical necessity in the beneficiary's medical record according to 
Sec.  410.32(d)(2)(i), as well as the hospital CoPs on medical record 
services at Sec.  482.24, are sufficient. However, we note that 
hospital CoPs do not apply to other settings, such as private offices.
    We believe that it is the responsibility of the clinical diagnostic 
laboratory, as it is for the provider of any service, to have 
sufficient processes and safeguards in place to ensure that all 
services are delivered only when ordered by the physician or NPP. This 
proposed rule does not preclude an individual laboratory from requiring 
a physician's or NPP's signature on the requisition. The laboratory may 
develop its own compliance procedures to ensure that it only furnishes 
services in response to a physician or NPP order. Such procedures could 
include internal audits, agreements with ordering physicians or NPPs to 
provide medical record evidence of the order in the event of an 
internal or external audit, steps to confirm the existence of an order 
under certain circumstances, or any other measures including the 
acceptance of risk by the clinical laboratory. We believe that this 
financial and compliance responsibility was implicit in the 2001 final 
rule (66 FR 58788), was reiterated in the March 5, 2002 transmittal 
(Change Request 2410, Transmittal AB-02-030), and has remained a 
consistent element of the subsequent instructions.

III. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

IV. 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.

V. Regulatory Impact Statement

    We have examined the impact of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), 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 Orders 12866 and 13563 direct 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). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. A regulatory impact analysis (RIA) must be prepared for 
major rules with economically significant effects ($100 million or more 
in any 1 year) or that adversely affect, in a material way, the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
government or communities. There are no expenditures or fiscal impact 
on the Medicare program associated with the policy discussed in this 
proposed rule. While the policy that is proposed for reinstatement in 
this proposed rule may have an effect on beneficiaries, we believe that 
any effect would be positive as we are changing a requirement that 
might have impeded access to care in some cases. There are no proposed 
policies in this proposed rule that impact payment rates under the 
clinical laboratory fee schedule, or any other part of the Medicare 
program. Therefore, for the change in policy regarding the physician's 
or NPP's signature on requisitions for clinical diagnostic laboratory 
tests paid under the CLFS, this proposed rule does not reach the 
economic threshold and thus is not considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Many hospitals and many other providers and 
suppliers are small entities, either by nonprofit status or by meeting 
the Small Business Administration (SBA) definition of a small business. 
Individuals and States are not included in the definition of a small 
entity. We are not preparing an analysis for the RFA because the 
Secretary has determined that this proposed rule, if finalized, would 
not have a significant economic impact on a substantial number of small 
entities.
    In addition, section 1102(b) of the Social Security Act (the Act) 
requires us to prepare a regulatory impact analysis if a rule may have 
a significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. With the exception of hospitals located in 
certain New England counties, for purposes of section 1102(b) of the 
Act, we define a small rural hospital as a hospital that is located 
outside of an urban area and has fewer than 100 beds. Section 601(g) of 
the Social Security Amendments of 1983 (Pub. L. 98-21) designated 
hospitals in certain New England counties as belonging to the adjacent 
urban areas. Thus, for our purposes, we continue to classify these 
hospitals as urban hospitals. We are not preparing an analysis for 
section 1102(b) of the Act because the Secretary has determined that 
this proposed rule, if finalized, would not have a significant impact 
on the operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2011, that 
threshold is approximately $136 million. This proposed rule, if 
finalized, would have no consequential effect on State, local, or 
tribal governments or the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a

[[Page 38347]]

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. Since this proposed 
regulation does not impose any costs on State or local governments, the 
requirements of Executive Order 13132 are not applicable.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was not reviewed by the Office of Management and Budget.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplemental Medical Insurance Program)

    Dated: June 2, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: June 24, 2011.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2011-16366 Filed 6-29-11; 8:45 am]
BILLING CODE 4120-01-P